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Employee’s resignation ruled as grounds for unfair dismissal claim

Submitted on Thursday, 12th April 2018

A Full Bench of the Fair Work Commission (the Commission) granted permission to appeal an unfair dismissal claim made against an aged care home in NSW. Permission was granted as it was uncertain whether the employee was dismissed within the meaning of the meaning of s.386 of the Fair Work Act 2009 (Cwth) (the Act). The Act states “a person has been dismissed if: (a) the person’s employment with his or her employer has been terminated on the employer’s initiative”. 

The employee resigned in writing on 16 November 2016, whilst waiting to be called into a disciplinary meeting regarding allegations of misconduct. The employee prepared the hand written resignation letter whilst waiting to be called into the meeting. The initial letter provided a period of notice of one month. During the meeting, the employee amended the letter, scribbling out the one month notice period confirming the resignation would take immediate effect.

The employee, the Acting General Manager of the Facility and the Care Manager were in attendance during the disciplinary meeting. During this meeting the employee was “upset and emotional to the point of crying”. The Care Manager expressed the meeting was “confronting”. On 17 November 2016, the resignation was accepted by the Acting General Manager. However on 18 November 2016 after further thought, the employee attempted to withdraw her resignation. The employee was informed her resignation had been accepted and she was no longer an employee. 

The Commission stated “if the employer simply treats the ostensible resignation as terminating the employment rather than clarifying or confirming with the employee after a reasonable time that the employee genuinely intended to resign, this may be characterised as a termination of the employment at the initiative of the employer.”

The employer stated the resignation was not given in the “heat of the moment” and that the employee understood her intention to resign. In the initial hearing it was noted the employee was a refugee from Iran. The employer maintained the employee’s language and any cultural and ethnicity factors did not create any “special circumstances”. On these grounds, the employer wished to have the employee’s unfair dismissal claim dismissed. The employee’s solicitor submitted the letter of resignation could not have been “literate, lucid handwriting from a person not ill at ease” describing the employee as “upset, bewildered, distressed, surprised, muddled, and confused and she could not reasonably be understood to be conveying a real intention to resign”.

The employee’s solicitor added, the employer exploited the employee’s state. The employee’s solicitor submitted she was made to wait some time before being called into the disciplinary meeting and therefore felt isolated and flustered. 

The Commissioner addressed the potential issue of a constructive dismissal which is “not clearly defined in either statute or under common law”. The Commission confirmed if a resignation is made in the heat of the moment "if an employer accepts the resignation forthwith, and acts upon it, it may be held to be have been a legally ineffective resignation".

The Commissioner classified termination of employment into either “overt dismissal action” and “without overt dismissal action”. Where overt dismissal action occurs no further examination is required. However, where no overt dismissal action occurs (as was the case here), exploration of the situation is required. 

The Commission stated when contemplating a “heat of the moment” resignations where special circumstances are present, it would be “unreasonable for the employer to assume that the resignation was genuinely intended”. A resignation may be legally ineffective when accepted in such circumstances, meaning employment was terminated at the employer’s initiative. 

It was found that the Acting General Manager present during the disciplinary meeting “significantly misjudged the mental state of the applicant and he failed to recognise that the applicant was acting irrationally as a result of her disturbed state of mind”. 

The Commission found the irrational behaviour displayed by the employee can be attributed to ethnic and cultural factors as she held a sense of shame surrounding the allegations being considered. Additionally the employee’s lack of English language skills contributed to the special circumstances which existed. The combination of these special circumstances aided in the conclusion that the resignation was legally ineffective. 

It was ruled the employee was dismissed at the employer’s initiative therefore the employee’s unfair dismissal claim proceeding will continue. This case highlights the need for caution in the instance of ‘heat of the moment’ resignations as they are not always legally binding. It is the responsibility of the employer to be aware of such legislative technicalities and to take into account all of the circumstances.

Under current employment legislation, costly consequences await organisations found to be recruiting, managing or terminating staff incorrectly. Attend our Managing Termination, Redundancy and Unfair Dismissals training to increase your knowledge of counselling and discipline processes, and how to best manage an unfair dismissal claim. 

Written by Nicole Pritchard, Workplace Relations Advice Line Graduate Advisor

Fair Work Commission Decision [2018] FWC 1074

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