Organisational Change and Forced Resignation: When Does a Resignation Become a Dismissal?
A recent Fair Work Commission decision provides useful guidance for employers undertaking organisational or governance changes where an employee subsequently claims they were forced to resign.
In a recent unfair dismissal case, Deputy President Dean of the Fair Work Commission (FWC) considered whether an employee who resigned during a substantial governance restructure had actually been “dismissed” for the purposes of the Fair Work Act 2009.
What happened?
The employee had worked for the Hawkesbury District Agriculture Association since 2018 and was its Administration and Business Manager.
The Association underwent significant governance changes, including adopting a new constitution and reducing its governing body from approximately 55 directors to a board of 12. It also introduced changes to financial and operational processes and engaged an external HR consultant.
The employee became dissatisfied with a number of these changes. She considered that aspects of her role and responsibilities had been removed and that she had been excluded from some decision-making processes.
She resigned in December 2025 and subsequently lodged an unfair dismissal application, contending that the Association’s conduct had effectively forced her to resign.
The Association objected to the application on the basis that the employee had resigned voluntarily and therefore had not been dismissed.
When can a resignation amount to dismissal?
Under section 386 of the Fair Work Act, a person can be considered to have been dismissed where they resign because they were forced to do so because of conduct, or a course of conduct, engaged in by their employer.
The Commission emphasised that the question is not simply whether the employer’s conduct contributed to an employee’s decision to leave. The circumstances must effectively leave the employee with no real, effective or meaningful option but to resign.
In this case, the Commission was not satisfied that threshold had been reached.
Employer entitled to make governance changes
The Commission found that the Association’s board was entitled to introduce appropriate governance arrangements and ensure its compliance obligations were being met.
The changes to financial processes, HR arrangements and organisational decision-making were regarded as legitimate exercises of the board’s responsibilities. Importantly, the Commission was not satisfied that the changes were directed at the employee or intended to cause her resignation.
The Commission also considered that the employee had other options available to her before resigning, including raising her concerns formally with the board. It ultimately found that she had not established that she had no meaningful alternative to resignation.
As a result, the Commission found that the employee had not been dismissed within the meaning of the Fair Work Act, and her unfair dismissal application was dismissed.
What does the decision mean for employers?
The decision confirms that employers remain entitled to make legitimate organisational, operational and governance changes, even where an employee strongly disagrees with those changes.
An employee’s dissatisfaction with a restructure, changed procedures or altered decision-making arrangements does not, by itself, turn a subsequent resignation into a dismissal.
However, employers should still exercise care when implementing significant workplace changes. Decisions should have legitimate business reasons, appropriate consultation requirements should be observed, and employers should avoid conduct that could reasonably be interpreted as deliberately creating circumstances intended to force an employee to resign.
For employers contemplating significant organisational change, keeping clear records of the business reasons for the changes, consultation undertaken and communications with affected employees can be particularly important if a resignation is subsequently alleged to have been forced.
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