What is a constructive dismissal?
It is not defined in any statute. The concept involves recognition that a “forced” resignation by an employee can be a termination of employment by the employer in all but the final act. Constructive dismissal is often raised by employees but is practically very difficult to prove. The courts and the Fair Work Commission have set a high hurdle for employees to demonstrate that a resignation is in fact a constructive dismissal.
For instance, constructive dismissal may occur when an employee resigns after:
- a unilateral reduction of working hours by an employer;
- a transfer to another location involving unreasonable travel and without consultation;
- being ostracised in the workplace for allegedly spreading rumours.
However, most claims of constructive dismissal involve scenarios of alleged over zealous performance management and workplace bullying by employers. It is much more difficult in these cases to establish constructive dismissal. A feeling that an employee has no choice than to resign in the face of a difficult workplace situation will not itself amount to constructive dismissal. Each case needs to be judged on its own merits and there will often be uncertainty about the outcome. Some cases win and some lose.
Constructive dismissal may be a basis for legal claims including statutory unfair dismissal, breach of statutory general protections or unlawful discrimination or a common law notice claim. However, there is no such thing as a “constructive dismissal claim” by itself. It is simply a claim that employment has been ended by the employer and action must be taken using the normal avenues and is subject to the restrictions of those avenues.
Employees should also be aware that they are handing employers a potential jurisdictional objection to any claim they make by resigning and claiming constructive dismissal. Employers will almost always object to any claim on this basis and there is potential for much time and money and emotion to be spent on what is really a side issue to the main problem.
It is important for employees to get advice before resigning. It is possible for a prompt withdrawal of a resignation to reverse a termination but there is no guarantee an employer will accept it. As a general rule, employees should not resign and expect it to be treated as constructive dismissal. Employees should be careful not to resign in the heat of the moment. If necessary, take some personal leave and get advice before making a final decision.
Please contact us if you would like any further information or help.