Constructive dismissal
Know your rights around this form of breach of contract
What is constructive dismissal?
Constructive dismissal is the term used where an employee resigns in response to their employer breaching an important term of the employee’s employment contract.
This can be a breach of an express term of the contract (such as changing your job title or fundamentally changing your duties without the contract specifically allowing that) or an implied term.
Implied terms
Implied terms are incorporated into every employment contract by law, regardless of whether they have been expressly agreed between you and your employer. Breach of the implied term of mutual trust and confidence is the implied term most often relied on by employees in constructive dismissal claims, where the relationship between an employee and their employer has irrevocably broken down.
Normally, if you carry on working for any length of time without leaving you will be regarded as having chosen to “affirm” the contract (also known as “waiving” the breach) and therefore lose your right to treat the contract as breached.
It may not be just one incident that amounts to repudiatory conduct; sometimes it is several incidents which add up to such conduct. In this situation, an employment tribunal may consider that any previous breaches of contract that may have otherwise been waived by you should be treated as resurrected and forming part of a continuing course of conduct against you.
Key features:
- For a constuctive dismissal claim to succeed you need you show that your employer was in repudiatory breach of the employment contract
- You need to demonstrate that you resigned in response to that breach and not for any other reason
- ...and that you did not delay too long before resigning in response to your employer's breach
Should you resign?
There are several important matters to be weighed against the requirement to resign promptly, in particular, whether the breaches amount to repudiatory breaches, whether there is an opportunity to reach a settlement with your employer, whether you need to first raise an internal grievance to give your employer the opportunity to resolve the issue, whether to work your notice and, of course, all the other non-legal considerations you will inevitably be thinking about when making the big decision on whether to leave your job.
In almost all cases where you are seeking to reach a settlement with your employer, it is better to do so before you have resigned. As time is very much of the essence in constructive dismissal claims, you should not wait before obtaining legal advice.
Other key questions regarding constructive dismissal
Do you have to work your notice period?
In a constructive dismissal situation you are entitled to resign without giving notice. In fact, there are circumstances where working your notice could potentially adversely affect your claim. Therefore, if you do intend to work your notice period, please let us know and we can discuss this further.
Do you need to raise a grievance?
The law does not require you to raise a grievance but in most cases you should do so before bringing a claim for constructive dismissal. A failure to raise a grievance could mean that any employment tribunal compensation that you might subsequently be entitled to could be affected. If an employment tribunal finds that, by not raising a grievance, you have "unreasonably" failed to follow the ACAS Code of Practice on Disciplinary and Grievance procedures, your compensation could be reduced by up to 25%.
Do you qualify to bring a constructive dismissal claim?
You need to have been employed for at least 2 years. There are some limited circumstances where you do not need to have been employed for 2 years, typically where the employer’s repudiatory breach of your contract included discriminatory treatment or was linked to you having raised whistleblowing concerns.