What is Constructive Dismissal?

What is Constructive Dismissal?

Constructive dismissal is where an employee decides to resign from their employment not because of their desire to leave their employment, but because of their employer’s actions.

Some circumstances that can may be considered constructive dismissal is if an employee resigns because of:

  • The employer asking the employee to resign from their position.
  • An unsafe workplace is provided and the employer refuses to make it safe to work.
  • The employer allowing other staff to harass and discriminate against the employee.
  • The terms and conditions of the employee’s contract changing without prior consultation with the employee.
  • Reducing the employee’s hours.
  • The employer cutting an employee’s wage without discussing with the employee.

The law

The Fair Work Act 2009 (Cth) has provisions for an employee to be classified as “dismissed” if they resigned from their employment because of their employer’s actions. This includes actions where an employer failed to act as well due to an unsafe workplace or harassment.

Bringing a constructive dismissal claim

An employee can bring a claim for constructive dismissal through an Unfair Dismissal claim or General Protections claim through the Fair Work Commission (if the business is incorporated and meets all the criteria) or through the Industrial Relations Commission (if the business is not incorporated).

An employee must prove that they only resigned due to the employer’s actions and it wasn’t due to their desire to leave their place of employment.

Further, they must meet the criteria of an unfair dismissal claim – meaning that the dismissal must have been:

  • Harsh, unjust or unreasonable;
  • Dismissal was not a cause of genuine redundancy;
  • If employed by a small business – wasn’t in line with the Small Business Fair Dismissal Code.

Limitation period

Employment claims have a very strict limitation period. Any claim through the Fair Work Commission must be commenced by 21 days from the date of dismissal, and for the Industrial Relations Commission it must be commenced by 28 days from the date of dismissal.

If you’re seriously considering making a constructive dismissal claim, you should seek legal advice from an employment lawyer before you make a claim.

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