Resignation to escape alleged bullying was not constructive dismissal, says FWC

After alleging workplace bullying, this employee’s unfair dismissal claim was dismissed, as the FWC determined it wasn’t a constructive dismissal. 

The Fair Work Commission has determined that an employee’s resignation due to alleged workplace bullying did not amount to a constructive dismissal.

The employee, a registered nurse at a private hospital, claims her employer ostracised and belittled her, gave her unreasonable directions, excluded her from workplace committees, and showed favouritism towards certain employees. As a result of this alleged behaviour, the employee claims she was forced to resign.

Following this, she claimed unfair dismissal, initially seeking reinstatement and then compensation. However, the presiding FWC Deputy President, Ingrid Asbury, was not convinced that the employee had been technically dismissed, calling her resignation a “disproportionate reaction”.

The employee had other avenues available to her, Asbury said, such as filing a formal bullying and harassment complaint, which the employee failed to utilise before resigning. 

 “While there is a narrow line distinguishing conduct that forces an employee to resign, from conduct that cannot be held to cause employment to be terminated… it is important that the line be closely drawn and rigorously observed,” said Abury in her decision.

“It is also important that caution is exercised in treating a resignation as being forced, where the decision to resign is based on the perceptions and subjective response of an employee, made unilaterally.”

Calling it quits due to an unpleasant work environment doesn’t necessarily mean the absence of toxic behaviors – and the FWC noted that some of the employee’s concerns were valid – but it doesn’t amount to dismissal.

“The Applicant opted to resign to remove herself from a situation which she perceived to be unfair and from conduct she perceived to be bullying,” said Asbury.

When can employees claim constructive dismissal?

So if this wasn’t a constructive dismissal, what would be?

“[A constructive dismissal] is a termination by the employer in all but the name; all but the final act,” says Rob Stevenson, Principal at Australian Workplace Lawyers.

It’s when the situation the employee finds themselves in is deemed as untenable, so resignation feels like the only option. It can also occur if an employee resigns in the heat of the moment then takes it back, but the employer doesn’t let them return.

“It really has to be the result of quite extreme conduct, often amounting to the repudiation of the employment contract,” says Stevenson.

He says constructive dismissals often occur when an employee resigns due to:

• Being unfairly performance managed
• ​​A unilateral reduction of working hours by an employer
• A transfer to another location involving unreasonable travel and without consultation.

“Most of the time, it won’t be enough for there just to be bullying and harassment. There will usually need to be an added factor,” says Stevenson.

However, that’s not to say bullying or harassment cannot amount to a constructive dismissal in certain circumstances. 

 “There was one case that involved an employee being effectively ostracised by everyone in the workplace, including the employer, because there was an allegation that she’d been spreading rumours about other employees,” says Stevenson.

“After an inquiry, it was found that the allegation wasn’t true. But, as a result, everyone made it difficult for this employee, so she had no choice but to resign.” 

“Managers need to be [aware of] the personalities involved and the consequences of their management style, as does HR.” Rob Stevenson, Principal at Australian Workplace Lawyers

The details of the case 

In this case, Asbury didn’t rule on whether the employee was experiencing bullying or harassment, instead keeping her observations purely to the issue at hand: did the employee’s resignation amount to a constructive dismissal?

The employee submitted evidence to support her view that her direct manager, the Assistant Director of Nursing, behaved in an unfair manner. The employee felt the Assistant Director often ignored her by not responding to emails, acted in a secretive manner by having closed-door meetings and showed favouritism by choosing a junior employee as Acting Assistant Director when she went on leave.

The crux of her argument appears to hinge on a letter the Assistant Director sent the employee requesting she attend a meeting into alleged misconduct that could have resulted in serious safety breaches.

The letter read: ‘It has been alleged that in your position… you have not been undertaking the required competency checks with Theatre employees but instead have been ticking them off as competent without confirming that this is the case.

‘If this is true, this allows employees to undertake tasks that they may not be competent to do. The obvious risks to patients, doctors and staff are significant.’

The employee was told an HR representative would be present and that she could bring a support person with her if she desired.

 In response to the letter, the employee emailed the hospital’s CEO claiming the allegations were false and outlining the concerns she had over the behaviour of the Assistant Director, dating back 12 months. The employee also refused to attend the meeting.

The CEO responded by acknowledging the employee’s concerns, but noted that the meeting request was not unreasonable based on the misconduct allegations. The CEO suggested the meeting be postponed while they sort out the situation, but he did not assure the employee that her allegations against the Assistant Director would be investigated. 

The employee replied to the CEO saying she was disappointed in his response and resigned from her position in January this year.

 Asbury agreed that the meeting request was not unreasonable. However, she also agreed that there were issues with some of the Assistant Director’s behaviours that should have been addressed, such as changes to reporting lines that were not done in consultation with staff and a failure to respond to several emails from the nurse.

 Despite this, Asbury concluded that the employee’s response was unreasonable and fuelled by emotion.

 “It cannot be said that the conduct or course of conduct she complains about had the intended or probable effect of ending her employment,” said Asbury.

Avoiding claims of constructive dismissal

One of the first steps to avoid employees claiming unfair dismissal or constructive dismissal is to keep a clear record of all communications between aggrieved employees and other members of staff. In this instance, having the letter outlining the details of the alleged misconduct and potential safety risks likely worked in the employer’s favour.

This case also demonstrates that having robust investigation processes in place and formal structures around reporting and remedying claims of workplace bullying can be a workplace’s saving grace. Had this employer not had these structures in place, perhaps the outcome would have been different.

“If those normal fundamentals of management are in place, that minimises the risk of these sorts of things occurring,” says Stevenson.

 Stevenson also cautioned against the type of language used in formal disciplinary letters sent to employees, as certain employees are likely to have an emotional response.

“When you use language like ‘allegations’, that’s almost always going to get the employee’s back up. The term ‘allegation’ is associated with disciplinary action or the potential for disciplinary action, rather than just a simple message of, ‘Hey, we’ve heard this is going on. We just want to make some inquiries and try to find out what the situation is.’

“Managers need to be [aware of] the personalities involved and the consequences of their management style, as does HR. [In this case], constructive dismissal was probably the least threatening option to occur in many ways. I’m not saying there is necessarily any substance to a formal bullying complaint, but that possibility was certainly there.”

In terms of the various workplace changes that were made, such as the processes around which staff were selected to step up into acting positions, Stevenson says that employers need to be really transparent and show care about how they share big news.

“Any form of significant change in the workplace, particularly when you’re dealing with long-serving employees, needs to be carefully managed. A personal approach is often warranted,” he says.

“These issues don’t come completely out of the blue. So from an employer’s point of view, those fundamentals of management are important to prevent this and build a solid case if they do.”

Looking to understand what bullying and harassment looks like in the workplace? Sign up to AHIR’s short course on the topic today.

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