Full Bench overturns generous payout for “sound mind” resignation by struggling worker

Last month, a three-member Full Bench of the Fair Work Commission overturned the pre-Christmas decision of Deputy President Tony Slevin, which had awarded a “difficult” employee more than $30,000 compensation for his resignation, tendered after an extended absence prompted by mental health challenges.

As explored in our earlier article, Deputy President Slevin originally found the employee had “no effective or real choice but to resign” in March 2025, because he had been absent without any income (all paid leave entitlements were exhausted and his worker’s compensation claim was pending) and the employer had made attempts to engage with him about his ongoing employment despite a supervisor assessing the employee as being in a “very dark place” at the time. In coming to his conclusion that the employee’s resignation had been forced and therefore constituted an unfair dismissal, Deputy President Slevin overlooked confirmation offered by the employee’s doctor that he was in a fit mental state to tender his resignation, instead determining the employer should have afforded the worker “space to recover” before attempting to discuss his potential return to work. Deputy President Slevin awarded the employee $33,348.62 (gross), plus superannuation.

The employer won the right to challenge the decision, with the Full Bench confirming the appeal raised “issues of general importance” in relation to when an employee has been “dismissed”, specifically, “the circumstances in which it is not reasonable for an employer to act upon a resignation received in circumstances in which the employee is in a state of emotional distress for the purposes of s 386(1)(a) and what might constitute conduct ‘by his or her employer’ when assessing whether an employer was forced to resign for the purposes of s 386(1)(b) [of the Fair Work Act 2009]”.

The appeal was upheld on six of eight grounds argued. In part, the Full Bench observed that it was understandable being without pay for a period caused the employee “hardship”, but expressed, “we are unable to attribute those circumstances to the conduct of the employer”. Separately, the Bench also found that the Deputy President had originally misapplied the opinion of the employee’s doctor, delivered on request of the employer at the time of the employee’s resignation. The Full Bench explained the relevant issue was “whether the opinion of [the doctor] would have satisfied a reasonable person that [the employee] had the ability to make rational decisions in relation to his employment”; it was not an assessment as to whether the employee had recovered from his psychological condition more broadly.

Whilst it was not in dispute the employee was “not well” at the time of his resignation, the Full Bench was satisfied the evidence confirmed the employee had conveyed “a real intention to resign”, which was supported by the opinion of his doctor that he was “competent” to do so. In addition, the Bench noted that the employee personally “insisted” that he was of sound mind and “genuinely wanted to resign” and “did not seek to withdraw or resile from his resignation”.

Finally, in upholding the appeal and quashing the decision of Deputy President Slevin, the Full Bench confirmed they were unable to find that “the relatively small number of well-intentioned interactions” between the employer and employee in the month prior to his resignation caused him “to have no effective or real choice but to resign, particularly in circumstances in which [the employee] was instigating contact”. Finding the employee had not been dismissed, “he cannot have been unfairly dismissed for the purposes of s 385 of the [Fair Work Act 2009] and no remedy can be awarded”; his application “must be dismissed”.

Commonwealth of Australia (as represented by Services Australia) v Wilson [2026] FWCFB 82 (10 April 2026)