Constructive Dismissal: A Pay Day for Predatory Lawyers?

Constructive dismissal is a big worry for employees. Why? Because you don’t even need to dismiss anyone to be accused of it…

Your disgruntled employee simply has to resign and claim that their working conditions forced them to leave. And there are hundreds of no win no fee lawyers ready to take up their case.  

Successful cases of constructive dismissal can lead to businesses paying out hundreds of thousands of pounds in compensation. But don’t panic just yet. Although some cases are successful, constructive dismissal claims are very difficult for employees to prove.

Here’s how to tell if you’re at risk of constructive dismissal, and what you to do if you get taken to tribunal.

Constructive dismissal FAQ 

What is constructive dismissal?

Constructive dismissal is when the actions of an employer force an employee to leave a job against their will.

When can an employee claim constructive dismissal?

Your employee can claim it at any point after they resign, but they’ll only be successful in serious cases of unfair treatment. These include:

• If you demote them for no reason.
• If your employee suffers bullying or discrimination and you do nothing about it.
• If you change the terms of your employee’s contract without their consent.
• If you ignore a grievance that your employee has raised.
• If you give your employee excessive workloads that they can’t complete in the required time.
• If you don’t pay them their contracted wage.

Legally, a successful claim of constructive dismissal counts as unfair dismissal. This is an important distinction. It means successful claims can lead to payouts of over £100,000. That’s why constructive dismissal is so enticing to a certain type of lawyer…

How do I avoid constructive dismissal?

The best protection against constructive dismissal is to be a good boss to all employees.

Listen honestly and fairly to your employees’ issues. Encourage them to discuss their concerns. Handle their grievances and disputes promptly and sensitively. And make sure you follow your workplace policies when handling difficult situations.

Remember, being a good boss isn’t just the right thing to do, it can save you from a costly tribunal. Because if you show that you’ve made a genuine effort to resolve your employees’ concerns before they resign, you’ll have a much stronger defence in court.

What if I need to change an employee’s contract?

Disputes over contracts are one of the main reasons why employees accuse their bosses of constructive dismissal.

It’s illegal to change the terms of an employee’s contract without their consent. If you do, your employee may have grounds to take action against you.

So how do you change a contract without risking constructive dismissal? Here are some of the main points to follow:

• Check that the changes are reasonable. For example, if your business moves from one building to another one across the road, it’s reasonable to ask to change your employee’s place of work. But if you move from one building to another 100 miles away it may be unreasonable to ask your worker to move with you.
• Talk to your employee or their representative and explain why you want to change their contract. Discuss your reasons and listen to their feedback. You may need to compromise or offer your employee incentives to accept the change.
• When you are both happy, send the changes to your employee in writing and have them respond in writing. You should give them their revised contract within a month of the changes coming into force.

Changing contracts is a complicated area of employment law and this only scratches the surface of a much longer process. Before you think about changing staff contracts, get legal advice from a Croner legal expert. Call 01455 858 132.

What do I do if an employee claims constructive dismissal?

If you follow the advice above, then you’ll have a strong defence against the claim. But you still need independent legal advice. 

Croner provides tribunal representation services as part of a complete package of HR support. And because you can’t tell when an employee might accuse you of constructive dismissal, we offer legal expense insurance, too. This can cover your legal fees and the cost of compensating your employee.  

Speak to an expert

Speak to one of our friendly advisors today and find out how to protect your business from claims of constructive dismissal. Call 01455 858 132 or request a call back from an employment law expert here.