A practical guide to constructive dismissal

This type of claim costs employers time, money and effort to mediate regardless of who’s at fault. Often a better and more efficient result could have been secured if better HR processes were in place.

Catherine Kerr | Partner and Head of Employment

Constructive dismissal is where an employee resigns and can prove that they were forced to do so because of their employer’s conduct. Whilst constructive dismissal is very difficult for employees to prove in court beyond doubt, accusations of constructive dismissal should still be taken seriously.

This type of claim costs employers time, money and effort to mediate regardless of who’s at fault, and with employees rarely achieving their desired outcome, often a better and more efficient result could have been secured if better HR processes were in place. Understanding what may drive an employee to make a constructive dismissal claim as well as taking a closer look at current HR processes can help to avoid future claims arising.

What is constructive dismissal?

Constructive Dismissal is where an employer commits a serious breach of contract, which entitles the employee to resign in response. The employee is entitled to treat him or herself as having been “dismissed”, and the employer’s conduct is often referred to as a “repudiatory breach”.

Typically, this arises around changes to working conditions, hours or pay that have been outlined in an employee’s contract, and have been changed without first discussing the changes with the employee.

Individuals can only claim constructive dismissal if they’re classed as an employee and have worked with their employer for at least 2 years.

Constructive dismissal can sometimes be confused with unfair dismissal, as both involve a fundamental breach of the employment contract by the employer. However, these are different types of claims. Unfair dismissal is when the employer dismisses the employee, whereas constructive dismissal is when the employee resigns, and therefore treats themselves as ‘dismissed’, in response to the employer’s contract.

What are some examples of constructive dismissal?

Employees may be able to make a claim for constructive dismissal if they were forced to resign due to their employer making a serious breach to their contract. The breach of contract by the employer needs to be a fundamental breach of an express or implied term in order to justify a claim for constructive dismissal.

Common breaches of contract can include:

  • The employer made unreasonable changes to how the employee worked, for example forcing them to work longer hours that are not outlined in their contract. These changes were not agreed with the employee beforehand and were not made instead of something worse e.g. avoiding redundancies
  • The employer allowed people to bully or harass the employee whilst the employee was at work
  • The employer demoted the employee, took away benefits that are stated in the employee’s contract or reduced the employee’s pay without agreement
  • The employer failed to ensure that the employee’s working environment was safe, resulting in the employee feeling scared or unable to come to work and therefore forced to resign
  • The employer failed to give the employee the level of support that was required for the employee to effectively do their job
  • The employer failed to serve the employee with the correct period of notice to terminate their contract

What can employers do to prevent constructive dismissal claims?

According to Citizens Advice, there is a common misconception that resigning and making a constructive dismissal claim is a good method for employees to deal with problems at work, despite the fact that these types of claims are very difficult for the employee to prove.

Not only does this mean that employees are unlikely to get the result they want, but employers are also spending time, money and effort on claims that could potentially be unnecessary and avoidable, had proper processes been in place.

The key to preventing claims is to avoid the repudiatory breach of contract. Ensure that legal teams are consulted before any changes to contracts are issued, and always consult employees about changes that affect their express terms, such as pay, job location, working hours and duties.

Small changes by the employer may not be considered small to the employee, so fostering clear communication between management and employees and ensuring that HR processes are accessible and clear will help with mitigating any problems.

Often constructive dismissal claims arise out of employees feeling frustrated and unsure of how to raise their concerns, so implementing simple HR processes, such as issuing all employees with an up-to-date employee handbook that outlines staff policies and grievance procedures, as well as regular reminders, will help employees understand how to raise their concerns.

There may be instances where changes to the employee’s contract are necessary for the business, such as an agreed reduction to an employee’s pay to avoid redundancies. However, any changes that will breach an employee’s contract should be communicated with the employee first before actioned.

What timeframes are in place for constructive dismissal claims?

Employees have 3 months minus a day from the date their job ended to start tribunal action for a constructive dismissal claim.

When do I need legal support for a constructive dismissal claim?

Employment law specialists can guide you through constructive dismissal claims as they arise, as well as help to implement tighter HR processes and training to avoid claims arising in future. To speak to an employment law specialist at Primas Law, contact catherine.kerr@primaslaw.co.uk.

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