Employment law- Constructive dismissal
What is Constructive Dismissal?
Constructive Dismissal is where an employer has committed a serious breach of contract, entitling the employee to resign in response to the employer’s conduct. The employee is entitled to treat him or herself as having been “dismissed” and the employer’s conduct is often referred to as a “repudiatory breach”.
It is not enough to show merely that your employer has behaved unreasonably – it must be a fundamental breach of an express contractual term, or the implied term of trust and confidence between the employer and employee. Furthermore, you must have left because of the breach and must make it clear when you resign that you regard yourself as having been “constructively dismissed”.
You do need t be careful not to have waive any breach by your employer. This can happen where there is a long delay in resigning in response to an employer’s breach- or anything which signals an acceptance of the breach. This could especially happen if you are off on long term sickness, so you do need to take early advice.
Examples of breaches of contract by an employer entitling an employee to claim constructive dismissal include:
- Reduction in pay;
- Demotion without reason;
- Allegations of poor performance which are unfounded;
- Unreasonable disciplining of the employee;
- Complete change in the nature of the job;
- Harassing or bullying an employee;
- Stress at work, that has not been properly addressed.
It may not just be one incident that amounts to a repudiatory conduct by the employer- sometimes there is a continuing pattern of behaviour or incidents which, taken as a whole, amounts to such conduct. In these circumstances, a tribunal may consider that such previous breaches which might otherwise have been considered waived or accepted by the employee, should not be treated as “waived”, but part of a continuing course of conduct.
How easy is it to claim for constructive dismissal?
You must have been continuously employed for a period of 23 months and 3 weeks in order to bring a claim, unless your case falls within one of the exceptions where no minimum service is required (i.e. where it relates to discrimination).
It is preferable that you lodge a formal grievance against your employer before you resign unless there is good reason not to do so. This will give your employer an opportunity to resolve disputes. Failure to lodge a grievance before issuing proceedings would entitle an employment tribunal to reduce any damages you are awarded by 25%. In addition, the lodging of a grievance provides a good springboard for negotiations to take place to resolve the dispute by other means, including the mutual termination of employment upon suitable terms.
You should also preferably state your reason for leaving at the time you resign. Where no reason is communicated to your employer at the time of your departure, a tribunal may be more inclined to conclude that you did not leave because of your employer’s conduct (unless you can show it was understandable why you did not want to refer to it -and there was sufficient other evidence of your employers conduct).
If you can show that your employer has fundamentally acted in a way that makes your position untenable and goes to the root of your relationship, your claim may well succeed. It is always best to obtain professional advice first, however, especially before you resign, as this is a pretty final step if you get it wrong.
Do I need to specify that I am claiming constructive dismissal when I resign?
To establish a claim of constructive dismissal, there is no absolute requirement that you must state your reason for leaving at the time. However, where no reason is communicated to your employer at the time, a tribunal might more readily conclude that your employer’s repudiatory conduct was not the real reason for your leaving. A tribunal may acknowledge that if you have been put in an outrageous and embarrassing position, that it is understandable that you would not want to confront your employer with your reason for leaving that that time. However, there must be some evidence that your employer’s breach was at least a factor. For this reason, it is always best to specify in your resignation letter why you are leaving, and after first having lodged an formal grievance.
What remedies are available for constructive dismissal?
The remedies available for constructive dismissal are exactly the same as those for unfair dismissal.
Unlike unfair dismissal, however, you must give credit for earnings received on what would have been your notice period.
When should a claim for constructive dismissal be made?
A claim for constructive dismissal should be made to the Employment Tribunal within a period of 3 months less 1 day from the date that you have resigned. However before you can make a claim, you now need to notify the intention with ACAS under their “early conciliation scheme”. This can have an impact on when the tribunal proceedings need to be lodged. For more information on tribunal time limits and process, please click here.