Forcing a worker to resign won’t protect you from unfair dismissal
Forcing an employee to resign by threatening to sack them if they don’t, won’t protect you from an unfair dismissal claim.
“It’s called a constructive dismissal, and even though the worker has technically resigned, the Fair Work Commission will take it that you forced their hand, and therefore you have effectively sacked them, and they are therefore eligible to make a claim for unfair dismissal,” Miles Heffernan from Employwise said.
“That’s why employers need to be extremely careful when managing an exit from their business for a troublesome employee.”
A case study
A recent case before the Fair Work Commission highlights the dangers of letting an employee resign, rather than dismissing them.
It involved Jarrod Grundy, a boiler maker and welder who claimed he was forced to resign immediately after he was told that he was being fired for serious misconduct.
Grundy worked for Brister and Co based in Adelaide, and had been involved in a number of incidents which the employer considered to be serious misconduct.
Despite a number of verbal warnings, the conduct continued until management informed Grundy that his employment was going to be terminated.
As Grundy was packing his things, his boss offered him the chance to resign instead, and suggested he could give him a positive reference.
Grundy agreed, and Briser and Co wrote a resignation letter for him to sign.
Constructive dismissal
Deputy President Peter Anderson ruled that the employer had forced the employee to resign (because he was going to be sacked if he didn’t) and that the employee was therefore constructively dismissed, and entitled to make an unfair dismissal claim.
Mr Anderson noted that the resignation had been the idea of the employer and been advanced by them.
Despite this, Mr Anderson found that the dismissal was not unfair, because Grundy had engaged in a pattern of insubordination, which involved abuse and swearing at managers and other people in the workplace.
Grundy’s claim was ultimately dismissed.
The lesson
“The lesson is simple – even a negotiated and agreed resignation will not necessarily protect employers from an unfair dismissal claim,” Mr Heffernan said.
“Employers should always make sure they have a valid reason for dismissing a worker, and should always give procedural fairness during any disciplinary process.
“The best advice I can give employers is to seek expert legal advice before performance managing a difficult employee, and definitely before making any move to sack them.”
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If you need assistance managing a difficult employee, we can help.
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