Constructive Dismissal

People rarely arrive in our rooms saying they were constructively dismissed. They say they quit, and then they say it in a tone that makes clear they do not think quitting is what happened.

We are Richard and Helena Boyd, and across 21 years from our rooms in Inglewood we have sat with a lot of people in the months after they walked out of a job they could no longer stay in. We are psychotherapists rather than lawyers, so what follows is general information and not legal advice. What we can tell you is how the law frames it, and what the experience does to a person, which is the part nobody prepares you for.

What Is Constructive Dismissal?

Constructive dismissal occurs when an employee resigns, but the resignation was not really a free choice, because the employer’s conduct left no reasonable option.

The legal significance is straightforward. An employee who leaves their employment voluntarily ends the employment relationship with no right to bring an unfair dismissal claim, because they left. Constructive dismissal is the exception. Where the employer’s conduct effectively forces the resignation, and you were effectively forced out rather than choosing to go, the law can treat the ending as a termination initiated by the employer rather than a genuinely voluntary departure.

Australian practice sometimes calls it forced resignation or constructive termination. The Fair Work Commission generally uses forced resignation.

Constructive Dismissal In Australian Law

The framework sits in the Fair Work Act 2009, and the wording matters.

Section 386 defines dismissal to include where a person “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”. That single sentence is what an entire constructive dismissal claim turns on, and every word of it gets argued over.

Note what it does not say. It does not say the employer intended you to leave, and it does not require a formal act of termination. It asks whether you were forced. That is an objective question about the employer’s actions rather than a question about how badly you felt.

The Test The Commission Applies

Two limbs matter, and knowing them tells you what evidence to gather.

The first is whether the employer took some action either intended to bring the employment to an end, or which had the probable result of bringing the employment relationship to an end. The probable result limb is the useful one, because it means a manager who claims they never meant to push you out can still fall inside it.

The second is whether you had any effective or real choice but to resign. The key question is not whether resigning was reasonable, but whether it was the only reasonable option left to a reasonable person in your position, and whether any reasonable alternative existed at the time.

That is why the employee’s decision is examined so closely. A person who was forced to resign and a person who had a reasonable choice and took the easier one can look identical from the outside, and the Commission has to separate them.

The High Threshold, In Plain Terms

This is where most constructive dismissal cases fail, so it is worth being blunt.

The threshold is high. Not every disagreement, difficult manager or unhappy period at work is a constructive dismissal, and a personality clash almost never is. Even conduct that makes resigning a perfectly sensible decision may not qualify. The reported examples include a delay of a few days in paying wages, which was a breach but was found not to be of a nature that made resignation the probable result.

The bar is a serious breach or a sustained course of unreasonable conduct that creates a genuinely untenable situation, not a workplace you have come to dislike.

Mohazab v Dick Smith Electronics

The leading Australian authority is a case from 1995, and the facts are memorable.

Mr Mohazab worked for Dick Smith Electronics and was questioned about missing stock. In that meeting he was told he could resign or face a police investigation, and he was handed a resignation letter to sign. He signed it.

The court found that the ultimatum amounted to the employer initiating the end of the employment, and that the resignation was not genuinely voluntary. On paper this was a voluntary resignation, with a signed letter to prove it. In substance it was a termination at the employer’s initiative. That gap between the paperwork and the reality is exactly what the doctrine exists to close.

Common Examples Of Constructive Dismissal

Constructive dismissal arises from conduct in a fairly consistent set of shapes.

• A significant reduction in pay, or a unilateral change to core employment terms
• Significant changes to duties, hours or location imposed without agreement
• A significant demotion, or removal of duties that hollows out the role
• An ultimatum to resign or face something worse, as in the Dick Smith case
• Ongoing bullying or harassment that the employer fails to address after being told
• An employer’s failure to act on serious safety concerns
• A hostile work environment allowed to continue without intervention
• Being isolated, excluded or sidelined as a deliberate course of conduct
• Where an employer fails to pay wages properly over a sustained period

A single serious incident can be enough. More often it is a course of conduct, which is harder to feel in the moment and easier to prove later if you kept records.

Constructive Dismissal Versus Unfair Dismissal

These get confused constantly, and the relationship between them is simpler than it looks.

Unfair dismissal is the claim. It applies where employment was terminated at the employer’s initiative and the dismissal was harsh, unjust or unreasonable. Constructive dismissal is not a separate claim but a route into that one. You are arguing that although you resigned, the ending was really termination initiated by the employer, so the unfair dismissal jurisdiction is open to you.

That is why so much of a constructive dismissal claim is spent on a threshold question about whether you voluntarily resigned at all, before anyone examines whether the treatment was unfair.

The 21 Day Time Limit

This is the single most important practical point on this page.

An unfair dismissal application must be lodged with the Fair Work Commission within 21 days, running from the day after your resignation takes effect. Extensions are granted only in exceptional circumstances and they are rare. Being upset, being unwell, or not knowing the rules existed are generally not enough.

Twenty one days is very short when you have just left a job in distress. People routinely spend the first fortnight sleeping badly and telling the story to family members, and discover the deadline after it has passed. If you take one thing from this article, take the date.

How To Prove Constructive Dismissal

You are trying to show that the employer’s conduct leaves a reasonable person no choice but to resign, and that is an evidence problem.

Written evidence beats recollection every time. Keep a personal log with dates, times, who was present and what was said, written on the day rather than reconstructed later. Put complaints in writing to your manager or HR, even where you have already raised them verbally, because a verbal complaint that goes nowhere leaves no trace and a written one does.

Keep any medical records that connect workplace stress to your health, and keep copies of your employment contract, position description and payslips. Do this while still employed, since access to systems disappears the day you leave.

Before You Resign

The most common mistake we see is resigning first and getting advice afterwards.

Seek legal advice before you resign, not after. Once the resignation is in, your options narrow sharply and the clock starts. An employment lawyer or the Fair Work Ombudsman can tell you in one conversation whether what is happening to you is likely to clear the threshold, and what to document in the meantime.

Also be aware that timing counts. Resigning within a reasonable period of the conduct supports the claim, while staying for many months can be argued as acceptance of the new conditions. That is a matter for professional advice on your own facts rather than a rule you should apply yourself.

Your Resignation Letter

If you do resign, the letter becomes evidence, and most people write it in the worst frame of mind of their working life.

A resignation letter that thanks everyone for a wonderful opportunity will be produced against you. So will one that reads as an angry outburst. What tends to serve people best is short, factual and unemotional, stating that you are resigning as a result of specific conduct that you have raised and that has not been addressed.

We are not lawyers and this is exactly the point at which to speak to one, ideally before the letter is sent.

Where Workplace Bullying Fits

Bullying is one of the most common paths into a constructive dismissal claim, and it has its own rules.

The short version is that an employer’s failure to act on bullying it has been told about can form part of the course of conduct. The bullying itself is also addressed separately, including through stop bullying orders at the Fair Work Commission, which is a different process with different timing.

We have written about the psychology of it at length in our article on workplace bullying, so we will not repeat that ground here.

The Part The Legal Process Does Not Cover

Whatever happens with a claim, something else is happening to you at the same time.

People who have been forced out of a job describe a specific kind of damage. Not just the money and not just the career interruption, but the experience of having your own judgement turned against you. Most have spent months being told the problem is their attitude, their performance or their sensitivity, and by the time they leave they half believe it.

That is why so many people cannot let it go even after a settlement. The legal process can restore the money. It does not restore the confidence, and it was never designed to.

How We Help After A Forced Resignation

We work with the aftermath, and it usually has three layers.

The first is the acute stress. Many people arrive with genuine trauma symptoms, including broken sleep, hypervigilance, a racing heart when an email arrives and a physical reaction to driving past the old office. Our approach is Integrative Body Mind Psychotherapy, which works with the nervous system directly rather than only talking about it, and Richard’s Sensorimotor Psychotherapy training is the relevant piece where the stress response has become locked in.

The second is the self doubt, which is the layer that lasts longest. The third is what comes next, where career counselling (/career-counselling/) and coaching are often more useful than therapy alone, because a person who has been undermined for a year cannot see their own value clearly enough to interview well.

What This Looks Like In Practice

These are composite examples drawn from our clinical work, with identifying details changed.

A woman in her forties resigned after eight months of having her responsibilities removed one at a time, with nothing ever said directly. She had no single serious incident to point to and assumed that meant she had no case. Her lawyer disagreed, because a course of conduct was exactly what the section describes. The work with us was mostly about the year she spent believing she had imagined it.

A man in his fifties took a settlement and then could not apply for anything for four months. He was not lazy and he was not depressed in the ordinary sense. Every job advertisement triggered the same physical bracing that his old workplace had, and that had to be worked with in the body before any career conversation was possible.

A younger worker was given the resign or be investigated ultimatum, signed on the spot, and only later learned about the Dick Smith line of cases. He had missed the 21 days. What we worked on was not the legal loss but the humiliation of having complied under pressure, which he had turned entirely against himself.

Frequently Asked Questions

The questions people ask us most often about this, and our honest answers.

Is Constructive Dismissal Hard To Prove?

Yes. The threshold is high, the employer will argue you voluntarily resigned, and the evidence usually sits in conversations nobody wrote down. That is why documentation while you are still employed matters so much.

Can You Claim Constructive Dismissal If You Resigned Months Ago?

The 21 day limit runs from your resignation taking effect, and extensions are only for exceptional circumstances. If you are outside it, an employment lawyer can advise whether any other avenue applies to your situation.

Does A Toxic Manager Count?

Sometimes. A hostile work environment or sustained unreasonable conduct can qualify, particularly where you reported it and the employer failed to act. A personality clash or a manager you find difficult generally does not.

Should You Resign To Strengthen Your Position?

No. Resigning is the step that limits your options and starts the clock. Get legal advice on your own circumstances before you do anything, however untenable the situation feels.

What Happens To Your Notice Period?

That depends on your employment contract and how the resignation is characterised, and it is one of several reasons to have a lawyer look at the paperwork before you send it.

Where To Go From Here

Constructive dismissal is a narrow doctrine that exists for a real problem, which is that an employer can end someone’s job without ever formally ending it. The law asks a cold question about whether a reasonable person had any real choice. Whether you clear that bar or not, what happened to you still happened.

If you think you may have a claim, speak to an employment lawyer or the Fair Work Ombudsman now rather than later, because of the 21 days. Nothing on this page is legal advice.

If the other half of it is the part you are carrying, that is our work. We see people through the stress, the self doubt and the rebuilding, at our Inglewood rooms and online across Perth, with no referral needed.

Book a session with us or read more about our career counselling.