Constructive dismissal for good reason

Workplace Directions

Michael Ross v Fall & Associates Pty Limited [2012] FWA 8111

The applicant was employed by the respondent as a real estate consultant from May 2003. The applicant’s wife also worked for the respondent and they operated a branch of the business from their home.

On 30 May 2011, the respondent emailed the applicant and his wife with concerns over the lack of sales activity over a period of time. A meeting was arranged but the applicant became unwell and went on sick leave from 5 July 2011. During the period of sick leave, the applicant received requests from the respondent in relation to listings and inspections of properties which the applicant complied with as best he could.

The applicant attempted to return to work in late August 2011. On the evening of 25 August 2011, he was arrested by police at his home on charges of assault and trespass with regard to a tenant of a property under their management. The applicant was taken into overnight custody and released on bail on 26 August 2011. He was stood down with pay while the respondent investigated the incident.

On 9 February 2012, the Tasmanian Magistrates Court dealt with the charges against the applicant. One of the two assault charges was not proceeded with and was formally dismissed. The applicant’s legal representative sought a sentence indicator from the Magistrate in respect of the second charge leading to a plea of guilty with no conviction recorded and an order to restrain the applicant from approaching the victim. The charge of trespass was not the subject of any substantial hearing and again, no conviction was recorded.

The applicant resigned on 5 March 2012. He contended before Fair Work Australia that he was forced to resign because of the conduct of the respondent and sought a remedy for unfair dismissal.

Commissioner Ryan described (with reference to various previous cases) that constructive dismissal is a termination that is brought about by an employer and which is not agreed to by the employee. A termination of employment at the initiative of the employer is a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship. It is not sufficient to demonstrate that the employee did not voluntarily leave his or her employment. The termination must result from some action on the part of the employer intended to bring the employment to an end. It may often be the case that the action of the employer which is complained of is constituted by a single act. However, this is not always the case and a course of conduct over a period of time may be intended or have the probable result of bringing the employment relationship to an end.

Commissioner Ryan noted that the actions of the respondent in terms of incorrect information provided to the police as to the issue of trespass were highly prejudicial to the applicant and were clearly not consistent with the respondent wanting to retain an ongoing employment relationship. Also, shortly after the prosecution of the Applicant in the Magistrates Court, the respondent arranged to have a large advertising sign removed from the Applicant’s property.

In all the circumstances, Commissioner Ryan came to the conclusion that the respondent’s actions were intended to bring the employment relationship with the applicant to an end. As such, it was determined that the applicant resigned from his employment, but was forced to do so because of conduct or a course of conduct engaged in by his employer.

Despite that, the termination was not considered harsh, unjust or unreasonable.

The applicant admitted that he had a knife in his hand when he engaged in the verbal altercation with the tenant on 25 August 2011. The tenant called police and the 000 record included threats made by the applicant in respect of their dog, which was described as ‘fearsome’.

For a reason for dismissal to be a valid reason it must be sound, defensible and well founded and must not be capricious, fanciful, spiteful or prejudiced.

Commissioner Ryan stated that if the verbal altercation with the tenants had not involved a knife, it would most likely not amount to a valid reason for dismissal. However, the conduct of the applicant in that regard reflected poorly on the respondent and the real estate profession generally. That was considered a valid reason for the dismissal. It was not necessarily conduct that was inconsistent with a continuation of the contract of employment and therefore may not justify a summary dismissal. Accordingly, the applicant was entitled to payment in lieu of notice.

Authored by Emma Reilly, Partner, Canberra.


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