Courting constructive dismissal


Forcing an employee into a situation where they have no choice but to leave is as illegal as any other form of bullying.

A dismissal is ‘constructive’ when the employer’s actions leave the employee with no reasonable choice but to leave the employment. Read our case study.

The case of photographer Samantha Sagona

Photographer Samantha Sagona hated being bullied and intimidated by her boss, but she tolerated it because she was well paid and gaining good experience in her job.

Then, in August 2012, she announced her pregnancy to the directors of the business, and the treatment got worse. In the next three weeks, the directors made various demands including that she work additional hours, take long service leave after her Christmas break and sign a new contract that based her remuneration on the achievement of unreasonable targets.

The directors indicated they would refuse to consider part-time work after maternity leave, and threatened her with redundancy and pay cuts if she didn’t meet her targets. Her supervisory duties were removed and another employee was noticeably preferred in the allocation of work.

The final straw was when Sagona wrote to the directors to explain how upset she was about her treatment. She was summoned to a meeting and subjected to a tirade of aggression, abuse and threats, including accusations of being unprofessional and stupid.

She left the employment and commenced proceedings under the general protections scheme of the Fair Work Act. In the case Sagona v R & C Piccoli Investments Pty Ltd & Ors (2014), Judge Whelan said she was satisfied Sagona had been constructively dismissed because of her pregnancy and ordered the company to pay her $174,097 in compensation and a further $61,000 in penalties.

When is a dismissal constructive?

A dismissal is ‘constructive’ when the employer’s actions leave the employee with no reasonable choice but to leave the employment. This typically occurs when the employer breaches a fundamental term of the employment contract, or acts in a way that shows it no longer intends to be bound by the contract’s terms.

The employer may or may not desire or intend the end of employment, yet the result of the unlawful and intolerable conduct may be the employee walking away from the job. The constructive breakdown of employment will expose the employer to liability for unfair dismissal, discrimination complaints and breach of an employment contract.

A common constructive dismissal scenario is where an employer breaches its implied contractual obligation to take reasonable care for an employee’s health and safety by allowing them to be subjected to workplace bullying. Other examples are where the employer makes a significant change to an employee’s remuneration or working conditions without notice or consultation, or directs the employee to perform tasks that are unethical or illegal.

The courts and tribunals rarely find that constructive dismissal arises from a one-off event. Usually, the employee has to have made some attempts to object to the behaviour and seek to stop the intolerable conduct before a court will deem that an employee who has walked away from a job has been pushed.

What can HR  do?

HR professionals need to recognise the warning signs of an employee being exposed to constructive dismissal and act quickly to intervene. It is HR’s responsibility to explain the legal consequences to a line manager who is engaging in constructive dismissal practices. An organisation that ignores an employee’s cry for help will increase its exposure to constructive dismissal claims.

This article is part of a four-part series on constructive dismissal. Keep reading about bullying, managing misconduct and performance management

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Courting constructive dismissal


Forcing an employee into a situation where they have no choice but to leave is as illegal as any other form of bullying.

A dismissal is ‘constructive’ when the employer’s actions leave the employee with no reasonable choice but to leave the employment. Read our case study.

The case of photographer Samantha Sagona

Photographer Samantha Sagona hated being bullied and intimidated by her boss, but she tolerated it because she was well paid and gaining good experience in her job.

Then, in August 2012, she announced her pregnancy to the directors of the business, and the treatment got worse. In the next three weeks, the directors made various demands including that she work additional hours, take long service leave after her Christmas break and sign a new contract that based her remuneration on the achievement of unreasonable targets.

The directors indicated they would refuse to consider part-time work after maternity leave, and threatened her with redundancy and pay cuts if she didn’t meet her targets. Her supervisory duties were removed and another employee was noticeably preferred in the allocation of work.

The final straw was when Sagona wrote to the directors to explain how upset she was about her treatment. She was summoned to a meeting and subjected to a tirade of aggression, abuse and threats, including accusations of being unprofessional and stupid.

She left the employment and commenced proceedings under the general protections scheme of the Fair Work Act. In the case Sagona v R & C Piccoli Investments Pty Ltd & Ors (2014), Judge Whelan said she was satisfied Sagona had been constructively dismissed because of her pregnancy and ordered the company to pay her $174,097 in compensation and a further $61,000 in penalties.

When is a dismissal constructive?

A dismissal is ‘constructive’ when the employer’s actions leave the employee with no reasonable choice but to leave the employment. This typically occurs when the employer breaches a fundamental term of the employment contract, or acts in a way that shows it no longer intends to be bound by the contract’s terms.

The employer may or may not desire or intend the end of employment, yet the result of the unlawful and intolerable conduct may be the employee walking away from the job. The constructive breakdown of employment will expose the employer to liability for unfair dismissal, discrimination complaints and breach of an employment contract.

A common constructive dismissal scenario is where an employer breaches its implied contractual obligation to take reasonable care for an employee’s health and safety by allowing them to be subjected to workplace bullying. Other examples are where the employer makes a significant change to an employee’s remuneration or working conditions without notice or consultation, or directs the employee to perform tasks that are unethical or illegal.

The courts and tribunals rarely find that constructive dismissal arises from a one-off event. Usually, the employee has to have made some attempts to object to the behaviour and seek to stop the intolerable conduct before a court will deem that an employee who has walked away from a job has been pushed.

What can HR  do?

HR professionals need to recognise the warning signs of an employee being exposed to constructive dismissal and act quickly to intervene. It is HR’s responsibility to explain the legal consequences to a line manager who is engaging in constructive dismissal practices. An organisation that ignores an employee’s cry for help will increase its exposure to constructive dismissal claims.

This article is part of a four-part series on constructive dismissal. Keep reading about bullying, managing misconduct and performance management

Leave a reply

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More on HRM