What is constructive dismissal?

An employee may be able to pursue a claim for constructive dismissal after they have resigned

A claim may arise where the employee terminates their own contract of employment, with or without notice, due to their employer’s conduct. It is not enough for the employee to show that the employer’s conduct has been unreasonable in some way.

The employer must have broken a significant term of the contract and the employee needs to show that the breach of the contract was the reason they resigned.

What is a breach of contract?

Breaches of contract by an employer entitling an employee to claim constructive dismissal can include:

  • allegations of poor performance which are unfounded

  • a unilateral significant reduction of your salary, or the threat of a reduction

  • being demoted without good reason

  • a complete change to the job role

  • being forced to work in breach of health and safety regulations

  • reporting you to a Regulator without foundation, or failing to give an opportunity to respond

  • disciplinary proceedings which are totally unreasonable

  • harassment or bullying

  • stress due to work that has not been properly addressed

  • failing to make reasonable allowances if you have a disability

It may not be one incident that amounts to a breach of contract by the employer. Sometimes there is a continuing pattern of behaviour or incidents which, taken as a whole, amounts to a breach.  However, the ‘final straw’ which leads the employee to resign must flow from the previous acts, so that they contribute to a breach of trust and confidence.

The employee also needs to be careful not to have waived any breach by the employer. This could happen when there is a long delay in lodging a grievance or in resigning after a breach.

How easy is it to claim for constructive dismissal?

You must have continuous employment with the same employer for a period of 23 months and 3 weeks (and not already be under notice which expires before 2 years) in order to bring a claim,unless your case falls within one of the few exceptions where no minimum service is required (i.e. where it relates to discrimination).

If the employee can show that the employer has fundamentally acted in a way that makes the employer’s position untenable and seriously affects the employment relationship, the claim may succeed. The onus is on the employee to prove that the employer was in breach and this differs to unfair dismissal claims where the employer needs to prove that there has been a fair dismissal.

Should I lodge a grievance?

It is recommended, and expected under the ACAS code of practice, that employees lodge a formal grievance against employers in constructive dismissal claims before taking steps to resign. The reason for this is that it gives the employer an opportunity to resolve the dispute. The failure to lodge a grievance before resigning also means an employment tribunal can reduce any compensation awarded by up to 25%.

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