Employment Law Services
What is Constructive Dismissal?
When can an employee claim to have been constructively dismissed?
A constructive dismissal occurs where an employer doesn’t actually dismiss the employee but instead the employee resigns and claims that they did so in response to their employer’s conduct towards them which was so unreasonable as to amount to a fundamental breach of their contract of employment which entitled them to resign. In order to succeed in their argument that their resignation should be viewed as a dismissal by the employer, the employee must show that the employer had behaved in such a way as to demonstrate that it did not intend to be bound by the contract of employment.
That can be the case where the employer breaches an express term of the contract of employment (for example unilaterally reducing the employee’s pay) or breach of an implied term of the contract. The most common implied term relied upon in this context is one which says that the employer will not conduct itself in such a way as is designed or likely to destroy or seriously damage the relationship of trust and confidence which should exist between an employer and an employee.
If the employee wants to accept that breach of contract by the employer they resign from the employer’s employment. They must not delay too long in accepting the breach because they could be argued to have accepted the behaviour and therefore waived any breach of contract which may have occurred.
Equally as the argument is that the employer has destroyed the contract between the parties the employee is therefore released from their obligations under the contract as well, including the obligation to provide a certain period of notice of termination. It may be contradictory to the employee’s position were they to uphold their part of the contract by giving notice of the termination of their employment rather than terminating with immediate effect.
What are some examples that might amount to a breach entitling an employee to resign and claim constructive dismissal?
An employer will usually be in fundamental breach of an employee’s contract of employment if they impose a pay cut on the employee without prior agreement.
Discriminating against an employee on the grounds of a characteristic protected under the Equality Act 2010 is also likely to constitute a fundamental breach which would entitle an employee to resign and bring a constructive dismissal claim.
Changing contractual duties and inept handling of a disciplinary or grievance matter may also be a breach, depending upon the circumstances, as would the creation or acceptance of an intolerable working environment where an employee is subject to abusive behaviour and bad language on a regular basis.
Employers must also be aware that a constructive dismissal claim may be based on the behaviour of a fellow employee and an Employment Tribunal could find the employer vicariously liable in such circumstances.
What should an employer do when an employee resigns to protect against a constructive dismissal claim?
If the employee has already resigned then there may be little that can be done to protect against such a claim if there has in fact been a fundamental breach of contract. However an employer should take such issues seriously. Investigating and taking remedial action to prevent such occurrences in the future may well be viewed favourably by an Employment tribunal in any subsequent proceedings as evidence that the employer did consider itself to still be bound by the contract of employment.
It may be that the employer engages with the employee either directly or via the Acas Early Conciliation process in order to investigate whether it may be possible to resolve matters amicably and avoid a complaint to a Tribunal.
The Dean Wilson Employment Law team are well placed to advise either employer or employee on issues arising from a potential constructive dismissal situation, and how best to proceed.
Your Employment Law Experts
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Clare Waller
Partner, Employment Law
Experience
Clare works with employers of all sizes and across all industries as well as senior executives and other individuals, advising on both contentious and non contentious aspects of employment law. This ranges from the provision of ongoing advice on disciplinary and grievance procedures, performance management processes and statutory rights to drafting contracts of employment, service agreements and staff handbooks to representing clients before the Employment Tribunal or civil courts in cases of unfair dismissal, breach of contract, claims to enforce post termination restrictive covenants and breaches of confidentiality. Clare has experience of representing clients in complex discrimination claims at first instance and in the appeal courts.
Clare designs and delivers client training on any aspect of employment law as well as undertaking regular public speaking engagements.
Recent Notable Cases
Clare recently acted for an employer and two individual Respondents in a multi million pound discrimination claim. She also successfully defended a client against a claim of race discrimination arising of out allegedly discriminatory Photoshopped images being circulated within the workplace.
She is currently advising on the design and implementation of redundancy consultation processes, including where collective consultation obligations have been engaged.
Clare also works closely with the Dean Wilson Company and Commercial team providing employment law support to its successful mergers and acquisitions function.
Background
Clare read Law at the University of Reading and achieved distinction in the Legal Practice Course at the College of Law, Guildford. She trained at HRJ Law in Hitchin and qualified in 1999. She obtained a Masters degree in Employment Law from the University of East Anglia in 2006. She became a Partner at HRJ in 2002, joined Hewitsons in Cambridge and Northampton in 2010 and then joined Dean Wilson to head up its employment law team in October 2019.
Areas of Specialism
Unfair dismissal, discrimination, breach of contract, post termination restrictions, contracts of employment, company handbooks, disciplinary and grievance procedures.
Hermione Porter
Solicitor, Employment Team
Areas of Specialism
After undertaking a varied training contract with the firm, Hermione qualified into the Employment department in September 2023. Before qualification Hermione spent her final seat in the Employment team where she gained experience advising both employers and employees on a variety of matters.
Hermione provides continuing support to employers on a range of areas of employment law. She has previously worked with clients advising on matters such as maternity leave arrangements, Working Time Regulations and redundancy procedures. Hermione is also involved with litigious matters recently assisting an employer defending a race discrimination claim brought in the Employment Tribunal.
Hermione has experience with undertaking a range of drafting tasks. She can assist with preparing, reviewing and updating contracts of employment, staff handbooks, consultancy agreements and disciplinary procedures.
Hermione also provides advice to individuals and has previously advised employees on matters such as unfair dismissal and disability discrimination. Hermione also has experience with advising on settlement agreements.
Background
Hermione started with Dean Wilson as a paralegal in 2021. She read Law at the University of Sussex and completed her LPC at the University of Law, Guildford. During her time studying she also participated in schemes providing pro-bono legal advice.
As well as employment matters, Hermione also has a keen interest in GDPR related queries and provides advice on employers obligations under the Data Protection Act 2018 and UK GDPR.