Annual Wage Review Decision 2022
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In order to access the unfair dismissal jurisdiction, an employee must be “dismissed” from their employment by the employer. One of the instances in which an employee may be “dismissed” from their employment is if they were forced to resign because of the employer’s conduct or course of conduct. This is referred to as “constructive dismissal”.
This can often be a contentious issue as employees may perceive that they have no option but to resign in certain situations when in fact there are other options available to them rather than resignation.
In McKean v Red Energy Pty Ltd  FWC 5688, the Fair Work Commission (FWC) rejected an employee’s claim that he was forced to resign because of his employer’s actions and upheld the employer’s jurisdictional objection to the employee’s unfair dismissal application that he was not “dismissed”.
The employee was employed in Victoria in a role where he was required to use a computer and telephone. At the start of the COVID-19 pandemic, employees were encouraged by the employer to work from home. The employee was permitted to continue to work from the office but was asked to be prepared to work from home. The employee advised his employer that he recently moved and did not have furniture to work from home.
As the pandemic progressed, the employee continued to work from the office but had further exchanges with his manager about working from home. The employee emailed his manager and advised that he would only be able to work from home if his employer purchased a desk for him. This request was declined.
When the employer advised the employee that he needed to sort out arrangements for working from home, the employee responded that his role was redundant if the employer could not facilitate arrangements to work from home. This was rejected by the employer.
As a result of the strict lockdown measures introduced in July 2020, the employer directed all employees to work from home unless there was an urgent need to come to the office. The employee’s union wrote to the employer who claimed that the employee had not been provided with the necessary equipment to work from home. The union suggested that the employee be reimbursed for purchasing a desk. The employer declined this request and advised that employees had been provided with all necessary equipment and support including laptops, adjustable chairs and ergonomic assessments.
The employee continued to work from the office and when directed to comply with the employer’s directions, the employee submitted a leave application for six weeks’ leave. After this request was denied by the employer, the employee tendered his immediate resignation.
In his unfair dismissal application, the employee submitted that he had no reasonable choice but to resign as a result of the employer’s conduct, including that it had refused to:
The employee submitted that the employer contravened its work health and safety duties by failing to take reasonable steps to maintain a safe work environment because it expected him to work from home. The employee also submitted that he could have been allowed to work from the office under the exemption to the Victorian Government’s lockdown measures and that the employer unreasonably refused his leave request.
The employer lodged a jurisdictional objection to the employee’s unfair dismissal application, denying that the employee was forced to resign from his employment, which was wholly upheld by the FWC.
The FWC held that the employee’s claim that he was forced to resign was “entirely without merit”. For the FWC, the employer’s refusal to buy a desk for the employee was not something which reasonably forced him to resign.
The FWC also held that there were measures the employee could have taken instead of resignation including:
The FWC also considered the employer’s actions to be reasonable. The FWC found that the employee freely chose to resign and was not compelled to do so.
The FWC concluded that the employee had not been constructively dismissed as he was not forced to resign because of the employer’s conduct. The Employee was also not placed in a position where he had no reasonable choice but to resign.
The FWC also went on to note, in any event, that the employee’s failure to follow the employer’s reasonable direction to work from home would have constituted a valid reason for dismissal and the dismissal would not have been unfair.
This is a timely decision for employers in relation to how the FWC will approach constructive dismissal claims. Put simply, the employee will need to demonstrate that as a result of the employer’s conduct or course of conduct, there was little choice but to resign. If the employer’s actions were reasonable and there were reasonable measures the employee could have taken before resigning, then the employee will not have been constructively dismissed.
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