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Constructive dismissal - what does this mean?

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As most will be aware, an employer can terminate an employee’s employment either by giving notice or without notice where an employee is found to have committed an act of gross misconduct.

However, an employer should have a fair reason for the dismissal and follow a fair process, otherwise the dismissal will be unfair. Employees must have been continuously employed for two years or more to attract unfair dismissal and constructive unfair dismissal rights. 

But what happens if the employee feels forced to resign or wishes to leave voluntarily following the employer’s conduct? An employee may have grounds for a constructive dismissal claim if the reason for their resignation is their employer’s conduct.  If successful, an employee may be able to recover compensation from their employer for breaching a term of their contract of employment. For this reason, constructive dismissal claims are difficult to prove as there are a number of things for a tribunal to consider when deciding whether an employee had no option but to leave.

What must an employee prove?

It is important to note that an employee cannot simply decide to end their termination for trivial reasons in order to pursue a constructive dismissal claim. For the resignation to be justified, the employer must be in breach of a fundamental term of the employee’s contract of employment that shows the employer no longer wishes to be bound by those terms.

An employee must not delay in taking steps following any breach otherwise they may have ‘affirmed’ (accepted) any breach and will lose the right to pursue a legal remedy.

Some examples of behaviour by an employer which could justify an employee’s resignation include;

  • Consistently failing to pay an employee their correct wages.
  • Subjecting an employee to physical violence.
  • Demoting an employee suddenly and for no good reason.
  • Changing terms of the employee’s contract unilaterally and without notice.
  • Harassing, bullying or discriminating against an employee.

Guidance for employees

As constructive dismissal claims are difficult to win, it is advisable to seek independent legal advice before you resign from your employment and as soon as possible so that you do not prejudice your position.

In some circumstances, you may be able to negotiate a settlement with your employer where there may be grounds for a constructive dismissal claim.

If you would like to discuss this article in more detail, please do not hesitate to contact a member of the Employment Team.

This article is not a definitive statement of the law. It is designed as a free update on the law at the time of publishing. It is not a substitute for legal advice on specific facts and circumstances. BakerLaw LLP and/or the writer accepts no liability or responsibility for reliance on this article and recommends that you seek independent legal advice on your specific circumstances prior to taking any steps.