Constructive dismissal occurs when an employee feels compelled to resign due to their employer’s conduct, effectively forcing them to leave their job. While it may seem like the employee voluntarily resigned, the reality is that their resignation was a direct result of their employer’s actions or failure to act. In Western Australia, constructive dismissal can be a complex issue, and employees may have various options available to them if they believe they have been unfairly pushed out of their job. This blog explores what constitutes constructive dismissal, the legal options for employees, and the steps they can take to protect their rights.

1. What is Constructive Dismissal?

Constructive dismissal happens when an employee resigns because their employer’s conduct has made continued employment intolerable. The employer’s actions are typically so unreasonable that they force the employee to resign, even though the employee may not have formally been dismissed. Examples of actions that might lead to constructive dismissal include:

• Unilateral changes to employment terms: This could involve a sudden and significant change in duties, work location, hours, or salary without the employee’s consent.
• Harassment or mistreatment: Persistent bullying, discrimination, or inappropriate behaviour by the employer or colleagues, which the employer fails to address.
• Failure to provide a safe working environment: If an employer neglects their duty to maintain workplace health and safety.
• Non-payment of wages or entitlements: If the employer withholds or delays payment of wages, holiday pay, or other entitlements, leading to a situation where the employee can no longer continue working under these conditions.

In all these cases, the employee may argue that they were effectively dismissed, even though they resigned. If an employee’s resignation is deemed to be a result of the employer’s unreasonable conduct, it may be classified as constructive dismissal.

2. Legal Framework for Constructive Dismissal in Western Australia

In Western Australia, constructive dismissal claims can be pursued under either state-based industrial relations laws or federal employment laws. The legal framework depends on the specific industry and the size of the employer.

• Fair Work Act 2009 (Federal System): Employees working for employers with 15 or more employees are generally covered by the Fair Work Act 2009, which provides protections against unfair dismissal. Employees in this system can file a claim for unfair dismissal if they resign due to constructive dismissal.
• Western Australian Industrial Relations Act 1979 (State System): Employees in certain state-based industries (e.g., those working for employers with fewer than 15 employees) may be covered under the WA Industrial Relations Act and can seek relief through the Western Australian Industrial Relations Commission (WAIRC).

3. Options for Employees Who Believe They’ve Been Constructively Dismissed

If you believe that your resignation was forced by your employer’s conduct, there are several options available to you in Western Australia. Depending on your specific circumstances and employment status, you can pursue a claim through either the federal or state system.

1. Unfair Dismissal Claim (Fair Work Act)

If your resignation was a result of constructive dismissal and you are covered by the Fair Work Act, you may be eligible to file an unfair dismissal claim with the Fair Work Commission (FWC).

• Eligibility: You must have worked for your employer for at least 12 months if you’re employed by a business with more than 15 employees.
• Time Limits: An unfair dismissal claim must be lodged with the FWC within 21 days from your resignation date. The 21-day period starts from the date you left your employment.
• Compensation: If your claim is successful, the FWC can award compensation or reinstatement (re-employment in your former role). The compensation is capped at 26 weeks’ pay or a maximum of $81,900, whichever is lower. Employees may also be entitled to other entitlements like unpaid wages and leave.
• Process: The FWC will assess whether your resignation was the result of harsh, unjust, or unreasonable treatment by the employer. If the FWC finds in your favour, they may order compensation or, in some cases, your reinstatement.

1. State-Based Claims (WA Industrial Relations Act)

If you’re employed in a state-based sector or by a small business (less than 15 employees), you may need to pursue a claim for constructive dismissal under the WA Industrial Relations Act.

• Eligibility: Employees who have been employed in WA for at least 6 months may be eligible to file a claim.
• Time Limits: The time limit for lodging a claim for constructive dismissal in WAIRC is 21 days from your resignation.
• Compensation: Compensation awarded by the WAIRC may be capped at $75,000 for wrongful termination claims, though this can vary depending on the specific case and factors like length of service, severity of employer conduct, and losses suffered by the employee.

1. Negotiation and Settlement

In some cases, an employee may choose to resolve the matter outside of formal legal proceedings through negotiation or settlement with their employer. This could involve:

• Mediation or conciliation: The Fair Work Commission or WAIRC may offer mediation or conciliation services to help resolve disputes before they escalate to a formal hearing.
• Direct negotiation: If the relationship between the employer and employee allows for it, a settlement could be negotiated directly, potentially avoiding the need for formal legal action.

4. Steps Employees Can Take If They Suspect Constructive Dismissal

If you believe your resignation was forced by your employer’s conduct, it’s important to take the following steps:

• Document the Situation: Keep a detailed record of all incidents that led to your resignation, including emails, letters, and notes from meetings or conversations. This evidence will be crucial in supporting your claim.
• Consult with our office: Seek legal advice from our office to assess whether your resignation was truly a result of constructive dismissal. We can help you understand your options and guide you through the claims process.
• Consider Alternative Dispute Resolution: Before filing a formal claim, consider mediation or conciliation, which may resolve the matter faster and with less cost.
• Lodge Your Claim on Time: Ensure that you file your claim within the relevant time limits (21 days) to avoid losing your right to compensation.

Conclusion

Constructive dismissal is a complex and serious issue that occurs when an employee resigns due to their employer’s unreasonable behaviour. If you believe your resignation was forced by your employer’s actions, you may have legal options for seeking compensation or reinstatement. In Western Australia, employees have the right to pursue claims under either the Fair Work Act or the WA Industrial Relations Act, depending on their circumstances. It’s important to act quickly, document the relevant events, and seek legal advice to ensure that your rights are protected.

If you suspect you have been constructively dismissed, contact our office for more specific and detailed advice on how to proceed.