What is Constructive Dismissal?

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There are three types of dismissal: unfair dismissal, wrongful dismissal and constructive dismissal. Whilst the claims for the first two can be initiated when the employer dismisses an employee, claims for the last are only initiated when the employee decides they have no other option left other than to resign due to the conduct or behaviour of their employer.

As an employer, this may be confusing for you. How can an employee resign of their own free will and then make a claim against me for dismissal? It is a tricky topic, but it’s handy to know when this could happen and how to prevent it.

Constructive Dismissal

One thing we should state is that an employee cannot simply resign with no prior warning (unless harassment or discrimination is in the picture) and then claim constructive dismissal. In most cases they need to have raised concerns or filed official grievances: resignation should be their last option.

To prevent your employees getting to the point where they want to initiate a claims process against you and your company, listen to and try to solve their problems. It sounds so simple, but it really goes a long way. Keeping your employees happy will help you avoid costly and damaging legal battles.

What Could an Employee Cite as a Reason for their Claim?

There are a range of actions or occurrences which could lead to an employee making a constructive dismissal claim against you, including:

  • Demotion without reason
  • Unjustified reduction of working hours
  • Refusal of company benefits
  • Failure to address complaints or grievances
  • Forcing an employee to relocate or travel with no fair warning
  • Paying them less than what was agreed
  • Changing their duties

Any of the above happenings are likely to be in breach of the contract made between you and your employee, so if you do them without fair warning or reason, your employee is legally able to take you to the employment tribunal

When Can They Sue?

Once your employee has been working for you for two years, they are eligible to make a claim. They then have three months from the date of their resignation to initiate their claim. The only time when the two-year rule is unlikely to apply is in cases of harassment or discrimination.

If your employee continues to work for you following what they believe to be a breach of their contract, they are ‘affirming the breach’, which means they legally accept the new terms, whatever they may be.

For example, if an employee in a bakery was only meant to open and set up the shop, but their boss started to put them on stock-take and delivery duty as well without asking, they could only claim if they had resigned. If they raised a grievance, the boss didn’t change their duties back, and they continued to work for the company and undertook stock and delivery duties, their claim is automatically invalidated.

As an Employer, What Can I Do?

Firstly, if an employee raises a grievance, do your best to deal with it. If this does not work, or if you don’t believe it is a valid grievance, then communicate with your employee and keep them in the loop.

If your employee chooses to resign, they must outline in their resignation letter that they are leaving due to feeling like they have no other option. If they don’t do this, the success of their claim is at stake.

If your employee is serious about their claim, it’s likely that they will have been gathering evidence. Employment law experts would definitely advise you to do the same – the more proof you have that their case is invalid, the more likely you are to win.

If you take any action let it be getting legal advice and support from employment law solicitors. They will be able to advise you on the best route to take and can likely save you from a dent in the company budget and a damaged reputation.