Constructive Dismissal is where an employer has committed a serious breach of contract, entitling the employee to resign in response to the employer’s conduct.
The employee is entitled to treat him or herself as having been “dismissed”, and the employer’s conduct is often referred to as a “repudiatory breach”.
It can be difficult for a non-legal person to understand why your resignation should be referred to as a “dismissal”. All you need to know is that in legal terms, the actions of your employer (the “constructive part”), has led to your resignation (the “dismissal” part). The law then treats the resignation as a form of unfair dismissal by your employer or to quote the full correct terminology, ‘Constructive Unfair Dismissal’.
It is not enough to show merely that your employer has behaved unreasonably. There must be a fundamental breach of either an express contractual term, or the implied term of “trust and confidence”. Furthermore, you must have resigned because of the actual breach- not for some other reason. You should also make it clear at the time that you regard yourself as having been “constructively dismissed”. It may not just be one incident that amounts to a breach of contract by your employer. Sometimes there is a continuing pattern of behaviour or incidents which, taken as a whole, amount to a breach (even though they may not be in isolation). For example, there may be a history of bullying and harassment. If there is a continuing pattern of behaviour, however, the ‘Last Straw’ which leads you to resign should relate back to the previous acts, so that added together they all amount to a total breach of trust and confidence. It doesn’t matter if the final act by your employer is minor, as long as it is enough (together with the previous series of incidents) to amount to a fundamental breach.
Can my employer try to explain why there has been a breach to defeat a Constructive Dismissal claim?
No. The test for whether or not there has been a breach is an objective one. Whether or not your employer intended to break the contract and the circumstances leading up to it is irrelevant. For example, if you are demoted and moved to an unsuitable and cramped office space, the fact that this can be explained by economic pressures is irrelevant.
Do I need to be careful not to be seen to accept a breach by my employer?
Yes, you do need to be very careful not to be seen to have ‘waived’ any breach by your employer. This could happen where there is a long delay between your lodging a grievance against the breach and the grievance being heard. Or it may be simply that you are taking far too long to make a decision to resign once you become aware of a breach. This can particularly be an issue if you are off work on long term sickness, as you are more likely to delay taking any steps in relation to a breach by your employer. A waiver could also arise if you do something which signals an acceptance of the breach, for example, by sending an email stating that you are happy with arbitrary changes to your contract.
It is possible for you to continue to work in the short term ‘under protest’ following a breach by your employer, and to reserve your full rights in writing. However, there will come a point in time where you must decide if you are going to resign and make a claim. If you do not do so, as mentioned above, you may well have been deemed to have positively affirmed your contract, and a claim may not then be possible. A tribunal will always determine whether or not you have waived the breach depending on the facts of each case.
How long do I need to be employed to make a claim for Constructive Dismissal?
You need to be employed for 2 years, save for limited exceptions.
Examples of claims that can be made for Constructive Dismissal
Examples of breaches of contract by an employer entitling an employee to claim constructive dismissal include:
- A forced reduction of your salary, or the threat of a reduction.
- Being demoted without good reason or in breach of contract.
- Allegations of poor performance which are unfounded.
- Making unwarranted findings or reporting you to a Regulator without foundation, or an opportunity to respond.
- Disciplinary proceedings which are manifestly unreasonable.
- Ignoring or failing to deal properly with your grievance.
- A complete change in the nature of your job.
- Harassment or bullying at work.
- Stress at work, that has not been properly addressed (this includes being overworked and not being properly supervised).
- Failing to make reasonable adjustments where you have a disability.
- Being forced to work in breach of Health and Safety laws.
What is the difference between Constructive Dismissal and Unfair Dismissal?
A constructive dismissal is where you are forced to resign in response to your employer’s conduct, which has made your position untenable. Although it’s referred to as a “dismissal” in law, it is in practical terms a resignation.
An unfair dismissal, on the other hand, is where you have been sacked in a way that is unlawful. This is usually because either one of the 5 fair reasons for dismissal do not apply, or there has been a failure of process, or it is not reasonable for you to have been dismissed.
Lodging a Grievance- An Important First Step
It is recommended, and expected under the ACAS Code of Practice, that employees lodge a formal grievance against employers in Constructive Dismissal claims before taking any steps to resign. The reason for this is that it gives your employer an opportunity to resolve the dispute. It is also possible for an employee to raise a grievance in their resignation letter.
The failure to lodge a grievance before and when resigning also means an Employment Tribunal can reduce any compensation you are awarded by up to 25%. However, an Employment Tribunal will consider all the circumstances of the case including whether it was practical for the employer to raise a grievance either before or when resigning.
For further information or to discuss your situation at work, please contact us.
