What Qualifies as a Constructive Dismissal Claim?

A constructive dismissal is usually an involuntary resignation by the employee because the employer has made unbearable the employee’s working conditions, working environment, or terms and conditions of the employment.

A constructive dismissal is a forced resignation. The employee resigned because the employer acted with an intent to end the working relationship. The employee was left with no real choice but to resign. Thus, the resignation was not at the employee’s own initiative.

What are the special circumstances inherent in a constructive dismissal?

A employee may have also resigned in the heat of the moment, or, the employee resigned under extreme pressure. This is a special circumstance. The employee who then treats the resignation in the heat of the moment as a real and voluntary resignation may be found to have constructively dismissed the employee if the employer did not give the employee a reasonable period of time to reflect on whether the employee had a real intention to resign. The employee may also be found to have been constructively dismissed if, after the employee has taken back his or her resignation in the heat of the moment, the employer refuses to take back the employee.

In cases of constructive dismissal where the employee resigned in the heat of the moment or resigned because the employer has made working conditions unbearable for the employee, the resignation is still taken as constituting a termination of employment at the employer’s initiative.

Case examples of constructive dismissal

One factual example of a constructive dismissal is when the employee and his manager had a heated discussion. During the discussion where angry words were exchanged, the employee believed that he was dismissed and the manager believed that the employee quit. However, after a weekend passed, the employee reported at the office to work out the notice period of his dismissal. Under these circumstances, there is no voluntary resignation by the employee. The employee did not demonstrate any intention to disregard the contract of employment that required him to work during the period of notice.

Another factual example of constructive dismissal is when the employee has not been paid his wages for four months. At the end of the four months, he received only half the pay that was owing to him. He told his manager that he was quitting his job. This is an example of a forced resignation. The resignation was not voluntary on the part of the employee. The employee resigned only because the situation at work was unbearable – he was not being paid his wages.

In the case of Andrew Jackson Wood v Delshine Pty Ltd [2019] FWC 3627 (18 June 2019), the employee had been working for 20 years in a chemical company owned by his ex-wife’s family. Despite having divorced his wife, he continued working at the chemical company. The driver’s ex-mother-in-law visited the factory where the driver was working.

The driver complained to his ex-father-in-law that his ex-mother-in-law was sexually harassing him each time she visited the factory. The ex-father-in-law made the driver sign a note that because there was a significant reduction in sales, and because he had filed a sexual harassment claim against his employer, his working hours will be reduced. The driver refused to sign the letter and he and his ex-father-in-law exchanged heated words.

The next day, he reported for work as usual. His ex-father-in-law asked him to leave the work premises because he had already quit. The driver refused but the ex-father-in-law called in the police.

The Fair Work Commission found that by cutting the delivery driver’s hours of work, his ex-in-laws’ conduct compromised his employment conditions and his pay such that he had to quit his job. The delivery driver was entitled to enjoy working without harassment. It was unfair for the employer to not provide him a workplace free of harassment. It was more unfair that when they could not provide him a harassment-free workplace, they cut his income significantly by reducing his work hours.

Reducing the delivery driver’s work hours is not an appropriate response to his complaint for sexual harassment. The FWC was not convinced that the deliver driver resigned or that his resignation was voluntary. They found that his resignation occurred in the heat of the moment and was brought about by the conduct of the employer.

Thus, to insist that the delivery driver resigned and refusing him re-entry into the workplace was a dismissal. The resignation was in truth a dismissal at the initiative of the employer. It was unfair.

How to assail a constructive dismissal?

The employee must bring an application for unlawful dismissal. The employer will usually respond that it had not dismissed the employee but that the employee had resigned. The employee then has the burden of proving that his resignation was not voluntary.

What does the employee have to prove?

When and employee brings an application for wrongful dismissal, the employee must claim that his resignation was involuntary. The employer must claim that his resignation was an act of constructive dismissal. To prove these claims, the employee must be able to present proof of the following facts:

The employee resigned;
The resignation was not voluntary:
1. Either the resignation was under the heat of the moment; or
2. The resignation was made under pressure
The resignation of the employee was a reaction to unfair or harsh acts of the employer.
The employer’s actions are the principal contributing factor that leads to the termination of the employment relationship.
The actions of the employer made the employee’s working conditions unbearable and, had the employee not resigned, the acts of the employer effectively terminated the employment relationship.
The employee had no choice but to resign. That, is, had the employer not acted in the way it did, the employee would have remained in the employment relationship. Thus, the resignation was not at the initiative of the employee but of the employer.

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