What is Constructive Dismissal?

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01 Aug 2018

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Constructive dismissal is when you change some aspect of an employee's job or their working conditions, with the aim of forcing their resignation. The role of the employer can also be a failure to act, rather than expressly changing anything.

What Constitutes Constructive Dismissal?

Unlike an unfair dismissal case, which might focus on the employee’s conduct, the focus of a constructive dismissal claim is the employer’s conduct. Evidence of any of the following could give your employee grounds for a constructive dismissal claim:

  • Forcing your employee to work at a different location without prior agreement, such as in their contract.
  • Victimising your employee.
  • Demotion without warning your employee in advance.
  • Reducing or threatening to reduce your employee's salary.
  • Letting other staff bully or harass your employee.
  • Forcing your employee to accept a significant change in the nature of their role. For example, forcing someone on day shifts to work nights.
  • Making your employee work in breach of health & safety laws.

If your employee is going to resign and claim for constructive dismissal, they can't wait too long before resigning. An employment tribunal could view any significant delay before your employee chooses to resign as an acceptance of their situation.

What To Do If You Receive A Constructive Dismissal Resignation Letter

A constructive dismissal resignation letter might include one of the following to outline their reason for resigning:

  • Fundamental breach of contract. This could be a direct contradiction of your employee's role and entitlements as set out in their contract.
  • An anticipated breach of contract. This is an action that shows your intention to fail to fulfil your contractual obligations.
  • A breach of trust. This could be you causing damage to the reputation or career prospects of your employee.
  • A "last straw" doctrine. This would likely be a series of actions or breaches of contract. They would result in the employee resigning. The "last" act need only relate to the past treatment of your employee.

Constructive Dismissal Qualifying Period

In most circumstances, an employee must have two years' service with you to bring forward a claim for constructive dismissal. If an employee doesn't fall within the qualifying period, they can't make a claim. There are some exceptions to this rule; for example, if the case involves discrimination.

How Can I Prevent A Claim?

While difficult for employees to win, claims can consume a large portion of your business's time and money. The best way to prevent a claim is to be vigilant and keep on top of employment contracts, HR policies, and terms & conditions. Keeping policies and procedures up-to-date and compliant is a good start. Furthermore, bear in mind that smaller issues (while they might not be too harmful on their own) can build up. These issues could create an environment where the employee feels like they have no choice but to resign. A good example of this is bullying. An offhand comment, colleagues ostracising your employee, cruel jokes, and employer disregard of bullying can all add up to something devastating. Investigate complaints and grievances when they come to your attention. Have fair processes in place and follow them. Include policies on equal opportunities and discrimination. A constructive dismissal payout can be costly. The upper limit for constructive dismissal compensation is currently £83,682—not including other expenses, such as legal representation.

Talk To An Expert

For support with a constructive dismissal, or for other information about dismissals, such as the difference between constructive and unfair dismissal, or any other HR/Employment issue, contact Croner on 0808 145 3003.

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