This article examines the Fair Work Commission’s decision in Bailey Richens v BDO Administration Pty Ltd [2025] FWC 3699, highlighting the risks of premature resignation and clarifying why invoking “constructive dismissal” can undermine, rather than support, a claim.
The concept of “constructive dismissal”
Some aggrieved employees consider the invocation of the words “constructive dismissal” akin to Ali Baba saying “open sesame”, expecting an array of legal remedies to magically become available. They even use the non sequitur, “sue for constructive dismissal”.
The reality is that constructive dismissal is often an own goal, depriving the employee of the possibility of a successful legal claim if they had only waited for the employer to take the step of terminating employment.
In the Fair Work Commission (FWC) case of Bailey Richens v BDO Administration Pty Ltd [2025] FWC 3699 (Richens), a decision of Deputy President Farouque, the concept of constructive dismissal in the context of general protections applications is explored.
Employees sometimes lost sight of the fact that in order for the FWC to have jurisdiction to deal with either a general protections involving dismissal or unfair dismissal claim there needs to be a “dismissal” (as defined in the Fair Work Act 2009 (Cth) (FWA)). While the FWA does contemplate situations where a resignation will be deemed to be a “dismissal”, that resignation needs to be “forced”. The phrase “constructive dismissal” is not used at all.
The relevant provision, section 386(1), is in the following terms:
(1) A person has been dismissed if:
(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer. (Emphasis added)
At paragraph 52 of Richens, Deputy President Farouque puts the concept of “constructive dismissal” in perspective:
“Finally, I observe that the expression “constructive dismissal” is not a verbal incantation which transforms a resignation into a dismissal. It is not even an expression used in the Act.
While it may be a superficially attractive concept, it is terminology of little actual utility. In that regard, it is useful for parties who may be disposed to somewhat loosely assert “constructive dismissal” in unfair dismissal or general protections dismissal applications made under s 394 or s 365 of the Act to consider the following observation of the Full Bench in Bupa:
[49] We do not consider it is particularly helpful in applying s.386(1) to refer to the concept of “constructive dismissal” — an expression nowhere used in the FW Act.
In saying this, we acknowledge that the expression has been used in a number of the authorities and also in the passage from the explanatory memorandum earlier quoted.
However, as explained by Greg McCarry in his 1994 article “Constructive Dismissal of Employment in Australia”, the concept of “constructive dismissal” in UK law was not a development of the common law, but rather a description of a statutory extension to the ordinary meaning of dismissal to encompass a situation where “the employee terminates the contract, with or without notice, in circumstances such that he is entitled to terminate it without notice by reason of the employer’s conduct”. That is a much wider concept than just “forced” dismissal and is conducive of confusion …”
How this was applied in Richens
The general protections application in Richens was dismissed. Farouque DP noted (at 43),
“It is abundantly clear to me that the applicant was not forced to resign because of the conduct or a course of conduct engaged in by the respondent.”
The applicant had resigned, contending that the resignation was not given voluntarily but constituted a “constructive dismissal compelled by a hostile work environment that was procedurally unjust”. She was a secretary in the legal practice of the respondent and had been placed on a performance improvement plan (PIP).
In relation to the PIP, Farouque DP observed (at 44):
“It is apparent that in late March 2025, the respondent had a concern about the applicant’s performance. The respondent took steps to address those performance concerns. There was nothing untoward or improper about this. The applicant is evidently of the view that her performance was at an acceptable standard. But there is no basis for me to conclude that the respondent’s concerns were capricious, irrational or generated for an ulterior, improper or unlawful purpose.”
In the judgment, Farouque DP considered each of the grievances of the applicant that formed the basis of her claim of “constructive dismissal”.
In turn, these were:
- The issuing of a warning on a day the applicant was absent due to illness. It had, however, been clearly foreshadowed by the respondent that a warning was going to be issued on this date, which was almost two weeks before the resignation was submitted.
- Certain screenshots between members of management of the respondent. It was held these were merely considering and assessing aspects of risk which may arise from one possible outcome of the performance process and, in any event, the applicant had no proper reason related to her duties to inspect and take screenshots of these messages. Other screenshots, which related to different employees, were also held not to assist the applicant in her claim she was forced to resign.
- A failure of the parties to reach an agreement for a mutual departure. This was described by Farouque DP as a proposition “obviously without foundation”. While proposals were exchanged the fact agreement was not ultimately reached does not support a conclusion the applicant was forced to resign.
- The applicant submitted she was subject to a hostile work environment that had a significant effect on her health and safety and that the respondent failed to provide a psychological safe and legally compliant workplace. It was held that while a PIP can be challenging, and may have a “detrimental psychological impact”, the conduct of the PIP by the respondent was reasonable and there was scant medical evidence provided by the applicant to support her assertions.
Farouque DP summed up his conclusions at paragraph 51:
“Ultimately, I am satisfied that the applicant was not forced to resign by the conduct or any course of conduct by the respondent. The applicant was therefore not dismissed within the meaning of s 386(1) of the Act. The applicant made a decision to resign and to characterise this resignation as a “constructive dismissal”. By doing so, the applicant pre-empted the outcome of the PIP, noting that the second PIP review meeting was to occur on 3 June 2025. The outcome of the PIP may well have been that the respondent assessed the applicant as not meeting the required standard of performance. In light of the respondent’s assessment of the applicant’s performance as at 20 May 2025, it may be that dismissal was the likely outcome of the PIP. But the applicant’s immediate resignation on 21 May 2025 and characterisation of that act as a “constructive dismissal” on the various grounds set out in the resignation letter, does not make her resignation a forced resignation within the meaning of s 386(1)(b) as explained in paragraph 47(2) of Bupa.”
In other words, it wasn’t a case of “too little, too late” but rather “too little, too soon” – the applicant did not have enough to support an assertion of a forced resignation and acted preemptively by resigning. If she had waited until the second PIP review meeting, when her employment might have been terminated by the respondent, she may then have had the ability to pursue her claim.
Conclusion
Employees who are intending to resign and then commence proceedings in the FWC for unfair dismissal or general protections involving dismissal need to carefully consider whether the circumstances support a conclusion that the resignation was forced. The fact an employer has initiated a performance process or misconduct investigation, which almost inevitably results in stress for the employee, does not necessarily provide a basis for an employee to demonstrate forced resignation. This will likely remain the case even if the process or investigation is less than perfect or textbook in approach. The relevant bar under the FWA is much higher than the widely held misconceptions about “constructive dismissal” would suggest.
