Clear communication protects business in unfair dismissal case

29 March 2022

A recent unfair dismissal case involving a security and emergency response service offers valuable insights on how to handle employees who resign during a performance management process.


The Fair Work Commission (FWC) dismissed the claim by an employee alleging he was forced to resign in exchange for four weeks’ pay after it assessed the business’s communications. The learnings from this case are vital for businesses facing similar situations.

Overview of the case

The worker was employed as a security manager and was required to attend client sites. Feedback from customers indicated he was failing to attend sites. In response, the business opened a performance management process resulting in a performance improvement plan. However, the poor customer feedback continued.

The business wrote to the worker reiterating its dissatisfaction regarding his performance and failure to improve. The letter contained 10 allegations and requested a response and a meeting with the employee.

The worker attended the meeting and provided his response. After considering the response, the business confirmed it considered all allegations were either substantiated or partially substantiated and that it had formed the view the worker was “not suitable” for the role.

Finally, the letter requested the worker ‘show cause’ as to why his employment should not be terminated. He did not respond and instead commenced personal leave. This continued for several months, with the most recent certificate stating he was unfit for work until 15 October 2021.

On 1 October 2021, the business called the worker to explain the upcoming period of personal leave would be unpaid as his paid entitlement was exhausted. During this conversation, the worker asked for the outcome of the performance management process.

The business explained there was no outcome as the worker had not responded to the show cause letter, but that termination was a possible outcome. The business also explained the worker had a choice to return work when he was fit, which would also involve finalising the performance management process. Or he could choose to resign if he did not wish to return to work and/or finish the performance management process.

If the worker selected the latter, the business offered four weeks of pay.

On 6 October 2021, the worker sent a text message to the manager stating, “I hereby tender my resignation. I feel I have been left with no other choice. Can you please let me know when I can expect my final pay”.

A short time later, the manager replied to encourage the worker to reconsider his resignation. The manager recommended the worker reflect for a 48-hour period before confirming his position. The worker responded stating, “I didn’t verbally confirm my resignation yesterday. You advised that if I didn’t resign, the most likely outcome for my return to the office would be termination”.

Further correspondence was exchanged and demonstrated that the business had taken time to explain the options open to the worker. The correspondence again gave the worker an opportunity to consider his position and confirm his intentions regarding returning to work.

On 11 October 2021, the worker sent an email confirming his resignation. The business accepted the resignation and again reiterated the worker had been told that dismissal was a possible outcome if he returned to work, and that the business had not received any response from him to the show cause letter. In line with the resignation, the worker’s employment was terminated.

The worker filed an application for unfair dismissal with the FWC.

FWC decision

In his application, the worker argued he was given an ‘ultimatum’ of either being dismissed or resigning and receiving four weeks’ pay. The business contended the worker had freely chosen to resign. In other words, “he could have chosen to remain employed and engaged with the disciplinary process but decided instead to resign and receive a payment”.

The FWC considered the evidence including all communications and correspondence. It had to determine whether employment was terminated at the employer’s initiative, which would include the worker feeling forced to resign on account of the conduct of the business.

The FWC accepted the business had carefully explained dismissal was a possible outcome, but it was waiting for a response to the show cause letter. In addition, the commission accepted the worker considered the prospect of resigning for the four weeks of pay was an attractive option.

Overall, the FWC was comfortable the worker’s decision was adequately considered and reaffirmed.

Learnings for business

The correspondence relied on in this case was carefully crafted, strategic and well-communicated.

As highlighted by the FWC, the business consistently reiterated the choices available to the worker and didn’t hurry the process.

This set of facts can often present as a challenge to businesses and it can be easy to fall into the trap of making a snap decision. However, by taking the time to assess the position in each phone, email and text conversation, the business was able to provide the FWC ample evidence that the worker had freely resigned.

How the Victorian Chamber can help

Under current employment legislation, costly consequences await organisations found to be recruiting, managing or terminating staff incorrectly. For more information, please attend our training course: Managing Termination, Redundancy and Unfair Dismissals - Remote Learning.

For assistance on any aspect of your employment obligations, please call the Victorian Chamber Workplace Relations Advice Line on (03) 8662 5222. Complete members can receive unlimited general advice on a range of workplace issues including occupational health and safety, WorkCover, workplace policies, disciplinary procedures and more.

Our services to members include:

  • Workplace Relations Advice Line – Trying to deal with workplace issues alone but don’t know where to start? Before you take any action, call our Workplace Relations Advice Line.
  • Fair Work representation – Managing claims in the FWC can be one of the most stressful and costly issues for your business. If you have received a claim, consider whether you need to engage a representative from the Victorian Chamber.
  • Wages and entitlements – Is your business paying its employees correctly? When it comes to wages, awards and entitlements, ensure that you comply with the law with professional support from our Workplace Relations Advice Line and consultants.
  • Health and safety compliance – Does your Business understand and comply with its legal obligations for workplace health and safety? Would your Business benefit from safety accreditation? Raise the occupational health and safety (OHS) standards at your workplace to meet regulations with the expertise of our health, safety and wellbeing consultants.


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