Constructive Dismissal 

Constructive dismissal happens where an employer fundamentally breaches your contract of employment and you resign in response to that breach. If this happens, you can make a claim to the Employment Tribunal.  

There isn’t actually a dismissal 

The term constructive dismissal is somewhat misleading in that there is no dismissal in this kind of case; rather the employee resigns in response to the employer’s conduct. There is an obligation on the employee to prove the equivalent of a dismissal: that the employer’s conduct was so serious as entitle the employee to leave immediately. 
If you have been dismissed, you should consider whether you have a claim for unfair dismissal or wrongful dismissal

Criteria for making a claim of constructive dismissal 

There must be a breach of the employee’s contract.  
The breach must be sufficiently serious to justify the employee leaving or it must be the last in a series of events which, cumulatively, entitle the employee to resign. 
The employee must leave in response to the breach and not for an unconnected reason. 
There must not be a significant delay between the employee’s resignation and the breach otherwise the employee will be treated as having waived the breach. 
In most cases an employee can only make a claim of constructive dismissal if they have worked for their employer for two years’ in continuous employment. There are exceptions, for example if the breach of contract is because of discriminatory behaviour. 

The breach of the contract of employment 

A claim of this type is not about the fairness of an employer’s conduct or its unreasonableness as such. It is about whether the employer broke an important term of the employee’s contract.  
The fairness of the employer’s conduct may have a part to play in deciding whether a breach has occurred, but a successful claim depends on the employee’s contract and whether it has been broken. 
It is not necessary for the employee to have a written contract to make a claim of constructive dismissal. If an employee is employed then a contract exists whether its terms are written down or not. Any terms that aren’t expressly agreed in writing may be implied by law. For example, a term that an employee will be paid for the work for which he or she is employed (and has carried out) will always exist, even if it hasn’t been put into writing. 
Whether an employee relies on an express or implied term, the breach must be serious. The legislation that creates the right to claim constructive dismissal, s.95 (2) (c) of the Employment Rights Act 1996 says that the employer’s conduct must be such that the employee is entitled to leave immediately without giving notice (which contractually the employee is usually required to do). 
Put another way, the employee is allowed to break his or her contract by not giving notice because the employer has behaved so poorly. Notice may be given by the employee; the employee may want or need to give and work notice for financial reasons. The key question is whether the breach of contract would justify immediate resignation. 

The breach must be sufficiently serious to justify the employee resigning 

The breach of contract must be serious. A minor or trivial breach is not enough. 
Breach of contract may be caused by a single incident. It may also happen where there are a series of acts or a course of conduct over time which cumulatively amount to a serious breach of contract. 
Most constructive dismissal cases are concerned not with an explicit or express term of the employee’s contract but an implied term of some kind. Implied terms are those that exist in a contract but are not written into the contract. 
In constructive dismissal cases the implied term that employees most often rely on is a term which creates an obligation of trust and confidence between the employer and the employee. It is well established that such a term is present in every employment contract. An employer can break this contractual term by, without reasonable and proper cause, acting in a way calculated or likely to destroy or seriously damage the relationship of trust and confidence between the employer and the employee. 

The employee must leave in response to the breach of contract 

If an employee leaves for another reason and not the employer’s breach of contract there is no constructive dismissal. This may happen if an employee has decided to move jobs or change careers entirely and has resigned for that reason not because of what the employer has done. However, it isn’t necessary for the employer’s breach of contract to be the only reason for an employee resigning for a claim of constructive dismissal to succeed. The employee can have mixed reasons. If, for instance, the employer has broken the employee’s contract and the employee wants to move to another job a claim can still be made. The conduct has to be part of the reason but it doesn’t have to be the sole reason, as long as it is an effective cause of the employee’s decision to resign. 

There must not be a significant delay between the breach of contract and resignation 

If there is a delay in the employee resigning there is a risk that the employee will be deemed to have waived the breach or, in plain language, agreed to put up with it. This is sometimes known as affirming the contract. 
If the employee delays the breach may become part of the employee’s contract. A reduction in hours, for example. An employer might without the employee’s agreement change working hours from full-time to part-time. If the employee doesn’t take action reasonably quickly the ‘new’ hours will become the contractual hours and the breach will be treated as waived. 
It’s difficult to say how long a delay will amount to acceptance of the employer’s conduct. An employee will be allowed some time to consider their position before the right to take action is lost. Each case depends on its own facts so the best that can be said is that the employee shouldn’t wait too long before resigning if he or she wants to make a claim of constructive dismissal. 

Examples of conduct causing constructive dismissal 

There are a considerable number of ways in which an employer might seriously breach a contract of employment. It is necessary to analyse the facts of each case and apply to those facts the principles of constructive dismissal before concluding that constructive dismissal may have occurred. Please note the bullet points below are examples only. Every case is different and a decision in a previous case on its particular facts does not bind a judge in another case, though it may be helpful as guidance.  
employer unilaterally reducing pay: 
employer unilaterally changing the employee’s job duties; 
employee being ordered to work hours he or she hadn’t contractually agreed to work; 
employer requiring employee to work more than a reasonable distance from home without there being a clause in the contract obliging the employee to travel; 
false accusations of dishonesty; 
serious breach of disciplinary and grievance procedures by the employer;  
sexual harassment; 
discriminatory acts. 

Compensation for constructive dismissal 

If a successful claim is made, compensation will be awarded based on the employee’s financial loss caused by the constructive dismissal.  

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