When is resignation actually dismissal?

Any employer, including employers in early childhood education and care (ECEC), must be mindful of their responsibilities under the Fair Work Act 2009 (Cth). 

 

However, as demonstrated by a recent early childhood education sector ruling, Alisa Quill v The Trustee for Campbell Childcare Trust (2024), an employee cannot lodge an unfair dismissal claim unless their employment has been terminated at the employer’s initiative.  

 

In this instance, the employee claimed that she had been forced to resign due to a series of actions by her employer, including a demotion, not receiving a promised pay rise, and being pressured to separate from her son during work hours. 

 

The employee filed a complaint with the Fair Work Commission after a colleague made derogatory remarks about her pregnancy and her capacity to perform her duties as an educator at the childcare centre. 

 

Despite the employee’s efforts to resolve the issue internally, she alleges the employer failed to take adequate action, resulting in the employee feeling unsupported and discriminated against.

 

She argued that these actions amounted to a “forced resignation”, which she contended should be treated as a dismissal under the Fair Work Act.

 

Exploring ‘forced resignation’ 

 

A forced resignation may still constitute dismissal if the employer’s conduct results directly or consequentially in compelling the employee to resign involuntarily. 

 

Resignation can be forced by conduct, or a course of conduct, engaged in by the employer. Conduct includes both an act and a failure to act.

 

The obvious case is where the employer effectively instructs the employee to resign or be dismissed. Where it is said a resignation is forced by conduct or a course of conduct on the part of the employer, the test is whether the employer engaged in the 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 focus is on the employer’s conduct. Would a reasonable employee in the same circumstances consider that, based on what the employer has done or said (or not done and/or not said), they had no choice to resign?

 

Often it will only be a narrow line that distinguishes conduct that leaves an employee no real choice but to resign employment, from a situation in which the conduct merely makes it in the employee’s interests to quit.

 

Where an employer’s conduct is ambiguous, and the employee’s decision to resign is based largely on their perceptions, it will be difficult for the employee to argue that the resignation was forced by the employer’s conduct.

 

It’s also important to note the employer’s conduct must be operative at the time of resignation.  In some cases, a course of conduct by the employer might lead an employee to reasonably consider that they have no choice but to resign.  The cumulative effect of the employer’s conduct might make the employee’s situation insufferable as to make their continued employment untenable.

 

The Quill case

 

In Alisa Quill v The Trustee for Campbell Childcare Trust (2024) these considerations were explored by the Fair Work Commission (FWC). The employer objected to the application on the basis that Ms Quill resigned voluntarily during her probationary period and was not dismissed.

 

The FWC had to determine whether the employee was dismissed under Section 386(1)(b) of the Act, which defines dismissal as either the termination of employment by the employer or a forced resignation due to the employer’s conduct.

 

In this case, the FWC found that the employee’s resignation was voluntary and that there was insufficient evidence to support her claims of demotion or coercion. The Commission ruled that her resignation was not forced by the employer’s conduct, and as such, her claim of unfair dismissal was dismissed.

 

Bervar Pty Ltd 

 

Conversely, in the case of United Workers’ Union v Bervar Pty Ltd (2022), a human resources manager was found to be accessorily liable for involvement in an employers’ unlawful adverse actions in an employee dismissal. 

 

The case looked at whether an employee who had been the victim of racist bullying and harassment had resigned.

 

In this case, the employee had gone home upset, prompting the employer’s human resources manager to telephone the employee’s home for a welfare check. 

 

The employee’s husband answered and complained the employee had been bullied and harassed.  The manager denied any knowledge of that conduct and asked when the employee would be returning to work.  The husband said twice that his wife would not be returning to work and that she would be making a claim to the FWC.

 

The employer argued it could treat this exchange as resignation by the employee.  The Court disagreed, ruling that a statement from the husband that the employee was never coming back would be entirely consistent with the behaviour one would expect of a husband or wife who had just learned that their partner had been subjected to workplace bullying.  

 

The Court ruled it did not amount to the employee resigning because only the employee could resign, and there was no evidence that her husband was authorised to terminate the employment contract on her behalf.

 

The manager’s assumption that the husband had that authority to give resignation notice was misplaced because he took no step to verify the existence of any authority.  The employee was upset, and it was reasonable to ask her husband to take the call.  However, the authority given by the employee to her husband to take the call did not extend to giving notice of resignation.

 

Later, in United Workers’ Union v Bervar Pty Ltd (No 2) (2023), the Court was required to determine the appropriate penalty to be imposed on the employer for its adverse action and the HR Manager for his direct involvement in the dismissal. 

 

In making judgement, the court stated: “It is difficult to think in the modern age of anything more humiliating, or destructive of the self-confidence, than for a female employee with low self-confidence to have her employment ended by an employer assuming a husband has an authority to determine contractual relations for his wife.”

 

The Court ordered that the employer pay the employee $47,834.26 for economic loss, equivalent to 12 months’ pay, as well as $9,000 in general damages for hurt, humiliation and distress caused by the dismissal.

 

For early childhood education providers, these cases highlight the importance of clear communication and documented policies regarding employee roles, pay agreements, and working conditions. Managing employee concerns professionally and transparently is essential to avoid potential disputes and claims of unfair treatment. Additionally, ensuring that all personnel matters, especially related to family dynamics in the workplace, are handled with care and clear policies can help prevent misunderstandings that may lead to legal challenges. 

 

If you have any questions about forced resignation in your workplace, please get in touch with Holding Redlich Managing Partner Charles Power.