Constructive Dismissal

Constructive dismissal occurs when an employee feels that their employer has breached their legal responsibility to provide a fair and reasonable working environment, to the point where they feel they have no other alternative but to resign from their position with the company.

This can be incredibly problematic for your business, causing both costly financial and reputational repercussions if taken to an employment tribunal by your former employee. Contact the experts at Employer Advice and our HR and Employment Law experts and avoid claims on your business. We’ve dedicated the last 40 years to helping businesses like yours stay legally compliant. Call today on 0800 470 3529.

What is constructive dismissal?

In layman’s terms constructive dismissal can be claimed by an employee if they feel that their employer has made alterations to their employment (job, working conditions, etc.) in such a way that the employee feels they have no option but to resign.

Normally the employer isn’t deliberately trying to trigger resignation by the employee, however it can be the case when the employee feels that they have been dealt with unfairly leading them to resign. This is considered a breach of contract by the employer and can either be a singular event or numerous instances over a prolonged period of time.

To press a case of constructive dismissal to an employment tribunal, there must be a fundamental breach of either of the following:

• The terms expressed in the employee’s contract of employment
• The implied terms, such as mutual trust and confidence in the employment agreement from both parties.
• The employee must have resigned because of the breach and not for other reasons.

For it to be considered constructive dismissal there are four elements to be taken into consideration.

• You breached the employment contract by one of the ways stated above.
• The employee must have resigned.
• The resignation was in response to the breach of contract.
• Resignation must be within a reasonable amount of time.

As an employer you should actively seek to resolve matters with your employee before they get to a stage where they feel like they have no option but to resign, this is technically referred to as a ‘repudiatory breach’.

Examples of constructive dismissal

Whilst there could be multiple examples that could be considered constructive dismissal there are several common examples that could potentially lead to an employee making a claim against your business.

• Forcing your employee to work at a different site without an agreement.
• Demoting the employee without warning.
• Not paying the employee their agreed salary amount.
• Forcing your employee to accept an unreasonable change in their role. (e.g , forcing someone on day shifts to work nights).
• Making your employee work in breach of health & safety laws.
• Allowing other employees to harass and bully an employee.

The constructive dismissal process

Before an employee can raise a case of constructive dismissal, the following steps should be followed first. This includes:

• Reporting complaints through the correct procedures
• Using external methods of resolution
• Seeking legal advice from a professional

Despite following the process your employee may still decide to resign. If your employee is going to claim constructive dismissal, it should be done as fast as reasonably appropriate for the situation.

In the event that an employee delays too much before raising the claim, an employment tribunal could view this as the employee accepting the situation.

Is it ever valid to be in breach of contract?

The short answer is no. Typically, you cannot justify a breach of contract.

However a defence that is often used is that the said actions do not constitute a repudiatory breach of contract. It is often left to the discretion of the employment tribunal as to whether this is the case or not.

Who can claim constructive dismissal?

As long as the individual working for your business has the employment status of ‘employee’, they can make a claim for constructive dismissal. Agency workers, those who are self-employed and those who are not guaranteed work cannot make a claim.

The employee will usually have to have 2 years of continuous service under their belt, including any statutory notice period. However in the following cases, 2 years is not a prerequisite for an employee making a claim:

• Whistleblowing
• Automatically unfair dismissal
• Discrimination

To successfully make a claim to take the case to an employment tribunal, the employee should raise the claim within three months and one day from the date they left employment.

How can employers avoid claims for constructive dismissal?

This is one of those situations for employers where prevention is better than cure. The best way to stop a claim for constructive dismissal is to prevent them from happening in the first place.

This can certainly save your business time and money, not to mention saving your business from the reputational damage that such claims can cause.

Best practice to avoid constructive dismissals

• Create and communicate clear policies.
• Seek to support employees when they raise problems or concerns at work.
• Invest in manager training.
• Help management with facilitating concerns around poor performance, conflict, and health and safety.
• Develop a company culture that is centred around mutual respect.

Contact Employer Advice and get expert advice tailored to your business

For support with constructive dismissal, or any other HR and Employment Law issue, contact Employer Advice on 0800 470 3529.

 

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