Employee rights

What is Constructive Dismissal?

Constructive dismissal is the legal concept used when an employee claims unfair dismissal having resigned.

The essence of claiming constructive unfair dismissal is that the employee will argue that he or she has been forced to resign from their position due to a fundamental breach of contract by the employer. The word “fundamental” is critical in this context. It means that only a breach of contract by the employer which goes right to the essence of the contractual relationship will be enough for the employee to resign and succeed with a claim.

Examples of possible breaches of contract which might be fundamental breach include

  • Altering an employee’s working hours without consultation
  • Refusing to allow the employee time off for holiday (not when the employee can take holiday but refusing general time off)
  • Withholding pay
  • Putting the employee on probation without following the correct company procedure
  • Refusing to allow the employee to work
  • Demoting the employee without giving a reason
  • Making the employee work under dangerous conditions
  • Sexually harassing or bullying the employee

Whether a breach of contract is a fundamental breach is not always clear and so employees really ought to take legal advice on the issue. Resigning without being quite certain of grounds for a claim is risky, and sometimes it’s better to wait and see if the employer will dismiss or possibly offer a termination arrangement by consent in the form of a compromise agreement. Be aware also however that if there is a fundamental breach and the employee does not act on the breach by resigning, the employer may successfully argue that the employee has waived the breach.

More advice on constructive dismissal