As an employer, have you ever been faced with a situation where an employee has resigned from their position, but has then made the claim that they had essentially been forced into the decision?
In a legal context, this concept is referred to as "constructive dismissal". Constructive dismissal is established when an employee is able to prove:
- that their resignation was forced; or
- that they had no choice but to resign due to the unacceptable or unlawful behaviour of their employer.
Forced resignation
Forced resignation occurs when an employer has threatened to
terminate the employment of an employee if they refuse to
resign, and where the employee does subsequently opt to resign.
Under these circumstances, even though the employee
has chosen to resign, they can reasonably argue
that the decision was not voluntary, due to the fact that their
employer had given them the ultimatum with the specific intent of
bringing the employment relationship to an end.
In this situation it would in turn be argued that had the employer not given the ultimatum, the employee would not have resigned.
It matters not that the employer may have been motivated to offer the employee the option of resigning in order to spare the employee from embarrassment and/or safe guard their employment history from the black mark of a termination.
Similarly, employees must understand that a resignation will not be viewed as forced if an employee opts to resign before they are terminated, that is, they opt to "jump before they are pushed".
By way of example, if an employee chooses to resign in order to
avoid receiving
performance management, and does so by opting to resign prior
to the performance management taking place (or at a point prior to
the conclusion of the process), the termination will
not be viewed as forced.
Requiring an employee to participate in performance management under genuine circumstances is a legitimate action for management to take, and therefore does not support an argument that such action (that is, requiring an employee to participate in a performance management process) forced them to resign.
No choice but to resign
This occurs when an employee decides to resign, but has the ability
to argue that they, realistically, had no choice, as the decision
was in response to the unacceptable behaviour of their employer.
Examples of unacceptable behaviour may include (but is not limited to):
- Making changes to employment terms and conditions - reducing a person's pay/salary;
- Demoting the employee;
- Changing the employee's working hours;
- Relocating the employee to another work site; and
- Ignoring, failing to take action to stop, or failing to prevent the unlawful treatment of an employee (e.g. the employee being subjected to harassment or bullying).
It is important to keep in mind that it is does not matter whether an employer did not intend, or did not foresee that the relevant employee would resign due to the employer's unacceptable behaviour.
What if an employee can prove they have been
constructively dismissed?
As an employer, you will be exposed to the same risks that you
would ordinarily be exposed to had you directly terminated the
person's employment, including (but not limited to) the
possibility of the employee being able to make an
unfair dismissal claim or
general protections/adverse action claim.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
