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Constructive Dismissal:

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Constructive Dismissal: what is it?

Constructive dismissal can be categorised in three main types.  These which have been identified by the New South Wales Industrial Relations Commission and can be broadly described in the following terms:

  • Forced resignation, where an employee is pressured to resign from work but where that employee would ordinarily not want to have resigned in the first place;
  • Where the employee is “squeezed out” by making continued employment intolerable and thus resulting in the employee’s resignation;
  • Where the employee is unilaterally demoted by the employer or where that employer acts in a detrimental way, so that the employee resigns.

These matters are heavily evidence based and the law is constantly evolving in relation to what will constitute duress, “squeezing out” or detriment. A Constructive Dismissal Lawyer who regularly deals with constructive dismissal cases will need to familiarise himself with the details of a complainant’s case as well as conduct diligent legal research. This is necessary so that the matter can be approached on the basis of a current understanding of the law as applied to the facts.  In addition, it is critical to properly assess the merits of the matter and the factual matrix at hand, to determine the strength of any perceived or potential case.

Conduct of Employer: implied terms of Employment Contract

In very broad terms, the law has implied a term into every employment contract that an Employer cannot conduct himself in such a manner that the relationship of trust between him and the Employee is destroyed. Establishing a breach of this implied term is a process whereby the facts of the case and any evidence is investigated and analysed.

“Squeezing out” is often a way that Employers try to get an Employee to resign by making the conditions of employment so intolerable that the Employee decides to resign. This is usually the case when an Employer wants to avoid paying compensation for unfair dismissal (because the employer will argue that the Employee resigned and was not dismissed) or avoid obligations to pay a redundancy. Another situation where “squeezing out” may be common is where the Employer wants to force changes to the terms of the employment that the Employee would otherwise not accept. A good way to spot a constructive dismissal in these situations is when the Employee feels that he or she has been placed in a situation where he or she must sign a new agreement or accept amendments to the existing agreement “or else”. Nevertheless, there are exceptions to this, such as where the existing agreement allows an Employer to vary the terms of employment in certain circumstances. 

Our Sydney Employment Lawyers have acted for an assisted many clients with constructive dismissal issues and legal matters. 

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