By

Mike Toten

Mike Toten is a freelance writer, editor and media commentator.

A disability services provider employer was found to have forced an employee to resign when it changed her employment contract in several significant ways without consulting her. Although the employer claimed its intention was to protect the employee’s declining health, the Fair Work Commission (FWC), found that the changes, and the way they were implemented, left the employee with no option but to resign.

Facts of case

The employee was a disability support worker. Following a second heart attack while employed, she was off work for several weeks and the employer made changes to her contract for when she returned to work. Those changes were:

  • Working hours reduced from 76 to 60 per fortnight
  • Removed from her preferred night shift
  • Moved to a less convenient work site

The employee lodged a grievance against the changes, which the employer did not address. The employee was then certified unfit to work and made a workers’ compensation claim, and resigned seven weeks later.

The employer claimed it had consulted with her about the changes, and made them because of concerns about her health and safety, as well as her domestic situation.  It claimed the employee resigned of her own free will. It did not respond to the grievance on advice from its workers’ compensation insurer.

Decision

The FWC found that the hours reduction and other changes were not communicated to the employee as part of any consultation process, but done unilaterally. That plus failing to respond to her grievance and the subsequent workers’ compensation claim and absence from work caused the employee great distress, and therefore left her with no option but to resign.  The changes to hours alone would have been enough to cause that.

Therefore, the employer had repudiated the employment contract and dismissed the employee, who was awarded compensation of $29,068.

A Full Bench of the FWC rejected the employer’s application to appeal the decision.

What this means for employers

If proposing significant changes to an employee’s employment contract, it is essential to consult with the employee and secure his/her agreement to them before implementation. Even if the changes are well-intentioned (as appears to be the case here), changes that are detrimental to the employee (such as reduced working hours) can result in a claim of unfair dismissal, adverse action or (in this case) constructive dismissal.

Constructive dismissal cases are rare, and tend to be complicated. The key element is that the employee was put in a situation where he/she had no option but to resign.

Read the judgment

Employer’s application to appeal