A recent Fair Work Commission (FWC) decision has highlighted an important reminder for employers: not every resignation can be accepted at face value. (Access the decision here).
In this case, an employee was awarded more than $33,000 in compensation after the FWC found his resignation was not genuinely voluntary due to significant mental health distress.
The decision demonstrates that when resignations occur in complex or emotionally charged circumstances, employers may need to pause and consider whether the employee truly intended to resign.
The case in brief
The employee, a customer service officer with around two years’ service, resigned while experiencing serious mental health challenges linked to workplace conflict and unresolved complaints. At the time, he had provided a medical certificate stating he was unfit for work.
After a period of personal leave, he submitted a lengthy resignation email. The employer sought confirmation from the employee’s doctor that he had the capacity to make decisions about work, received confirmation, and processed the resignation immediately.
However, the FWC later determined the resignation was not genuine.
The Commission found the employee’s distressed state, together with the circumstances surrounding the resignation, meant he did not demonstrate a “real and rational intention to resign.”
The FWC also noted that the employee had been experiencing significant mental health difficulties and had previously been certified as having no capacity for work.
Importantly, the Commission found the employer had continued to engage the employee about workplace matters while he was medically unfit for work and had not adequately addressed the workplace issues that contributed to his distress.
In those circumstances, the FWC concluded the resignation was effectively brought about by the employer’s conduct and therefore amounted to a dismissal. The Commission ultimately found the dismissal was harsh, unjust or unreasonable and ordered the employer to pay more than $33,000 in compensation.
Below are three situations where employers should pause before treating a resignation as final.
When an employee resigns during a period of poor health
If an employee submits a resignation while on medical leave or experiencing significant health challenges, employers should exercise caution.
When an employee is medically unfit for work, questions may arise about whether they are in a position to make a clear and considered decision about their employment.
In these circumstances, it may be appropriate to acknowledge the resignation but encourage the employee to take some time to reflect before confirming their decision.
While there is no legal requirement to offer a cooling-off period, allowing an employee time to reconsider can help demonstrate that the decision was made voluntarily and without pressure.
Employers should also remain mindful of other personal circumstances that may affect an employee’s wellbeing and decision-making, such as family and domestic violence, grief, or worsening mental health conditions.
When an employee resigns in the heat of the moment
Resignations made during a confrontation, disciplinary meeting or emotionally charged conversation should be approached carefully.
In some cases, what appears to be a resignation may simply be a reaction to a stressful situation rather than a genuine decision to end the employment relationship.
Statements such as “You’re forcing me to resign” can be a warning sign that the employee feels pressured or believes they have no real choice.
Employers should take the opportunity to pause, check in with the employee, and explore whether there are underlying workplace issues that need to be addressed.
Offering support, allowing time to cool down, or suggesting the employee take leave before confirming their decision can reduce the risk of a later claim that the resignation was effectively forced.
When an employee issues an ultimatum
Occasionally, employees may indicate they will resign unless certain conditions are met, for example, a pay increase, promotion or changes to their role.
These situations can signal deeper concerns about workplace issues, retention risks or dissatisfaction.
Importantly, refusing an employee’s request is not the same as forcing them to resign. However, it is still worthwhile taking the time to understand the underlying issue before treating the resignation as final.
Where possible, employers should have an open discussion with the employee, explain the reasoning behind their decision, and consider whether any workplace concerns need to be addressed.
The key takeaway for employers
Resignations are often straightforward. However, when there are signs of distress, conflict or external pressures, accepting them too quickly can create legal risk.
Before processing a resignation, employers should take a moment to consider:
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Are there pressure factors influencing the employee’s decision?
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Has the employee had time to reflect on their choice?
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Are there underlying workplace issues that need to be addressed?
Taking a measured approach not only reduces legal risk but also supports a fair and respectful workplace culture.
Talk to Focus HR about how we can support you in managing difficult employee matters with confidence.