Constructive dismissal

Constructive unfair dismissal occurs when employees are forced to leave their job because of their employer’s breach of contract which may relate to its conduct or behaviour in the workplace. There are many reasons why employees choose to resign, they may feel like they have been harassed or treated unfairly by their employer or other employees, thus forcing them to resign. In circumstances such as this, the employee may be able to claim for constructive dismissal.

As an employer you may be accused of being in fundamental or serious breach of contract for a large number of reasons. For example, if as an employer you suddenly decide to make substantial alterations to an employee’s contract of employment, such as reduced pay, withdrawal of private benefits, removal of a company car, and such amendment to the contract is unilateral (so not agreed by the employee); then an employee may resign and assert a claim for constructive unfair dismissal. Such action is likely to give rise to a claim that by acting in this manner you have fundamentally breached the implied terms of mutual trust and confidence.

On the other hand, an employee may have grounds for claiming constructive dismissal when there has been a series of incidents that, when strung together, are very serious. Normally an employee would need to be able to show a ‘last straw’ or final event which then causes them to terminate their own employment. Employees should also resign promptly in the face of a fundamental breach.

When it comes to proving Constructive Dismissal in a Tribunal, the responsibility rests on the employee. An employer brought before a tribunal will usually argue that there was no fundamental breach of contract and trust and that they did behave in a reasonable manner, in accordance with the contract. By contrast in a straightforward unfair dismissal case, an employer needs to prove the dismissal was fair and legal, according to employment law and the contract.

If you are an employer, it is important that you are aware of your legal requirements regarding employment law so as to avoid claims for constructive dismissal. In order to bring a claim for constructive unfair dismissal an employee must have a minimum of two years continuous service. However, alternative claims may also arise which do not require a minimum length of service such as a claim for breach of contract.

As an employer it is important that you act reasonably throughout the employment relationship so as to avoid claims that you have acted in a way which enables the employee to dismiss themselves due to your conduct.

The difference between unfair dismissal and constructive dismissal.

Although the terms unfair dismissal and constructive dismissal are used interchangeably, there is in fact a distinct difference between the two. Unfair dismissal relates to a situation where the employer has terminated the employment relationship. If the dismissal is not for one of the 5 permitted reasons for dismissal the dismissal will be unfair. The dismissal can still be unfair if appropriate processes haven’t been followed or the Tribunal doesn’t believe the dismissal to be justified.

Constructive dismissal refers to any case when employees resign because they have been treated so badly by their employers that they are simply unable to continue working under such circumstances. It is often referred to as being “forced out” of a job.