Can a Resignation Become a Termination?

In a recent decision of Fair Work Commission Deputy President Michael Easton, it was held that a resignation became a termination due to the employer’s conduct.

Facts of the case

In this matter, a manager of a transport company resigned from his employment and provided one month’s notice. 

A day after his resignation, the employee made a complaint to HR about perceived ‘psychological hazards in the workplace.’ It was suggested that the employee made this complaint so that the employer would let him finish up his employment early. 

The employee and company owner then discussed an early exit post-resignation. There was no discussion about whether the employee would still receive the balance of his notice paid in lieu.   

Ending employment early during notice period – caution to be applied: 

Ultimately, the Commission had to decide whether the employee had a real or effective choice to work out the balance of the notice period with pay. Generally:

1. if the employee has the choice to work the full notice period with pay after giving notice of resignation, but freely agrees to end the employment earlier, the employee is not dismissed. However;
2. if the employer’s conduct leaves the employee with no real choice but to end the employment earlier than the notified date (without payment for the balance of the notice period), then the employee is dismissed – either at the initiative of the employer or by way of a forced resignation.  

The Commission found that because there was no discussion at all about working, paying or not paying the balance of the notice period for pay it cannot be said that the employee freely agreed to make his resignation effective immediately. 

Lessons learnt 

If the employee was given an option of either: 

1. working out the notice period; or 
2. leaving immediately without payment for the balance of the notice period, and the employee elected to leave immediately; 

then the employment would have concluded as a resignation.

Next steps

This matter will now proceed to hearing to determine whether the dismissal was in fact unfair and, if appropriate, what remedy should be given to the employee.  

Should member clubs have any questions regarding this decision, feel free to contact the Workplace Relations team by visiting the Workplace Relations page on the ClubsNSW website.