Forced resignation

Having the ‘resign, or you will be sacked’ conversation

A recent decision of the Fair Work Commission (‘Commission’) has given the ‘green light’ to employers to quickly and validly dismiss troublesome employees if they refuse an earlier offer to ‘fall on their sword’ and resign.  

Mr Grundy, a welder, applied to the FWC alleging he had been unfairly dismissed by employer Brister & Co and was, therefore, entitled to six weeks’ pay. On the other hand, his employer argued that Mr Grundy was fairly dismissed for serious misconduct without notice (within the meaning of s386(1)(a) Fair Work Act) after four incidents of abusive and threatening behaviour in the workplace. However his employers claimed that, out of respect, Mr Grundy was given the option to first resign instead, which he inevitably took as the better of the two options before him. 

In this article we will take a look at the reasons why the Commission dismissed Mr Grundy’s claim, and what this means for employers faced with the ‘resign or you will be sacked’ conversation.

When can an employer ‘put their foot down’ on employee misconduct?

This case suggests the Commission is likely to support the eventual termination for an employee who shows clear patterns of misconduct, even if the resultant dismissal is hasty or clumsy.

Over a six month period, Mr Grundy had twice aggressively confronted his supervisor over ‘bullying’ claims made against him, had to be separated from a co-worker who was operating in the same building, and had sworn crudely at a director when asked to remove an inflammatory note attached to his toolbox.

Commission Deputy President, Peter Anderson, concluded that Mr Grundy’s actions amounted to ‘ongoing insubordination’ that was incompatible with a continuing employment relationship and, therefore, that his forced resignation was valid. However, Anderson DP was critical of the intense pressure that was put on Mr Grundy to resign, particularly considering that he thought he was in a meeting to air his own grievances over his supervisor’s conduct, and there was little opportunity to respond when he learnt he was going to be sacked.

Further, it was worrying to Anderson DP that the employer had failed to keep a written record of Mr Grundy’s various incidences of misconduct, and did not provide a him a written warning or give him a chance to respond prior to his dismissal.

Interestingly however, it was found that the absence of a written warning does not necessarily mean Mr Grundy was denied procedural fairness in his dismissal, considering the context and circumstances surrounding his actions (including oral warnings given and the severity of the conduct).

Anderson DP also suggested that smaller and unsophisticated employers (as Brister could certainly be classified given their actions) may be cut some slack when it comes to proper dismissal procedure, as ‘business size and capability’ are matters to be considered in these types of claims. 

How to have the ‘jump or you’re pushed’ conversation

There are important lessons to take out of this case when it comes to understanding how employees should handle the dismissal or forced resignation of troublesome employees:

1. If giving an option to resign, allow enough time for the employee to consider the option

Anderson DP noted the timeframe between Mr Grundy’s dismissal, the offer of resignation and the signing of the resignation letter was ‘very short’, and that the employee was not given time to seek independent advice or have a support person present. Therefore, a safer option is to allow employees a period to consider the resignation offer before confirming the decision to dismiss. Eventual dismissal would be considered far more reasonable if the employee was, for example, left in the meeting room for a short while to think or ‘phone a friend’. Better yet, the employee could be sent home to consider the offer overnight, before returning to work (or a meeting offsite) to provide their response.  

2. Consider the ‘reasonableness’ of the options presented to the employee

Though Anderson DP concluded that Mr Grundy had ‘no effective or real choice’ but to resign, the employer’s conduct was deemed reasonable in the circumstances of this case. Considering the nature of the employee’s serious misconduct, it was held that the decision to offer Mr Grundy the option of resigning with a positive oral reference was a respectful acknowledgement of the harsh consequences that a dismissal may have on him seeking further employment in the future. Alternatively, it may have been appropriate in the circumstances for Brister to have allowed Mr Grundy to submit himself for rigorous performance and conduct management with the understanding that his continued employment relied on a positive result. Generally, an employer will be in hot water with a ‘resign or be sacked’ ultimatum, and much safer with a watered-down ‘resign or be vigorously performance managed’ option.

3. Written (or at least oral) warnings should be given prior to any dismissal decision

Inevitably, the process taken by Brister & Co in dismissing Mr Grundy was deemed ‘deficient’, though not ‘unreasonable’ or ‘unfair’ overall. For example, Brister and Co conceded that their decision to dismiss Mr Grundy was made merely the evening before he was inevitably dismissed, despite no written warnings given to Mr Grundy first. If you have bad apples like Mr Grundy spoiling the bunch, it is best to explain their misconduct in a brief written warning or letter, to better defend any resultant (and inevitable) employment separation.

Need help with employee dismissal or claims?  

The laws and regulations around employment termination are complex, and as this case demonstrates, it is not always clear how the Commission might view an employer’s conduct when forcing troublesome employees to resign.

There are a number of simple steps that can be taken to prevent costly and burdensome disputes over an employee’s dismissal. We can provide you the specialist advice specific to the employee’s and your actions before effecting their dismissal, turning a difficult process into a relatively stress-free one.

contact us at Workplace Wizards or 03 9087 6949

Further, visit our website to download our free guides on ‘Effective Disciplinary Processes and Warnings’, ‘Effective and Thorough Investigations’ and ‘How to Successfully Navigate Unfair Dismissals’. Finally, for more information on forced resignation regulations, have a look at our previous blog and let us know your views on this interesting area of law!


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