Constructive dismissal

Constructive dismissal refers to the situation where an employee resigns directly as a result of a significant breach of their employment contract by their employer. This can lead to an employment tribunal claim being lodged by the employee.

What are the rules on constructive dismissal?

Employees who resign due to a fundamental breach of the employment contract should make this clear at the time of their resignation.

In general, employees need to lodge a claim of constructive dismissal within 3 months of the effective date of termination of employment. To prove that a dismissal occurred, the employee would provide evidence that they were constructively dismissed. Furthermore, they should have worked for a minimum of 2 years for a constructive unfair dismissal claim. There are some exceptions to the ‘qualifying service’ rule, for example where the dismissal was related to maternity leave or whistleblowing.

Behaviour that amounts to a breach of contract

There is no exhaustive list of conduct or behaviour that would amount to a breach of contract - one serious breach of the employment contract, or a pattern of more minor infractions, may result in a constructive dismissal claim. Common types of breach include:

  • non-payment of salary, either in part or in full
  • sudden demotion without good reason
  • unreasonable changes to working practices (eg sudden change of location or working hours)
  • refusal by employer to make reasonable adjustments for a disability
  • being asked to ignore health and safety issues or work in dangerous situations without adequate protection (eg asbestos removal without personal protective equipment)
  • failure by employer to address bullying or harassment in the workplace
  • unfounded allegations of misconduct or poor performance

It should be noted that unreasonable behaviour by an employer will not necessarily lead to a successful establishment of constructive dismissal; there must have been a fundamental breach of an express contractual term or the implied duty of mutual trust and confidence.

What is the relationship between constructive dismissal and unfair dismissal?

It is important to make a distinction between constructive dismissal and unfair dismissal. The former relates to an employee resigning as a result of a breach of the employment contract, whilst the latter concerns whether the employee was dismissed for a fair reason. If an employee succeeds on a constructive dismissal claim, it will enable them to lodge a claim for wrongful dismissal or unfair dismissal as well.

Dealing with constructive dismissal

Employers should ensure they implement effective grievance procedures to help stave off any constructive dismissal claims; communicating the grievance process to employees will allow them voice any concerns at an early stage. However, if an employee resigns on grounds of constructive dismissal, it may still be to avoid litigation by discussing the situation and offering a settlement agreement. Ask a lawyer about your specific situation.

How can an employee claim constructive dismissal?

It is good practice for employees to raise their complaints as a written grievance with their employer. But if this fails, they can lodge a claim of constructive dismissal with an employment tribunal. The first step is to notify ACAS of the intention to make a claim by submitting an Early Conciliation Notification form. This will open up the opportunity to reach a settlement through conciliation - which is cheaper and faster than going to a tribunal. However, if both parties do not agree to conciliation or this does not resolve the dispute, ACAS will then provide the employee with an Early Conciliation Certificate; this can be used to officially begin an employment tribunal claim. As the time limits and rules relating to bringing a constructive dismissal claim are complicated, employees are advised to Ask a lawyer regarding their specific situation.