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When is a resignation not a resignation?

Many employers (and employees) incorrectly believe that an employee cannot sue for unfair dismissal if they resign. It’s not that simple.

Unfair dismissal rights for most Australian workers are governed by the Fair Work Act 2009. Under the Act, a worker has been ‘dismissed’ if:

  1. the worker’s employment is terminated on the employer’s initiative; or
  2. the worker resigns from their employment, but was forced to do so because of conduct engaged in by the employer.

The second type of dismissal, commonly called a constructive dismissal but more properly known as a “forced resignation”, is by now pretty well known in Australian law and allows an employee to bring an unfair dismissal claim. It’s one way in which a resignation will in fact be viewed as a dismissal by the Fair Work Commission.

However, there’s also another way, and this way arose in a recent appeal to the full bench of the Fair Work Commission, Bupa Aged Care Australia Pty Ltd v Shahin Tavassoli. In that appeal, Ms Tavassoli alleged that she was forced to resign by conduct engaged in by her supervisor. In the alternative, she also alleged that she had been sacked by the supervisor. Ms Tavassoli’s claim arose after a difficult meeting with her manager over scandalous allegations. Ms Tavassoli, in the heat of the moment, offered her resignation.

The Commission noted that:

[A dismissal may occur] where, although the employee has given an ostensible communication of a resignation, the resignation is not legally effective because it was expressed in the “heat of the moment” or when the employee was in a state of emotional stress or mental confusion such that the employee could not reasonably be understood to be conveying a real intention to resign…  In this situation if the employer simply treats the ostensible resignation as terminating the employment rather than clarifying or confirming with the employee after a reasonable time that the employee genuinely intended to resign, this may be characterised as a termination of the employment at the initiative of the employer.”

In Ms Tavassoli’s case, the appeal commissioners were satisfied that Ms Tavassoli had not been forced to resign. They did not have sufficient information to decide whether her resignation was ineffective, and so referred that question back to the original judge for rehearing.

The message to take away from this decision is that resignations can’t always be taken at face value. If a resignation is forced, it will be viewed by the Fair Work Commission and other employment courts as a dismissal. Further, if a resignation is offered in the heat of the moment or under stress or confusion, an employer must tread carefully before accepting that the employment is at an end. Accepting an ineffective resignation could expose you to claims for unfair dismissal.

FWO helps clients with all aspects of employment and industrial relations law. If you have an employment law dispute or query, please give our employment lawyer Jay Clowes a call on (02) 6650 7016.

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