What is Constructive Dismissal?

Constructive dismissal is where an employee treats themselves as dismissed because of the employer’s conduct.  It is necessary to show that the employee has resigned in direct response to what is termed a fundamental or ‘repudiatory breach’.

The most common form of breach relied on in a constructive dismissal claim is when the implied term of trust and confidence is breached by the employer. The implied and unwritten term of trust and confidence exists in all employment contracts. 

This employer's conduct doesn’t have to involve the owners of the business but covers all staff and colleagues. 

What constitutes a fundamental or Serious Breach of Contract?

The breach has to be fundamental to the employment contract, in other words it cannot be minor or trivial.

Whilst all cases are different, where an employee has been subjected to a sudden and aggressive verbal assault by their manager, or sworn at, physically assaulted, or called a racist name, these are straightforward examples of serious conduct.  

Disagreements and disharmony occur in almost every workplace, so a one off incident of a minor nature will not be enough to establish a constructive dismissal claim. Unfortunately an employee is expected to put up with a certain amount of working life that may not be to their liking. In our experience a lot of bullying behaviour can be subtle and take place gradually, sometimes over many years.  

It is possible to rely on a series of breaches, that cumulatively over a period of time undermine your trust and confidence.

Common breaches of contract leading to Constructive Dismissal Claim

• Changes to written terms without proper consultation
• Withholding wages and holiday pay
• Bullying and harassment
• Discrimination
• Intolerable workload pressure
• Health & Safety Breaches
• Breach of Working Time Regulations
• Not treating a whistleblowing complaint properly
• Subjecting the employee to unfair or untrue allegations

Timing of Resignation

In order to succeed in a constructive dismissal claim, an employee must resign promptly in response to the breach relied on. If the employee wishes to resign in response to a flawed or incomplete grievance outcome letter, resigning months later, would be very problematic. There is no set deadline and each case is dependent on the facts. An employee on sick leave for work related stress, will be given some leeway if there is a slight delay in resigning.

There is often a last straw in constructive dismissal cases where the employee is tipped over the edge.

We have encountered many cases where a constructive dismissal claim is weakened because even though the employer’s conduct leaves a lot to be desired, the employee has waited too long, or waited for some other factor to intervene.

Resigning on the day your sick pay runs out or until a new job has been offered, although understandable, would undermine a constructive dismissal claim.

It is not a good idea to resign after the first, minor breach but rather bide your time until there is a clear pattern emerging.

It is also a good tip to keep a diary of events and take notes of what is occurring.

Raising a grievance before resigning

Another common pitfall in a constructive claim is where an employee is said to have ‘waived’ the breach away by not complaining about the conduct and then deciding to resign several months later after things have settled down.  

It is therefore advisable, to make your displeasure known, if not formally in writing, then verbally to your manager. Whilst a complaint or grievance is being investigated, this can buy the employee some time before they submit their resignation.

It is never a good idea to resign in the middle of grievance investigation. An employment tribunal may conclude that you have resigned too soon and should have given the employer a chance to sort the problem out.

If following the end of a grievance the complaint is not upheld, or the matter is still not resolved, or  even where the employer upholds and agrees with the employee’s complaint, the employee may choose at that point, to use this as a springboard to bring a constructive dismissal claim.

Making clear the reason for leaving

Ideally, if an employee wishes to bring a claim for constructive dismissal, they should make clear their reason for leaving in writing, although a resignation email or letter need not address every single nuance and examples of the employer’s conduct. There is a delicate balance to be struck between broadly setting out the reason for leaving and over elaborating.

Depending on the wording of a resignation letter, an overly long resignation letter may actually give an advantage to the employer if the matter becomes contested at tribunal, handing the company or their solicitor the opportunity to question the employee on things that were perhaps not completely central to the main reasons for leaving.

There is no absolute requirement to set out reasons in writing, for example in Weathersfield v Sargent an employee resigned because of the company policy of turning away potential customers from ethnic minorities.

She phoned in her resignation but gave no reason.  The tribunal found that given the position she had been put in it was completely understandable she did not want to divulge and confront her employer with the reason for leaving. She succeeded in her claim for constructive dismissal even though there was no evidence at the time of the actual reason.

It is never a good idea to write anything positive in a resignation letter, such as thanking the employer for the opportunity or saying how much they will miss working there and how much they will miss their colleagues. The main requirement of a constructive dismissal claim is to demonstrate that relations have completely broken down.

Anticipatory Breach of Contract

An employee may choose to resign because they expect their contract to be breached in the near future, for example if the employer has given notice that their terms and conditions will be altered to their detriment, or if the employee is given an unfair ultimatum they need to give an answer to, such as deciding whether to take a lesser demoted role or face being made redundant.

Qualifying service needed to bring a constructive dismissal claim

Employees need two years continuous service to bring a claim for constructive dismissal. 

There are however some exceptions. Similar to claims for Automatic Unfair Dismissal where an employee is dismissed for raising a certain type of complaint; eg they assert one of their statutory rights has been infringed or if they have raised a whistleblowing complaint, an employee can claim Automatic Constructive Dismissal, without two years service, if as a result of raising a complaint, their employer mistreats them. 

Example: An employee has been employed for 6 months in local government. They complain their employer is in breach of a legal obligation it owes the public. They are bullied by their manager as a result of making the allegation and then suspended for an unjustifiable reason. They resign as a result of this conduct and claim they have been automatically constructively dismissed.           

Notice

There is no requirement to resign immediately, without notice in order to claim constructive dismissal. However if a long notice period is given by the employee, and they are able to work as normal in the notice period, it may be argued they have affirmed any breach of contract, and their working life couldn’t have been that bad.  

Negotiation of compensation instead of resignation

If your are considering resigning or raising a grievance it is important to seek legal advice. It is often possible to negotiate an exit from your employment and avoid the stress of dealing with your employer on your own.

We have written thousands of Without Prejudice Letters on behalf of clients who are considering resigning and claiming constructive dismissal. 

Approached in the right way, it is often possible to negotiate a favourable compensation package, rather than raise a formal grievance or face the uncertainty of an employment tribunal claim.

What is your constructive dismissal claim worth?

Compensation for constructive dismissal is worked out in exactly the same way as compensation in an unfair dismissal claim.

This is broken down into:

The Basic Award:

One weeks pay for every year of service up to the age of 22.

One weeks gross pay for every year of service over the age of 22 up to a maximum of 20 weeks.

One and a half weeks pay for every year of service over the age of 41.

A weeks gross pay is capped at £525.

The Compensatory award

Loss of salary, pension and all employee benefits until you find a new job. If the new job is on a lower salary you can claim the difference.

Loss of earnings is capped at 12 months.

The current cap on the compensatory award is £86,444 or 12 months gross pay whatever is the lower. 

If your dismissal involves an element of discrimination or is linked to whistleblowing, it is possible to recover income losses in excess of 12 months

Time Limits for bring a Constructive Dismissal Claim

You are required to complete an ACAS form within 3 months minus one day from when your employment terminates. This is a very strict rule. Only in exceptional circmstances will you be allowed to bring a claim if this deadline is missed. The time limit for submision of an employment tribunal claim is then stopped until such time as ACAS issue a certificate. Rules concerning the deadlines for submission of all types of employment claim can be complex and you should seek legal advice if you are unsure. 

Contact our Constructive Dismissal Lawyers 

Speak to a member of our team today by calling 0207 458 4633 or complete our online enquiry form.