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Constructive Dismissal

Constructive dismissal is a very wide term. Basically this covers the situation where an employee leaves his/her job because of a fundamental breach of contract by the employer, rather than as a truly voluntary resignation.

Section 95(1)(c) of the Employment Rights Act 1996 defines this situation as occurring when the employee resigns with or without notice in circumstances such that he/she is entitled to resign without notice by reasons of the employer’s conduct.

In order to succeed with a claim of constructive dismissal the employee must show:-

  1. That there was a fundamental breach of contract by the employer. N.b this may be of an “express” term of the contract such as on pay or hours of work, or of an “implied” term such as the implied term of trust and confidence,
  2. That the employer’s breach of contract directly caused the employee to resign, and
  3. That the employee did not delay too long before resigning because of the employer’s breach of contract.

Cases that often cause problems for the tribunals are those that involve a series of relatively minor breaches of contract which, taken together, lead to an employee resigning and claiming constructive dismissal. The courts have ruled that this can give grounds to claim constructive dismissal so long as the “final straw” event contributed to the breach of contract and actually lead to the resignation itself. This will often arise out of a series of incidents of unwarranted or excessive criticism of an employee, undermining an employee’s role or position at work, setting of unrealistic targets, etc.

More obvious grounds to claim constructive dismissal arise if an employer demotes, underpays, withholds pay, or imposes new terms of employment without agreement.

The issue of the period between the breach of contract and the date of the resignation is crucial, as the employee should respond promptly in order to claim constructive dismissal. In the “last straw” cases the tribunal will look at the whole series of incidents and events, but the employee would need to demonstrate that there was a final (“last straw”) incident sufficient to trigger the entitlement to claim constructive dismissal.


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