Unfair Dismissal vs. Constructive Dismissal: Understanding the Difference

Unfair dismissal and constructive dismissal are two distinct concepts in employment law, each with its own set of circumstances and legal implications. It’s essential to understand the difference between these terms to protect your rights as an employee in Australia.

Unfair Dismissal:

Unfair dismissal refers to the termination of an employee’s employment by the employer in a manner that is considered harsh, unjust, or unreasonable. Key points to understand about unfair dismissal include:

  1. Eligibility: To make an unfair dismissal claim, you must meet certain criteria, such as having completed at least six months of continuous service with your employer. Some exceptions apply, like being dismissed due to discriminatory reasons.
  2. Valid Reason: Your employer must have a valid reason for the dismissal, such as poor performance, misconduct, or redundancy. However, the reason must be based on reasonable grounds.
  3. Procedural Fairness: Employers are expected to follow a fair and lawful process when terminating an employee, which includes providing notice, allowing the employee to respond to allegations, and considering alternatives to dismissal.
  4. Harsh, Unjust, or Unreasonable: The Fair Work Commission assesses whether the dismissal was harsh, unjust, or unreasonable based on the individual circumstances of the case, taking into account factors like the severity of the conduct and the impact on the employee.

Constructive Dismissal:

Constructive dismissal occurs when an employee resigns from their job because of the employer’s conduct or actions that have made their working conditions unbearable. Key points about constructive dismissal include:

  1. Unbearable Working Conditions: The employee must prove that the working conditions had become intolerable, and a reasonable person in their position would also have felt compelled to resign.
  2. Substantial Changes: Constructive dismissal toxic workplace often arises from substantial changes in the terms or nature of employment, such as a significant reduction in pay, demotion, or continuous harassment.
  3. Resignation: The employee must have genuinely resigned; it cannot be a voluntary choice to leave without undue pressure from the employer.
  4. Notice Period: Even in cases of constructive dismissal, the employee is typically expected to provide notice of resignation in line with their employment contract or award.
  5. Legal Claims: Constructive dismissal can give rise to legal claims for unfair dismissal or breach of contract.

In summary, unfair dismissal is initiated by the employer’s termination of the employee, while constructive dismissal arises from the employee’s voluntary resignation due to intolerable working conditions caused by the employer. If you believe you’ve experienced either of these situations, it’s essential to seek legal advice and understand your rights and options for recourse under Australian employment law.


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