Constructive Dismissal: Know Where You Stand

7 June 2018

Sometimes employers find themselves with employees that just aren't right. You know the type, employees who don't fit the culture of the organisation, or they report made-up issues or gossip too much, or employees that are just not getting the work done properly.

When such issues arise, employers are often tempted to suggest that an employee resigns (as opposed to being fired), so that they can still get jobs in the future.

On the other hand, some employers (none reading this, I am sure) will actively make it difficult for an employee to do their work or fail to provide a safe working environment.  Or an employer could make detrimental changes to an employee's contract like a demotion or a reduction in an employee's shifts.

Sometimes an employer will even go so far as to fail to prevent or punish an employee's co-workers who harass or discriminate against them.  Employees in these situations may eventually choose to resign, which might sound music to an employer's ears.  After all, all the employer needs to do is accept the resignation, pay all entitlements and it is finally over.

Unfortunately, all the scenarios above could land an employer in front of the Employment Court defending an unfair dismissal.

But the employee clearly resigned!  There is a resignation letter.  Surely there was nothing the employer could do about it?  This is what is called a constructive dismissal, and yes there was something the employer could have done about it.

Constructive dismissal occurs where an employee has been forced to resign from employment because of conduct (or lack of conduct) engaged in by the employer.

It might sound far-fetched, but more and more we are seeing constructive dismissal claims brought against clubs.  So how can you help prevent them?

First, clubs should ensure they check their process when they want to discipline or terminate an employee.  Performance management is a good tool to ensure procedural fairness for the employees.  Second, have in place clear policies and procedures to address different workplace issues such as bullying and harassment, workplace grievances and the like.  And third, club management should be aware of the risks involved when suggesting a resignation to an employee or accepting a resignation that alludes to any employee having "no choice but to resign". 

Club executive and management must have clear lines of responsibility regarding employment.  Members of the executive must not feel tempted (no matter how well meaning their intentions) to step in on employment matters which should be dealt with by the club manager.  It is often in this scenario that the process break downs and the club is exposed to claims of constructive dismissal or personal grievance.

Finally, seek advice whenever you are unsure of managing an employee relationship.

(SOURCE: Weda Ringo - ClubsNSW Member Enquiries Advisor, ClubLIFE May 2018)

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