Constructive dismissal or forced resignation refers to a situation where an employee resigns from their job due to the employer’s conduct. It is a result of their employer’s conduct that makes continued employment intolerable. Even though the employee resigns, it’s considered as if they were dismissed by the employer.
This legal concept is significant because it allows employees to claim compensation. They can also sue for unfair dismissal even though they technically resigned.
For a claim of constructive dismissal to succeed in Australia, certain conditions must typically be met:
- Breach of Contract: There must be a breach of the employment contract by the employer, such as:
- a significant change in job duties
- hostile work environment, or
- withholding salary.
- Unreasonable Behaviour: The employer’s behaviour or actions must be unreasonable or create an intolerable working environment. This might include bullying, harassment, discrimination, or consistently providing an unsafe work environment.
- No Reasonable Alternative: The employee must demonstrate that they had no reasonable alternative but to resign due to the employer’s actions or conduct.
Proving constructive dismissal can be challenging. It requires clear evidence of the employer’s actions or policies that led to the resignation. Employees are often advised to try to resolve issues internally, document incidents, and seek legal advice before resigning.
If a claim of constructive dismissal is successful, remedies might include compensation for lost wages or damages for the harm caused by the employer’s actions.
It’s crucial for both employers and employees in Australia to understand their rights and obligations under employment law to prevent or address situations that could lead to constructive dismissal claims. Employers should maintain fair and respectful workplaces, while employees should be aware of their rights and seek advice before resigning under difficult circumstances.
What Does the Legislation Say?
In Australia, constructive dismissal falls under the broader category of unfair dismissal. The Fair Work Act 2009 governs these matters at the federal level. However, it’s important to note that specific laws and regulations might vary slightly between states and territories.
The Fair Work Act 2009 outlines the provisions and procedures related to unfair dismissal, which includes constructive dismissal. Some key points from the legislation include:
- Eligibility for Unfair Dismissal: To claim unfair dismissal, an employee must generally have completed a minimum employment period (usually six months, or 12 months for small businesses) and meet other criteria specified in the Act.
- Constructive Dismissal Definition: The Act acknowledges constructive dismissal as a form of unfair dismissal, where an employee resigns due to the employer’s conduct, which could include a breach of the employment contract, unreasonable behaviour, or creating a hostile work environment.
- Filing a Claim: Employees seeking remedy for constructive dismissal can file an application with the Fair Work Commission (FWC), which oversees unfair dismissal claims. The FWC evaluates each case based on the circumstances presented.
- Remedies: If the FWC finds in favour of the employee, remedies might include reinstatement to the position, compensation for lost wages, or compensation for the harm caused by the dismissal.
- Evidence and Burden of Proof: The burden of proof generally lies with the employee claiming constructive dismissal. They must provide evidence to support their claim, demonstrating that the employer’s conduct or actions led to their resignation.
Employers need to adhere to fair and lawful termination practices, maintaining a safe and respectful workplace. They should also follow proper procedures if changes to employment conditions are necessary, avoiding actions that could lead to claims of constructive dismissal.
The legislation provides a framework for both employers and employees to address disputes regarding unfair dismissals, including cases of constructive dismissal, aiming to ensure fair treatment and proper resolution of such matters.
Example Scenario of Constructive Dismissal
Maria had been working at a marketing firm in Sydney for three years, excelling in her role as a senior graphic designer. However, changes within the company started to create a challenging work environment. The management restructured teams without consulting the employees, leading to increased workloads and confusion regarding roles and responsibilities.
Maria’s direct supervisor was replaced by someone less experienced, causing communication breakdowns and delays in project approvals. Additionally, the company introduced a new policy cutting back on overtime pay without discussing it with the employees. Despite these challenges, Sarah remained dedicated to her work.
However, matters worsened when Maria was unfairly blamed for a project delay caused by the new supervisor’s indecision. Feeling frustrated and unsupported, Sarah raised her concerns with HR, seeking clarity on her role and expressing her discontent with the work environment changes. However, HR dismissed her concerns without taking any action.
Feeling trapped and seeing no resolution, Maria felt compelled to resign. She believed the cumulative effect of the management changes, increased workload, lack of support, and the disregard for her concerns constituted constructive dismissal.
Moreover, she sought legal advice and filed a claim with the Fair Work Commission, presenting evidence of the unreasonable conduct and lack of resolution despite her efforts to address the issues internally. She must prove that the behaviour of the employer forced her to resign.
Seeking Advice from Employment Lawyers
Employment lawyers at JB Solicitors have the experience of dealing with a variety of complex matters. If you are looking for advice, we can assist you with your issues. We can help you with making constructive dismissal claim. On the other hand we can also provide advice if a constructive dismissal arises against you or constructive dismissal occurs in your organisation.
Are you looking to make a constructive dismissal or unfair dismissal claim? Reach out to us for more information.