Woodley resigned from the Senate in August 2001 with three years to run in his second term, not long after the party's members voted for Natasha Stott Despoja to replace Meg Lees as the Parliamentary Leader of the Democrats. The reason given for his resignation was health reasons, but he also stated that "I don't have the same commitment to the new leadership team." Woodley was among the Democrat Senators who voted with Meg Lees to introduce the GST. The casual vacancy for his seat for the Democrats was filled by Senator John Cherry.