Constructive Dismissal Advice For Employees

Employees forced to resign as a result of their employer’s conduct in the workplace may be eligible to claim constructive dismissal.

Below we provide some constructive dismissal advice, from what this means and who is eligible, to how to approach a potential claim for constructive dismissal, both before and after resigning from your job.

What is constructive dismissal?

Constructive dismissal is where an employer has committed a serious breach of contract, to which an employee resigns in response to that conduct.

To prove a constructive dismissal you must be able to show that the breach committed on the part of your employer was fundamental or repudiatory, in other words, sufficiently serious to justify termination of the contract. You must also show that the actions of the employer led to your resignation.

Although there will have been no actual dismissal, if the conduct is sufficiently serious this will entitle you to regard yourself as having been dismissed in consequence of that conduct. As such, the law will then treat that resignation as a form of unfair dismissal, or “unfair constructive dismissal” as it is also commonly known.

Indeed, a constructive dismissal falls within the statutory definition of dismissal contained within section 95(1) of the Employment Rights Act 1996.

Under subsection (c) it is defined as arising where the employee terminates their employment contract, with or without notice, in circumstances in which they are entitled to terminate it without notice by reason of the employer’s conduct.

When does constructive dismissal apply?

As set out above, the test for constructive dismissal is effectively two-fold, namely, you must demonstrate both of the following:

• Your employer was in serious breach of your contract of employment
• You resigned in response to that breach, and not for some other reason

It is not enough to show that an employer has behaved unreasonably. There must be a fundamental breach of either an express contractual term within the contract of employment or, alternatively, breach of the term of mutual trust and confidence between the parties that is implied into all employment contracts.

This may not just be one single incident, but can be a continuing pattern of conduct that, taken together, constitutes a fundamental breach. By way of example, this could be a history of relatively minor bullying or harassment over a period of several months, by either work colleagues or the employer directly.

Yet to form the basis of a claim for constructive dismissal, the reason for resigning must relate not only to the most recent incident of bullying or harassment but also all earlier treatment, such that the cumulative effect is a breach of trust and confidence by the employer.

Equally, however, the reason for resignation may be because of one single incident, provided of course this is, in itself, sufficiently serious to entitle the employee to treat him or herself as dismissed.

Common examples of conduct that can form the basis of a constructive dismissal claim include the following:

• Your employer refuses to pay you, or takes away other contractual benefits such as a company car
• You receive a significant reduction in salary
• You are demoted without warning
• You are forced to accept unreasonable changes to how you work, for example, being made to work longer hours or in a different location
• You are forced to work in breach of health and safety laws

Please note, even where you are able to prove one of the above circumstances, this does not necessarily mean that an employment tribunal would find these changes were unfair such to justify your resignation.

In particular, your employer may be entitled to make changes to the way in which you work where your contract specifically allows for this, and your employer consulted you before making these changes.

Will I be eligible to claim constructive dismissal?

To be eligible to claim constructive dismissal, typically you must meet both of the following criteria:

• You are classed as an “employee” not a “worker”
• You have worked continuously for your employer for a period of not less than 2 years

Employee requirement

An employee is someone who works under a contract of employment, whether made verbally or in writing, under which that individual is personally required to undertake work for their employer.

Under the terms of that contract the employer must be obliged to provide that individual with work and the individual must be obliged to do that work, with the employer exercising a sufficient degree of control over the way in which the work in question is carried out.

An employee is essentially a sub-category of worker, albeit with greater statutory employment rights, including the right to claim unfair or constructive dismissal. That said, to be eligible to claim, an employee must still satisfy the minimum length of service requirement where relevant.

Length of service requirement

As a general rule, an employee must have been employed for at least 2 years before they can claim constructive dismissal, ending with the effective date of termination of employment.

However, there are a number of exceptions to this rule, in particular, no qualifying period of employment is required where the reason for the constructive dismissal is one which is classed as automatically unfair.

This can include where an employee is forced to resign as a result of the employer’s conduct for any of the following reasons:

• For a reason related to pregnancy or maternity rights
• For taking action in relation to health and safety issues
• For refusing to work over 48 hours average
• For asking to be paid the national minimum wage
• For belonging to a trade union or taking part in trade union activities
• For reporting their employer for wrongdoing, ie; whistleblowing

You can also claim for constructive dismissal in circumstances where you resigned because your employer discriminated against you by reason of your age, disability, gender, marital status, race, religion or belief, pregnancy and maternity, or your sexual orientation.

What constructive dismissal advice do I need before resigning?

Resigning from your job is a huge step and without any guarantee that a claim for constructive dismissal will succeed. In fact, these types of claim can be incredibly difficult to prove. As such, prior to handing in your resignation, you should first explore all of your options having regard to the following advice.

Lodging an internal grievance

At the very least, in most cases, it is recommended that employees lodge a formal grievance against employers in constructive dismissal claims before taking any steps to resign. This is to give the employer an opportunity to resolve the dispute, where at all possible.

Further, in the event that you do go on to make a claim for constructive dismissal, the failure to lodge a grievance before resigning can result in a reduction in damages awarded by an employment tribunal of up to 25%.

Prior to lodging a formal grievance you may also want to consider raising the issue with your employer informally. Some issues can be resolved quickly through a conversation with a line manager or other senior personnel. Thereafter, if an informal approach doesn’t work, you still have the option of lodging a formal complaint.

If you do lodge a grievance and your employer responds with an apology or otherwise attempts to make amends, this does not necessarily cure any breach. It will be for you to decide if the employment relationship remains untenable, and whether or not to treat the breach as terminating that relationship.

Securing early professional advice

Prior to lodging a grievance, not least given the potential financial consequences of any failure to do so in the context of a claim for constructive dismissal, it is always best to seek expert legal advice.

Further, by seeking early professional advice, you may avoid prejudicing your livelihood in the event that you resign from your job in the mistaken belief that you have a strong claim for constructive dismissal.

Equally, you may need to take steps to protect your legal position, preserving the right to bring a claim before the employment tribunal at a later date.

Avoiding undue delay

So as to protect any potential claim you will need to avoid any undue delay in lodging a grievance and/or handing in your resignation, not least because your employer may seek to argue either that you did not resign in response to the alleged conduct, but rather for a wholly unrelated reason, or that you accepted or acquiesced in the conduct in question.

As such, you need to be extremely careful not to be seen to have waived any breach of contract by your employer caused through any delay on your part in either lodging a grievance and/or resigning.

Setting out your reasons in writing

At the point that you resign it is not only important that you do so without undue delay, but to do so in writing, explaining to your employer that you regard yourself as having been constructively dismissed and setting out your reasons for reaching this decision.

Any failure to document the reasons for your resignation may result in an adverse inference being drawn against you at a later date. In other words, in the absence of a written explanation for your resignation, an employment tribunal is more likely to accept any argument that your employer’s conduct was not the real reason for your departure.

Again, you should always seek expert legal advice here, as any written resignation, as well as any documented internal grievance, will be used in evidence before the employment tribunal.

Working your notice

Having handed in your written resignation it is often best to leave as soon as you have resigned, not least where there are serious allegations of breach of contract by your employer, otherwise run the risk of being seen to waive the breach.

In respect of any loss of earnings here, you will be entitled to include this notice period as part of your overall claim.

That said, every case for constructive dismissal is different, where there may be some scope for continuing to work for your employer without prejudicing any claim, albeit in the short-term.

Working under protest

As an alternative to immediately resigning following an alleged breach of contract, it is possible you may be able to continue working for your employer without prejudicing any claim for constructive dismissal, so long as this is done on a short-term basis only and “under protest”.

In other words, you can continue to work, whilst making it clear to your employer that you do not agree with the situation and that you reserve your right to resign in response to this conduct. Your position must be set out in writing, otherwise again run the risk of being seen to waive the breach.

Needless to say, however, this situation cannot continue indefinitely, not even where you regularly repeat your objections in writing, as at some point you will be taken to have positively affirmed your contract of employment, thereby losing any right to claim for constructive dismissal.

What constructive dismissal advice do I need after resigning?

In the event that you have already resigned from your job in response to a fundamental breach of contract on the part of your employer, securing expert advice from a specialist in employment law should now be your first step.

You will only have 3 months minus a day from the date your employment contract ended to lodge a claim with the employment tribunal, so securing advice as early as possible is crucial to assessing and preparing any claim.

Further, before the tribunal will accept your claim, it needs to be lodged with ACAS as a preliminary step under what’s known as their “early conciliation scheme“, otherwise the claim will automatically fail. ACAS is the Advisory, Conciliation and Arbitration Service.

In the event that this results in some form of negotiations between the parties, the tribunal time limit will be paused to allow for discussions to take place in the hope the matter will be resolved without recourse to legal proceedings.

However, if your claim for constructive dismissal proceeds to a tribunal hearing, to succeed you will need to show that your employer has acted in such a way that made your position in the workplace wholly untenable and goes to the root of your employment relationship.

The onus will be on you to prove that your employer was in fundamental breach of the employment contract, unlike a claim for unfair dismissal where it is for your employer to prove that there had been a fair dismissal.

Accordingly, expert legal advice and representation can be crucial to a successful outcome.