Worker Claims Forced Resignation Due to Payroll Issues
                     Worker Claims Forced 
Resignation Due to 
Payroll Issues
The Fair Work Commission (FWC) recently handled an 
unfair dismissal claim by a software designer against a 
technology company. The worker alleged he was forced 
to resign due to non-payment of wages, while the 
employer argued he voluntarily resigned after refusing 
to transfer to their UK payroll. This case underscores 
the complexities of managing international employees 
and highlights the need for clear communication and 
careful consideration of tax and compliance issues 
when staff work remotely from overseas locations.
The worker, a British national residing in Australia, 
began his employment with the technology company in 
April 2021 as a software designer. His contract stated he 
would work from within Australia. However, in August 
2021, he was authorized to work outside Australia 
“until further notice” and subsequently relocated to the 
UK with his children. While working from the UK, he 
continued to be paid through the Australian payroll 
system, with Australian taxes deducted. This 
arrangement lasted nearly two years, during which 
time he spent most of his time in the UK and Japan, 
with occasional visits to Australia.
In September 2022, the worker initially resigned and 
proposed becoming a contractor. However, after 
discussions with his manager, he remained an 
employee and continued working from the UK.
In June 2023, the company’s financial controller raised 
concerns about the tax risks associated with having an 
Australian employee working long-term in the UK. This 
led to discussions about transferring the worker to the 
UK payroll. The head of people for the company 
informed him in July 2023 that he needed to move to 
the UK payroll if he intended to continue living there. 
The worker initially agreed but later raised concerns 
about his tax residency status, stating that according to 
his tax advisor, he had not been an Australian resident 
for tax purposes for the past two years.
Over the following months, the company made 
numerous attempts to have the worker sign 
documentation for the payroll transfer and provide UK 
bank account details. He consistently refused, insisting 
that the company first address his concerns about 
Australian tax reporting and amend its payroll reporting 
for the previous two years. Due to this impasse, the 
company removed him from the Australian payroll in
November 2023, effectively ceasing his salary 
payments. Despite this, he continued to work for the 
company without pay for several months. The head of 
human resources explained that by mid-March 2024, 
she had concluded that he was not prepared to engage 
with her. Although she wanted to make sure that he 
was paid his salary and backpay, she needed his UK 
bank account details.
In March 2024, the worker returned to Australia. He 
informed the company of his return and requested 
immediate payment of his outstanding salary and 
superannuation. The company advised that due to 
payroll processing timelines, he would receive his 
backpay in the May pay period. 
The head of human resources stated that unfortunately, 
by the time he had advised her on 4 April 2024 of his 
return to Australia, the cutoff for the April pay period 
had already passed. Dissatisfied with this response, the 
worker submitted his resignation on 26 April 2024, 
claiming he was forced to resign due to financial 
distress caused by the non-payment of his salary.
The FWC ultimately ruled in favour of the employer, 
finding that the worker was not forced to resign and 
therefore had not been dismissed within the meaning 
of the Fair Work Act. The Commission emphasised that 
the non-payment of wages was a consequence of the 
worker’s own decisions, stating that “the reason the 
worker was not paid for five months was because he 
refused to do what the company reasonably required of 
him, namely that he transfer to the UK payroll.” This 
underscores the Commission’s view that the worker’s 
actions, rather than the employer’s conduct, led to the 
non-payment of wages.
The Commission also noted that the worker had other 
reasonable options available to him before resigning, 
stating that “there were reasonable options open to 
the worker other than resigning. He chose not to take 
them.” In its conclusion, the Commission stated that it 
“rejects the worker’s contentions that other factors 
forced him to resign, whether individually or 
collectively. 
Many of these additional matters were first raised in 
the submission document that he filed the day before 
the hearing. It is simply not credible that bonus 
arrangements, the absence of pay rises, and the other 
matters to which the worker referred compelled his 
resignation.” This quote emphasises the Commission’s 
scepticism towards the worker’s additional claims and 
the importance of raising all relevant issues in a timely 
manner during unfair dismissal proceedings.
https://www.ikeep.com.au/