Constructive dismissal overview

What is constructive dismissal?

Constructive dismissal occurs when an employee is forced to resign due to their employer's serious breach of the employment contract. This breach must be fundamental, such as unilateral pay cuts, harassment, or unsafe working conditions, forcing the employee to resign in response. The employee must prove they resigned specifically because of the employer's conduct and didn't delay unreasonably in doing so.

Constructive dismissal is a form of unfair dismissal claim available to employees who have 2 years continuous employment with an employer.

The most common scenarios which result in employee’s resigning and claiming constructive dismissal are :-

• Employer seeks to unilaterally and significantly change the employee’s terms and conditions - he most clear and obvious examples would be a reduction in pay, reduction in hours, significant change of role or demanding that the employee works in a different location some way away; or

• The employee is placed in an impossible position due to harassment, bullying, intimidation or discrimination; or

• Health & Safety - whether working conditions or failure to support disability needs.

For many employees, the dilemma of whether to resign with the risk of not finding alternative employment quickly and having to start an Employment Tribunal claim which will take some months to proceed, is extremely difficult.

The dilemma is increased because there is a need to act fairly quickly in resigning where the employer is fundamentally breaching the employment contract. Continuing to stay in employment, even whilst protesting, where an employer has fundamentally changed your contract terms is generally inconsistent with being put in the position where you feel you have no choice but to resign.

Where you feel that your future employment is untenable because of the way you are treated in the workplace, the position is often different and this is where strategy and timing can become really important.

Is resigning and claiming constructive dismissal the best option?

If things have happened or are continuing to happen in the workplace which are impacting your mental or physical health, the employer has a duty of care towards you. If things have got to a point where you no longer feel you can continue in the work environment and may have to resign, your options in this awful scenario are often better than based on a clear attempt by the employer to change your contract.

Resigning and claiming constructive dismissal solves some problems for employers. You are out of the workplace, meaning they don’t have to deal with what has been happening to you, you are likely short of money and the employer doesn’t pay you anymore. The employer is in a  strong position to negotiate some form of pay off, on it’s terms, at the best time for the employer, at any time leading up to the hearing of any Employment Tribunal constructive unfair dismissal claim you start.

However, If you don’t resign, the employer has an ongoing problem, especially if you raise a grievance also and are potentially signed off from work for medical reasons. An employer will, at this point, often recognise that there will be an ongoing employment problem which could last for quite a few months, with you remaining as a very unhappy employee, entitled to all your contractual rights to payment if you do not resign, leaving the employer with an ongoing problem and uncertain financial implications.

There are some potential risks to you as employee if you do not get your strategy and timing right, as at some point, you may need to resign to successfully claim constructive dismissal and you will probably need to raise a grievance.

A very common outcome where the employee is able to take the initiative as above is to negotiate a mutual severance package, known as a settlement agreement.

How we can help with constructive dismissal claims

With highly experienced and astute employment lawyers in many locations throughout England & Wales, we advise employees and employers on employment contract issues, dealing with the breakdown of the employment relationship, grievances and resignations and constructive dismissal claims. We also negotiate employment termination terms. Please do get in contact to discuss how we can help you.