The qualification for a constructive dismissal claim

Daniel Isaac, a partner in the employment team at Withers, answers the key questions on which a claim for unfair constructive dismissal by an employee can stand or fall.

What is the definition of constructive dismissal?

Constructive dismissal occurs where an employee terminates their employment in response to their employer’s treatment of them. Although there has been no actual dismissal, the treatment is sufficiently bad that the employee is entitled to regard themselves as having been dismissed.

What does the employee have to prove?

The employee has to show that they have resigned in response to a fundamental breach of contract by the employer. The Employment Rights Act 1996 essentially says that if the employee terminates their contract in circumstances in which they are entitled to do so without notice because of the employer’s conduct, that termination constitutes a dismissal.

Sometimes that conduct will be the breach of an express term of the contract of employment, such as the right to be paid a certain amount on a certain date. More commonly, it will be that the employer’s behaviour has breached the term of mutual trust and confidence that is implied into all contracts of employment. The term basically requires employers to refrain from conducting themselves in a manner that is likely to destroy or seriously damage the relationship of trust and confidence between employer and employee. Examples of such conduct may include isolating the employee, humiliating them in front of others and falsely accusing the employee of misconduct.

How easy is it to show constructive dismissal?

Constructive dismissal is far more difficult to prove than employees often think. First they must prove a fundamental (rather than minor) breach of contract by the employer.
The employee must also show that their decision to terminate their employment was in response to the breach and not, for example, because they had been offered a more attractive job. An employment tribunal will also need to satisfy itself that the employee did not delay too long in resigning. A tribunal will usually expect an employee to have tried to resolve the complaint through the grievance procedure before jumping ship.

Is constructive dismissal a claim which can be brought in the tribunal or court system?

Constructive dismissal is not a claim in itself, but if a claimant who has resigned demonstrates that they have, in effect, been dismissed they can go on to claim unfair dismissal and/or wrongful dismissal.

Why would an employee who already has another job assert constructive dismissal?

Constructive dismissal occurs following a fundamental breach of contract by the employer, which cannot then rely on that contract in the future.

Therefore, if an employee can show that they have been constructively dismissed, they may not be bound by post-termination restrictions in the contract, such as restrictive covenants preventing the employee from contacting the employer’s clients.

If an employee wants to avoid contractual restrictions – perhaps because they are joining a competitor – they might assert constructive dismissal.

How can I tell if an employee is preparing to assert constructive dismissal?

Submitting or pursuing a grievance, depending on its content and tone, may indicate that an employee is considering asserting constructive dismissal. Other indications include: re-opening old complaints in an effort to ‘refresh’ old breaches of contract; uncharacteristically taking notes at meetings or confirming conversations by e-mail; or spelling out the reasons for resigning in a letter.

How can we head off constructive dismissal claims?

Often the heart of any constructive dismissal claim is a breach of the duty of trust and confidence. Expressions of trust and confidence in the employee by the employer may assist (although a tribunal or court will recognise the difference between a cosmetic communication and one genuinely designed to reassure).

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More importantly, constructive dismissal claims focus on a grievance and getting to the heart of the grievance is the key either to reassuring the employee or, if they are determined to leave, weakening any potential claim of constructive dismissal by dealing appropriately with the alleged breach.

This article was originally published on 26 July 2005. It was updated on 14 October 2013 by Jeya Thiruchelvam, employment law editor.