When a staff member raises frustrations and suggests they may leave, even in what appears to be a casual conversation, it often falls to the business owner or manager to respond. In small to medium businesses, there is rarely a dedicated HR team to step in.
So, what begins as a conversation about workload, management style or workplace concerns can quickly escalate into a Fair Work claim or constructive dismissal dispute if handled incorrectly.
How you respond can have significant legal consequences.
We frequently act for employers facing claims arising from mismanaged resignation discussions. The scenario below reflects the structured approach we advise employers to take to minimise exposure to unfair dismissal and general protections claims.
When an employee suggests they may leave
Emily*, a staff member employed by a small business for two years, asks her employer for a private meeting. During the discussion, she raises concerns about her role and indicates she may leave. She says she is not sure the position is working out and that if things do not improve, she might need to move on.
As the conversation continues, she explains that she feels overwhelmed by her workload, that the management style does not suit her, and that broader workplace issues are affecting her wellbeing.
From Emily’s perspective, she is expressing frustration and uncertainty. From the employer’s perspective, however, the discussion may sound like the beginning of a resignation. This is where uncertainty arises. Is this a genuine resignation, or is the employee raising concerns in the hope that change might occur?
For a small business owner managing the conversation without HR support, the pressure to respond quickly can be significant. Acting too hastily, however, can create legal risk. A decision made in the moment may later be viewed as a termination rather than a voluntary resignation.
For a resignation to count as “valid”, it has to be clear, unequivocal, and truly voluntary on Emily’s part. A discussion about frustrations and possibly leaving doesn’t equal an effective resignation by Emily.
If this situation sounds familiar, the next step is critical. Employers should pause, clarify the employee’s intentions and document the discussion carefully. The following steps outline how to manage the conversation properly and reduce the risk of an unfair dismissal or general protections claim.
5 steps to manage a resignation discussion safely
Step 1: Pause the conversation
Do not treat the discussion as a resignation in the moment. Avoid making any immediate decisions.
Step 2: Ask a direct question
Clearly ask, “Are you resigning?” If the answer is unclear or conditional, do not proceed as if notice has been given.
Step 3: Request written confirmation
If the employee confirms they intend to resign, ask them to provide their resignation in writing before taking further steps.
Step 4: Separate complaints from exit discussions
If workplace concerns are raised, address them through your normal complaint process. Do not link the complaint to ending employment.
Step 5: Document everything
Make detailed file notes of the meeting and any follow-up discussions. Seek legal advice before issuing termination paperwork or processing final pay if there is any ambiguity.
If you are managing a resignation discussion and are unsure of the legal position, seek advice before taking further steps. Early guidance can prevent unnecessary disputes and protect your business.
To speak with one of our employment lawyers, contact our team on 1300 003 077 or submit an enquiry through our website. We will assess your situation promptly and provide practical, commercially focused advice.
Frequently Asked Questions
Can an employer treat a resignation discussion as formal notice?
No. A resignation is only legally effective if it is clear, unequivocal and genuinely voluntary. If an employee is expressing frustration or saying they “might” leave, this does not automatically amount to formal notice.
Treating an unclear discussion as a resignation may result in the employer being found to have terminated the employment instead, exposing the business to unfair dismissal or general protections claims.
What is a valid resignation under Australian employment law?
Under Australian law, a valid resignation must be clear, unconditional and communicated voluntarily by the employee. It cannot be the result of pressure, ultimatums or emotional heat-of-the-moment exchanges.
If there is ambiguity about the employee’s intention, employers should seek written confirmation before accepting the resignation or processing final pay.
What is constructive dismissal and how does it arise?
Constructive dismissal occurs when an employee resigns because of the employer’s conduct, but the law treats the resignation as a termination by the employer. This can happen if an employer pressures an employee to resign, gives an ultimatum, or treats a conditional statement as a resignation. In these circumstances, the employee may be entitled to pursue an unfair dismissal or general protections (adverse action) claim.
What should an employer do if an employee says they might leave?
Employers should pause and clarify the employee’s intentions. Ask directly whether the employee is resigning. If the response is unclear or conditional, do not treat the conversation as notice. Keep any complaint process separate from exit discussions and document the meeting carefully. Seeking legal advice before taking further steps can significantly reduce the risk of a dispute.
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