Constructive Dismissal, what is it?

The Fair Work Act says that a person has been dismissed if they have resigned from their employment but were forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.” In other words, if the conduct within the workplace was so bad that the employee had no other choice but to resign.

How could a constructive dismissal occur?

There are a number of different occasions that employees say caused them to resign from their employment, but some of the most common include:-

  • An employer not providing a safe workplace;
  • An employer suggesting that an employee should resign;
  • An employer making it really difficult for an employee to actually do their job;
  • An employer imposing unfavourable changes to the terms and conditions of employment, i.e. demotion or pay-cut; and
  • An employer failing to prevent an employee from bullying, harassing or discriminating against another employee .

Can any claims arise from a “constructive dismissal”?

If an employee resigns as a result of the conduct of their employer, and felt that they had no other reason but to resign, they may be able to make an unfair dismissal application.

If your employee made this type of application they would have to prove that the actions of the employer were the primary contributing factor ultimately leading to their dismissal. They need to be able to show that had the conduct not been entered into by the employer, they would have remained in their employment.

In a recent Fair Work Commission decision, an employee was given the option of either taking a voluntary redundancy package or becoming an independent contractor. When the employee rejected both offers, his employment contract was varied by making him a part time employee, with reduced pay but increased duties.

After feeling he was being “managed out” the employee tendered his “forced resignation” and soon after lodged an unfair dismissal claim. The Fair Work Commission found that the employee was constructively dismissed by a combination of a few factors, namely; the withdrawal of the redundancy offer, the reduction in hours (going to part time) and the increase in workload.

For more information regarding constructive dismissals or terminations in general please contact the ARA Employment Relations Team on 1300 368 041.



Retail Voice CEO Message: 15 March 2023

Retail crime continues to be a concern with many businesses recording an increase in shoplifting. 
In the latest Bureau of Crime Statistics and Research data coming out of New South Wales, retail theft increased 23.7% year-on-year.  

Retailers have an important role to play in closing the gap

Today is National Closing the Gap Day, a day of action to pledge support for achieving indigenous health equality by 2030. As part of the ARA’s reconciliation journey, we have made a commitment to use our reach to raise awareness with our members about days of significance for First Nations communities, like Closing the Gap Day.

Retail Voice CEO Message: 1 March 2023

This week we’re excited to launch the 2023 ARA Retail Insights Report – our annual overview of the retail outlook. The way the retail sector is perceived, and its public profile is essential to our long-term success.