In what circumstances can you resign and claim constructive dismissal?

Constructive dismissal is the legal term for a situation where an employee resigns in circumstances where they have been forced to resign.  It is not a dismissal by the employer.  The reason for resigning must be due to a breach of contract by the employer (Western Excavating (ECC) Ltd v Sharp).

The following elements are needed to establish constructive dismissal:

• the employer must have committed a repudiatory breach of an express or implied term of your employment contract
• the employee must elect to accept the breach and treat the employment contract as at an end
• the employee must resign in response to the breach
• the employee’s resignation must be unequivocal
• the employee must not delay too long in accepting the breach, as it could be argued that you have waived the breach and affirmed the contract.

A repudiatory breach cannot be cured by the employer attempting to undo what has been done. Unless the employee has waived the breach or affirmed the contract, the employee has an unfettered right to choose whether to treat the breach as terminal.

An employee may resign with or without notice but what matters is that the employee should be entitled to terminate the employment contract without notice. In practice, most employees who are claiming constructive dismissal do not work their notice period, but where they do, the constructive dismissal occurs on the date when the notice expires.

If an employee wants to pursue a claim for constructive unfair dismissal they must normally have been employed for 2 years, although there are some exceptions (eg whistleblowing). To pursue a claim for constructive wrongful dismissal an employee does not need to have been employed for 2 years but any claim will in most cases be limited to the notice period.

What would be a repudiatory breach of your employment contract?

An employer must have acted in such a manner to have destroyed the basis of the employment relationship. It is not sufficient that the employer has acted unreasonably.

The breach of an employee’s employment contract may be actual or anticipatory (ie an employer demonstrates an intention not to be bound by the employment contract in the future). The breach may consist of a one-off act or a continuing course of conduct extending over a period, culminating in a last straw but must be sufficiently serious to justify the employee resigning.

Identifying what constitutes a repudiatory breach of an employee’s employment contract is often far from straightforward. In practice, the employee must:

• identify the alleged breach of contract
• establish the evidential basis of the claim, which are usually in dispute
• satisfy a court or a tribunal that the facts as proven are sufficient in law to amount to a repudiatory breach of contract, which is a question of fact and degree and it can be a difficult issue to assess.

Each case will turn on its own facts.

A breach of an express term will be relatively clear as to whether a repudiatory breach has occurred. For example, if an employee weas not paid their wages, which is a fundamental to the employment relationship and an express term of an employment contract would be a repudiatory breach.

A breach of an implied term will be a matter of evaluating the evidence in all the circumstances and may turn on matters of impression or the context in which the events take place. However, unless a breach of contract is significant and either goes to the root of the contract or shows that the employer no longer intended to be bound by one or more of the essential terms of the employment contract, it will normally fall short of being a repudiatory breach.

What would be a breach of an implied term of the employment contract?

Many constructive dismissal claims arise due to a breach of an implied term of the employment contract, which would be the duty:

• of mutual trust and confidence
• not to treat you in an arbitrary, capricious or inequitable manner
• not to treat you in a discriminatory manner
• to take reasonable care for your health and safety.

Examples:

• failure to provide an employee with a reasonable opportunity to obtain redress in respect of a grievance
• an inept handling of disciplinary matters where an employee is suspended or presented with allegations about their conduct and any suspension or allegation is manifestly unreasonable, particularly in cases where the allegation is of the utmost seriousness
• an inept raising of work issues while an employee is on sick leave that are not serious or urgent
• subjecting an employee to an excessive workload causing damage to their health
• creating an intolerable working environment causing damage to an employee’s health.

Is a constructive dismissal always unfair?

There is no rule of law that a constructive dismissal will be an unfair dismissal. 

An employment tribunal must look at the employer’s conduct and decide whether it acted fairly. However in most cases, it will be difficult for an employer to bring itself within the range of reasonable responses in circumstances where it has fundamentally breached an employee’s employment contract.

The material contained in this web page is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for specific circumstances and before action is taken.