Constructive dismissal occurs when an employee is forced to resign because of the conduct of the employer.
To establish constructive dismissal, as an employee you must prove that:
- your employer’s actions directly resulted in the termination of your employment – i.e. you had no choice but to resign; and
- you would have remained in the job, but for your employer’s conduct.
Whether or not constructive dismissal has occurred will depend on the particular circumstances involved. The most common example of constructive dismissal is when an employer threatens to dismiss an employee if they do not resign.
Another example of constructive dismissal is when an employee is forced to resign because the employer fails to pay wages in full and on time.
In one case (Hobbs v Achilleus Taxation Pty Limited  FWA 2907), the Fair Work Commission held that the employee was forced to resign because his employer did not pay his wages. The employee was awarded compensation of $14,241 on the basis that the constructive dismissal amounted to unfair dismissal.