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Heat of the moment resignation and constructive dismissal

For an employee to bring a valid unfair dismissal claim or a general protections claim involving dismissal, it should be obvious that they must have been dismissed by their employer.

For an employee to bring a valid unfair dismissal claim or a general protections claim involving dismissal, it should be obvious that they must have been dismissed by their employer.

In Carter v Metro Trains Sydney Pty Ltd [2023] FWC 379, the Fair Work Commission (FWC) was required to determine whether an employee had freely resigned from her employment or was constructively dismissed.

The Employee was employed by Metro Trains Sydney Pty Ltd (the Employer) as a Customer Journey Coordinator-Stations. The Employee lodged an adverse action involving dismissal application alleging that the Employer took adverse action against her in contravention of the general protections provisions of the Fair Work Act 2009 (Cth) (FW Act).

The Employer objected to the Employee’s application on the basis that the Employee resigned from her employment and it did not terminate her employment.

The deterioration of the employment relationship reached a climax on 4 August 2022. On this day, the Employer conducted “Job Ready Assessments” which involved assessing the suitability of employees based on simulated customer service and emergency scenarios with local high school students used as actors.

The Employee participated in three scenarios and the Operations Team Leader identified issues with the Employee’s performance. In particular, the Operations Team Leader was concerned that the Employee had engaged in unnecessary and unprofessional physical contact with a student actor.

Following the end of the assessments, the Operations Team Leader discussed the performance issues and concerns with the Employee. The Employee was advised that due to the seriousness of the matter she would be required to go home but that someone would be in contact with her in relation to the next steps.

The Employee proceeded to leave down the escalator to the train platform, before turning around and returning. The Employee approached the Operations Team Leader and said “I want to have a discussion with you, but I want a witness to this discussion.” In the Station Manager’s Room, the Employee verbally resigned.  

The Employee’s evidence was that in this meeting, she said she was “shocked and disgusted” by the accusations and returned her company property.

The Operations Team Leader gave evidence that the Employee stated “I will make your job easier”, verbally resigned and that she would send her resignation by email later before returning her company property. The Operations Team Leader advised the Employee to take the feedback given and to wait for a call.

The Operations Team Leader waited for an email from the Employee, however after this was not received, sent an email accepting her resignation.

The Employee claimed that that the Employer had discriminated against and bullied her and that she resigned under duress. The Employee submitted that she resigned verbally in the heat of the moment after the Employer’s defamatory accusations and unfair treatment and the Employer accepted this without attempting to contact her or follow-up.

The Employer submitted that it did not dismiss the Employee at its initiative and the Employee made an independent decision to end her employment. The Employer submitted that there was no action taken which intended to bring the employment relationship to an end, or which had the probable result of bringing the employment relationship to an end. The Employer further submitted that the resignation could not have been in the “heat of the moment” as she:

  • Admitted she had acted calmly;
  • Returned to work to see the Operations Team Leader, requested a meeting and a witness;
  • Clearly communicated her resignation and handed back company property; and
  • Did not demonstrate any irrational behaviour or emotional distress.

Under section 386(1) of the FW Act, a person has been dismissed if:

(a) the person’s employment has been terminated on the employer's initiative; or

(b) the person has resigned, but was forced to do so because of conduct, or a course of conduct, engaged in by the employer.

To determine whether a resignation was a dismissal, the FWC had regard to the Full Bench decision in Bupa Aged Care Australia Pty Ltd v Shahin Tavassoli [2017] FWCFB 3941 (Tavassoli) which set out the two limbs of section 386(1) of the FW Act as follows:

  1. A 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. In such circumstances, if the employer simply treats the resignation as terminating the employment rather than clarifying or confirming with the employee after a reasonable time that the employee genuinely intended to resign, then this may be characterised as a termination of the employment at the initiative of the employer.
  2. The test to be applied to determine whether a resignation was “forced” is whether the employer engaged in conduct with the intention of bringing the employment to an end or whether termination of the employment was the probable result of the employer’s conduct such that the employee had no effective or real choice but to resign.

The Full Bench noted that the employer’s conduct was not a necessary element in (1) but was an essential element in (2).

After reviewing the CCTV footage and identifying discrepancies between the footage and the Employer’s allegations, the FWC considered that the Employee’s concerns were sound in circumstances where serious allegations were put to her which had not been borne out in the evidence and were demonstrably false. The FWC considered that the allegations were “factual misstatements” intended to bring the Employee’s employment to an end.

Accordingly, the FWC accepted that the Employee’s evidence that she was put in a position where she felt no alternative to resign because of the fear of being under pressure at work and threats of fabrication of allegations against her. As such the FWC found that the Employee was dismissed from her employment per subsection 386(1)(b) of the FW Act.

The FWC also found that the Employee was dismissed by the Employer as it hastily accepted the heat of the moment resignation. The FWC noted that the Employer did not clarify or confirm whether she genuinely intended to resign particularly when the Employee stated that she would send her resignation by email.

In light of the Full Bench’s comments in Tavassoli, the FWC found that the Employee’s employment was terminated at the initiative of the Employer per subsection 386(1)(a).

Lessons for employers

Accepting a resignation from an employee provides the best protection for employers against claims against employees, however, where an employee provides a resignation on contentious or emotional circumstances, employers must take additional steps to ensure that the resignation was given freely.

 

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.

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