Forced resignation, also known as constructive dismissal, occurs when an employee feels they have no real choice but to resign due to the conduct or pressure applied by their employer. In these cases, resignation is not truly voluntary, it’s the result of a workplace becoming intolerable, unsafe, or unfair.
In this guide, our employment lawyers, dive into what forced resignation is, when it applies, and what legal options are available to employees.
Key takeaways
Forced resignation is when an employee quits due to employer pressure, unfair treatment, or serious breaches of contract.
Legally, it can be treated as constructive dismissal, meaning the employee may be eligible for unfair dismissal compensation.
Proving forced resignation requires evidence of lack of choice, employer misconduct, and a direct impact on the employment relationship.
Employers should create a fair and safe work environment, follow employment contracts, and resolve workplace disputes promptly.
Legal advice is strongly recommended for both employees and employers involved in forced resignation situations.
What is Forced Resignation?
Forced resignation happens when an employer, either directly or indirectly, pushes an employee to leave their job. This could be through actions such as:
Creating an unsafe or hostile work environment
Making significant and unreasonable changes to job roles
Failing to pay wages or entitlements
Ignoring or enabling workplace bullying or harassment
Although the employee hands in their resignation, the law may still consider this a termination initiated by the employer (otherwise known as constructive dismissal).
If you’re and employer, read more in our Employer Guide to Forced Resignation.
Elements of Forced Resignation in Australia
To establish a valid claim for forced resignation, the employee must prove that:
They had no real choice but to resign: The resignation must not be truly voluntary. It must be the result of employer conduct that left the employee with no other reasonable option.
The employer’s conduct led directly to the resignation: The employee must show that their departure was a direct response to the employer’s actions.
There was a breach of trust, safety, or contract: Examples include unsafe working conditions, persistent bullying, non-payment of wages, or significant changes to employment terms.
Common Examples of Forced Resignation
Unreasonable Workload
Assigning excessive tasks or setting unachievable deadlines can create a toxic work environment.
Workplace Bullying or Harassment
Verbal abuse, intimidation, exclusion, or threats can compel an employee to resign.
Discrimination
Unfair treatment based on race, gender, age, disability, or religion can form the basis of a constructive dismissal claim.
Underpayment or Wage Delays
Not receiving wages or being regularly underpaid is a clear breach of employment law.
Unsafe Work Conditions
Exposing employees to physical danger or psychological harm creates grounds for resignation with legal backing.
Legal Validity of Forced Resignation
An employer cannot legally force an employee to resign. If an employee resigns because of their employer’s actions (such as bullying, unsafe conditions, or major breaches of their contract) the resignation may be treated as a constructive dismissal under the Fair Work Act 2009 (Cth).
In these situations, the law may view the resignation as if the employer terminated the employee, which could entitle the employee to certain legal remedies, including:
Unfair dismissal compensation (via the Fair Work Commission)
Severance pay and other termination entitlements
Unpaid wages or accrued leave
Damages for breach of contract, if the employer failed to meet their legal obligations
Legal Test for Constructive Dismissal
To prove forced resignation or constructive dismissal, the following elements must be satisfied:
- Intent or Probable Result: We must determine if the employer wanted to fire the employee or if their actions made the employee quit.
- Lack of a genuine choice: We need to think about if the employee had a real choice to quit because of how the employer acted. If the employer’s actions or changes left the employee with no choice but to resign, constructive dismissal exists.
- Direct impact on employment: The employer’s actions must have a direct or consequential effect on the termination of employment. This means that the employee’s resignation must result directly from the employer’s actions. Without these actions, the employee would have continued the employment relationship.
- The employer’s behaviour is the main cause: Proving that the employer’s actions or behaviour were the main cause of the resignation is crucial. The employer’s actions made it impossible to continue working or accept. Consequently, the employee had no other reasonable option but to resign.
- Evidence of unfair treatment: If there is evidence of unfair treatment, changes in working conditions, bullying, pay cuts, demotions or other behaviour that significantly changes the nature of the employment and forces the employee to resign.
Whether these factors and the situation of the job consider it constructive dismissal. However, it is important to consult an employment lawyer to assess the specific details of the case.
When Forced Resignation Does Not Apply
Remember: Not all resignations are considered forced. Some examples that may not qualify as constructive dismissal include:
Resignation after a job role change without objection
Leaving after being suspended
Fear of disciplinary action
Resigning due to poor management style (without legal breaches)
Read more on unfair dismissal cases and eligibility.
Case Study: Hobbs v Achilleus
In Hobbs v Achilleus, the employee, Hobbs, resigned after facing continuous wage irregularities. Despite raising concerns, the employer failed to resolve the issue. The Fair Work Commission found that the resignation was not voluntary and classified the situation as constructive dismissal, awarding Hobbs compensation.
Key takeaways from the case:
No valid reason for dismissal was provided.
The employer failed to give Hobbs notice or an opportunity to resolve issues.
The Small Business Fair Dismissal Code was not followed.
Employee Rights After a Forced Resignation
Employees who have resigned under force or experienced constructive dismissal can pursue specific rights:
1. Unfair Dismissal Claim
If the above elements and legal test have been met, employees can lodge an unfair dismissal application with the Fair Work Commission within 21 days of resignation.
Learn more about submitting an unfair dismissal application. And remember, there is a strict 21-day time limit on applications.
2. Legal Action for Breach of Contract
If an employer breaks the contract, employees can sue them. This can involve seeking damages or other remedies through the court system.
3. Severance Pay and Unpaid Entitlements
Workers who quit or were constructively fired may also be eligible for severance pay, unpaid wages, or benefits. This includes accrued leave, bonuses, or any other benefits owed according to their employment contract or relevant laws.
Frequently Asked Questions
What should I do if I feel forced to resign?
Raise your concerns in writing, document any incidents, and seek legal advice before resigning.
Can an employer legally force someone to resign?
No. Any form of coercion or hostile conduct that pressures an employee to resign may lead to a constructive dismissal claim.
What legal consequences do employers face for forced resignation?
They may face unfair dismissal claims, pay compensation, and suffer reputational damage.
Can offering money to resign be considered forced resignation?
Yes, if the offer is coercive or presented in a way that pressures the employee to leave.
How can employers prevent forced resignation claims?
By ensuring open communication, fair treatment, regular performance reviews, and compliance with employment law.
