Constructive Dismissal

What is Constructive Dismissal?

Constructive dismissal, constructive unfair dismissal or unfair constructive dismissal are phrases that  many people have heard of however there is often confusion about what it means and what the differences is between this and unfair dismissal.

Many people have heard about unfair dismissal and understand that this happens when the Employer dismisses you i.e. the Employer has taken positive action to remove you from your job.

Constructive dismissal occurs where you resign as a result of the Employer’s behaviour.

Effectively instead of the Employer saying you are sacked, they behave in such a way that you have no choice but to leave, thus forcing you out rather than actually dismissing you.

Who can claim Constructive Dismissal?

Like unfair dismissal claims you have to have been employed for a minimum period of time before you have the right to pursue this claim.

If you were employed before April 2012 you need to have been employed for one full year. If you started work after April 2012 then you will need to have been employed for two full years.

How do I know if my claim will be successful?

In order to succeed with a claim for constructive dismissal you must show that the Employer’s conduct was a repudiatory breach of contract. This means that the Employer is guilty of conduct which is significant and which goes to the heart of the contract of employment, or which shows that the Employer no longer intends to be bound by one or more of the essential terms of the contract between you.

To be successful in proving constructive dismissal you must show three things:

1)      A fundamental breach

2)      That the cause of your resignation was the Employer’s breach.

3)      That you have not delayed in resigning

What is a ‘Fundamental Breach’?

The Employer must have breached an express or implied term of your employment contract.

The breach may be a one-off or a continuing series of acts which lead to the ‘last straw’, essentially where you decide that you have had enough.

Deciding whether the Employer’s behaviour is a ‘fundamental breach’ is the hardest part of a claim for constructive unfair dismissal. Each case is different and each case will be decided by the Employment Tribunal on the facts, so how can you tell if what your Employer is doing is a fundamental breach?

It is vital that you go through this in your mind and ask yourself the question from an objective point of view. This is where getting a second opinion can be vital as you do not want to resign and then find out afterwards that your prospects of success are low.

1. Firstly, you should identify what the breach of contract is;

• Is it a breach of an express term, such as the requirement to pay you a bonus;
• Is it a breach of an implied term, such as the implied term of trust and confidence?

 2.What evidence do you have in support of your claim?

• Do you have evidence of what has happened;
• Are there any witnesses that will support what you are saying?

3.Can you satisfy the Employment Tribunal with the evidence that you have that there has been a breach of contract?

Actual or anticipated breach?

The breach by the Employer can be an actual breach, i.e. one that has happened, or an anticipated breach, i.e. the Employer has threatened to do something

The good news is that you do not have to wait to see if the Employer follows through with their threat to breach your contract and you are able to rely on an anticipated breach. It is sufficient for the Employer to demonstrate to you that they intend not to be bound by your contract in the future.

For example, the Employer may state that they intend to demote you to a lower paid position. This would be a fundamental breach and you could resign in anticipation of their threat.

It is however advisable to act with caution when considering an anticipated breach and ensure that you do not act too hastily.

You should also note that an anticipatory breach can be remedied if the Employer changes the decision. For example, your Employer says that they are going to demote you and pay you less money. You notify them in writing that you object to the decision and set out your reasons, as a result the Employer tells you that they are not going to make any changes. You cannot rely on this as an anticipatory breach of contract as the breach did not take place and the Employer has notified you that they are no longer going to proceed with the breach.

Resignation in response to the ‘Last Straw ‘

What happens if there is not a single fundamental breach but a series of behaviour that slowly grinds you down until it gets to the point that you cannot take any more.

You may have heard about the ‘last straw’ in constructive unfair dismissal and may find yourself in this position. What it means is that something happens at work which is the last in a series of behaviours or actions which results in you finally having had enough, hence the ‘last straw’. In this case you are relying on a series of minor acts which have breached the trust and confidence between you and the Employer and culminated in your resignation.

The key question in this case is, was the incident/behaviour which prompted you to resign the last in a series of acts or incidents that when put together amounted to a repudiation of contract by your employer.

The final act or behaviour which led you to resign need not be serious on its own but it cannot be trivial. It also need not be the same type of behaviour or similar to the previous behaviour.

Is the breach of an implied or actual term of your employment contract?

The terms of your employment contract are made up of the written terms that you receive from your Employer; these are the express terms, and the terms that are implied into each contract in order to make it work.

There are a number of terms that will be implied into your employment including the implied term of trust and confidence which is an essential element in all contracts between employers and employees. What this means is that the Employer will behave in a reasonable and fair manner and vice versa in the course of your employment relationship.

Because of the nature of the implied term of trust and confidence any breach of this implied term will be a fundamental breach as it is term of the contract which goes to the heart of the contract.

You can claim constructive unfair dismissal on the basis of the Employer’s breach of an implied term in the same way that you can for an express term.

You must resign and the reason for your resignation must be the Employer’s conduct

Your employment contract will not be terminated until you resign from your employment, and therefore this is necessary to pursue a claim for constructive unfair dismissal. You must notify the Employer that you are resigning and it is advisable to state that you are resigning in response to their breach of contract.

In order to succeed with your claim for constructive unfair dismissal you must be able to show that you have resigned, at least in part, in response to the breach by the Employer.

You must not delay in resigning

You must be careful not to delay in taking the decision to resign as a result of the Employer’s contract, as it could be considered that you have in fact accepted the Employer’s breach by continuing to work.

A short delay whilst you decide what to do or try to resolve the issue will not affect your claim, and there are a number of cases where there has been a delay and the claim has succeeded.

Our advice however is to think carefully about what has happened and what you want to do and if possible get a second opinion as soon as possible.

Do I have to give notice?

It does not matter for the purposes of a claim for Constructive Unfair Dismissal whether you give notice or not. The reality is that many people do give and work out their notice.

If you work your notice you cannot submit your claim to the Employment Tribunal until after your notice has expired.

Examples of Behaviour that can amount to Constructive Dismissal

1. Behaviour of Colleagues

• The behaviour your complaining about need not just be from your manager;
• Your Employer will be liable for the acts of all employees in the course of their employment.

 2. Behaviour directed at a third party or fellow employee

• If you witness behaviour that damages or destroys your relationship of trust and confidence with your Employer then you can claim Constructive Dismissal;
• If your Employer instructs you to behave in a discriminatory way to a third party, i.e. to customers then you can claim Constructive Dismissal, even though the discrimination is not aimed at you.

 3.       Failure to provide a suitable working environment

 4.       Bullying

• By your Employer or colleagues

 5.       Changes to terms of employment

What will the Employment Tribunal look at when making their decision?

Once you have established that the Employer is in breach of contract the Employment Tribunal will look at whether the behaviour is fair or not, this is the reasonableness test.

The Employment Tribunal will look at the Employer’s conduct and decide if they acted fairly. In reality if you have been able to show that the Employer has fundamentally breached your contract it is unlikely that the Employment Tribunal will then rule that it is fair, but there have been some prior cases.

In particular where Constructive Dismissal has arisen because of a change to terms and conditions of your employment and the Employer can give legitimate business reasons for the changes, i.e. a downturn in business results in a need to reduce hours, the Employment Tribunal may find that it was fair.

In summary the Employment Tribunal will look at and decide:

1)      What is the reason for dismissal?

2)      Has the Employer acted reasonably?

If you have found yourself in the position of claiming constructive dismissal and have any experience or advice then please leave a comment below.