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Employment law

What is constructive dismissal?

Constructive dismissal happens when you’re forced to resign because your employer has fundamentally breached your contract of employment.

05 June 2015

What is constructive dismissal?

Constructive dismissal happens when you’re forced to resign because your employer has fundamentally breached your contract of employment.

When does a breach of employment take place?

A fundamental breach happens when your employer makes a significant change to an express or implied term of your contract without a good reason. An implied term of trust and confidence is incorporated into every contract and many constructive dismissal claims rely on this.

What are some examples of a breach of employment?

Express breaches could include a pay cut or an end to other benefits like a company car or a significant change to your contractual duties and responsibilities. To evidence an implied breach, you would have to show that your employer has, without good reason, acted in a way which was likely to destroy the relationship of trust and confidence.

This could also include an unsafe working environment, obscene language, excessive punishment or a suspension without reason.

What should I do following a breach of employment?

Communicate the fundamental breach as soon as possible to your employer. If you wait, it will mean you may have affirmed the contract and lose your right to claim constructive dismissal. You should seek urgent advice first if you are thinking of resigning as you may have other options. If you resign, state to your employer that you felt you had no choice but to leave.

What happens after I make my employer aware of a breach of employment?

Review your employer’s grievance policy and consider raising a grievance. Generally your employer will invite you to a grievance meeting to try and resolve the issues. It is important to attend these and make as much effort as possible (or your compensation could be reduced if you decide to litigate).

The grievance outcome hasn’t resolved my issues. What should I do?

If you disagree with the grievance outcome, you should submit an appeal. If this still does not resolve the issue, you should consider all of your options and now would be a good time to seek urgent advice (if you have not already done so). If you are forced to resign, you can take a constructive dismissal case to an Employment Tribunal. This must happen within three months less one day of your termination date.

Making an employment tribunal claim

There is no fee to issue a claim at the employment tribunal. However, legal fees can be costly so you will need to budget for this. You should explore other funding options. For instance, you may have legal expenses insurance to contribute towards your legal fees (and you should be able to instruct the legal firm of your choice).

How much is a claim for constructive dismissal worth?

If successful, a claim is generally capped at a year’s pay or £93,878, whichever is lower. In some cases, this cap does not apply.

Are there alternatives to an employment tribunal claim?

Yes, it is important to remember that you do have options. A cost effective option may be to seek to try and negotiate your exit with your employer. You should seek advice on your options as soon as possible.

  • I’m new to my role, can I still claim for constructive dismissal?

To be eligible you need to be an employee and have worked in your job for two years. There are some exceptions such as for maternity reasons and whistleblowing.

How we can help

For expert legal advice or immediate representation for an Employment Law issue, call Slater and Gordon on freephone 0330 107 4087 or contact us online.

All information was correct at the time of publication.

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