One of the instances in which an employee may be “dismissed” is set out under subsection 386(1)(b) of the FW Act – which applies to circumstances where the employee was forced to resign because of the conduct, or a course of conduct, engaged in by their employer (also known as “constructive dismissal”).
In the recent decision of Martin v Jim Aitken & Partners No. 1 Pty Ltd t/as Aitken Real Estate [2025] FWC 1542, the FWC was required to consider the unfair dismissal application of an employee who claimed that he was forced to resign from his employment under false pretences and so was dismissed under s 386(1)(b) of the FW Act.
The employee was employed as a Licensed Real Estate Salesman by Aitken Real Estate (the Employer).
In or around January 2025, a dispute arose regarding the calculation of the employee’s commission payments. The Employer engaged in several conversations with the employee about this issue, but the dispute was not resolved. After a heated conversation with the employee, the Employer told the employee to resign. In response, the Employee said, “make me”.
In or around February 2025, the Employer sent the employee a letter inviting him to attend a “proposed termination meeting” to discuss allegations of misconduct and underperformance. The letter stated that the Employer was considering terminating his employment.
At around the same time, the employee was offered employment with a competitor of the Employer.
The employee attended the termination meeting and denied the allegations against him, but went on to state that he considered the employment relationship to be irreparable and that both sides had lost trust with one another and that he wanted a decision on next steps.
The Employer proposed that the employee be redeployed to a different office in Sydney. The employee refused this request and proposed that he be terminated with “no bad blood, no repercussions” and a “fair resolution” that protected his entitlements.
At the conclusion of the meeting, the Employer and employee agreed that the employee would be terminated by mutual agreement and that he would be paid his termination entitlements, commission payments and four weeks’ wages in lieu of notice. The Employer later sent a letter to the employee confirming that his dismissal ended “by mutual agreement” and reminding the employee of his post-employment obligations.
Not long after his dismissal, the employee accepted the offer of employment with the Employer’s competitor that he had received a few days prior. When the Employer became aware if this, it wrote to the employee reminding him of the post-employment obligations that restricted him from working with a competitor and provided him with notice of the potential legal action that would be taken to restrain his conduct.
Upon receipt of this letter, the employee made an unfair dismissal application to the FWC claiming that the Employer’s conduct in misrepresenting that he was released from his post-employment obligations induced him to resign from his employment, with the result that he was forced to resign.
The Employer objected to the application on the basis that the employee was not dismissed from his employment and therefore did not have access to the unfair dismissal jurisdiction. The Employer maintained that the employment relationship was terminated by mutual agreement between the parties.
The FWC noted that any dispute as to whether the “mutual agreement” released the employee from his post-employment obligations fell outside the jurisdiction of the FWC and was instead a “matter for the courts”. The only issue that the FWC was required to consider was whether the employee had been dismissed within the meaning of s 386(1) of the FW Act.
After considering the evidence, the FWC ultimately rejected the employee’s submission that he was forced to resign from his employment because of the Employer’s conduct in misrepresenting his post-employment obligations.
The FWC found that it was clear on the evidence that the employment relationship ended when the parties reached a mutual agreement at the conclusion of the meeting. As a result, the employee could not have been forced to resign within the meaning of s 386(1)(b) of the FW Act because no resignation had occurred.
Although not required to do so, the FWC also considered whether the employee was dismissed at the employer’s initiative within the meaning of s 386(1)(a) of the FW Act. The FWC ultimately did not consider this to be the case, despite the Employer’s intention to dismiss the employee at the outset of the termination meeting.
For the FWC, it was clear on the evidence that the Employer had offered to relocate the employee to a different office instead of terminating his employment, but the employee refused and instead agreed to mutually end the employment on terms that were acceptable to him. The FWC stated that any subsequent failure by the Employer to comply with those terms did not change the fact that an agreement was reached.
The FWC therefore dismissed the application on the basis that the employee had not been dismissed within the meaning of s 386(1) of the FW Act.
For an employee to access the unfair dismissal jurisdiction, they must be able to demonstrate that they were dismissed from their employment within the meaning of s 386(1) of the FW Act.
As seen in this decision, the FWC found that the employee could not have been forced to resign from his employment for the purposes of s 386(1)(b) of the FW Act because the evidence made clear that the employment ended by mutual agreement between the parties.
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