Constructive Dismissal

"The employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct".

Constructive Dismissal is a claim based on the employer breaching the terms of an employee’s contract of employment.  It can also apply in circumstances where there is an anticipated breach of contract which has not yet taken place, but the employer has confirmed will occur.

There are a variety of terms which are usually set out in writing in the employee’s contract which are called express terms.  There are also terms which are implied into all employment contracts although do not need to be expressly stated.  One of the main implied terms is that there is a duty of trust and confidence and employers are under an implied obligation that they will not, without reasonable and proper cause, conduct their business in a manner likely to destroy or seriously damage the relationship of trust and confidence between employer and employee.

Where there is an actual or anticipatory breach an express or implied term by the employer and it is a breach which is sufficiently serious so as to justify the end of the contract, the employee can hold the employer responsible for the employment coming to an end provided they have not delayed too long effectively affirming the contract, and if they can show their decision to leave was in response to the breach.

What constitutes a breach that falls into the justification for the claim, as set out above, is often not straight forward.  In some cases it can be clear where there have been acts of discrimination or terms such as pay and benefits are breached, however, in most cases it is more subtle and difficult to assess.  Whether a repudiatory breach of contract has taken place is often a question of fact and degree which turn on context and circumstance.

In cases that involve a breach of the fundamental implied term of mutual trust and confidence Tribunals will consider whether the employer had reasonable and proper cause for its conduct, and thereafter also consider whether the conduct was calculated or likely to destroy or seriously damage the relationship of trust and confidence. 

The test thereafter, having considered the employer’s conduct, is whether, if judged reasonably and sensibly, the employee should reasonably be expected to put up with it.

The damages claimed are the same as for a normal unfair dismissal albeit an employee can, where justified, leave with immediate effect and also hold the employer responsible for their notice period. Conversely the employee is also allowed to give notice of termination without being deemed to have affirmed the contract whilst continuing to work out their notice period.

Constructive dismissals are difficult matters for both the employer and the employee to deal with but with this type of claim the burden of proof is on the employee to establish their claim rather than the employer having to defend their decision to dismiss.