Constructive Dismissal

This guide will assist you with understanding what constructive dismissal is and a how to guide to arm you with the information you will need when negotiating a settlement agreement exit package.

What is constructive dismissal?

Unlike unfair dismissal (where your employer terminates your contract), constructive dismissal is when you are forced to resign from your job against your will because your employer has done something that seriously breaches your contract. To pursue a successful claim you will need to prove your employer seriously breached your contract and that you resigned in response to it.

What do you need to bring a constructive dismissal claim?

If you wish to bring a claim for constructive dismissal you must have the following:

1. Two or more years continuous service
2. The employer commits a ‘fundamental breach’ of your contract

2 years’ service rule

In order to bring a claim for constructive dismissal you need to have worked for your employer for two years or more. If you don’t have two years of service then any claim in the tribunal will fail. Experienced employers will be aware of this and will often force you to constructively dismiss yourself in the knowledge any legal claim will fail.

What is a fundamental breach?

There is no exhaustive list of behaviour, but it includes breaches of an express or implied term of your employment contract.

In many cases, employees rely on a breach of the implied term of mutual trust and confidence; this is grounds for a resignation because the employer has behaved in a way that has destroyed or seriously damaged the trust and confidence between them.  This does not cover all instances of poor treatment or unreasonable behaviour.  Examples of a ‘fundamental breach’ could include:

• Reducing your pay or withdrawing a contractual benefit;
• Removing your core duties or significantly changing your job role without your consent;
• Subjecting you to a bullying or discriminatory working environment;
• Poor handling of a grievance;
• Inept handling of disciplinary matters, e.g. suspending you without due cause, making a spurious allegation against you, or giving you an unjustified warning; or
• Subjecting you to an excessive workload which it is reasonably foreseeable will cause damage to your health.

Exceptions to the 2 year rule

There are limited exceptions to the 2 year rule which can include:

• You whistle blew on your employer and your employer harassed and victimised you
• You suffered discrimination
• You are not paid
• You are demoted without any reason
• You are forced to accept unreasonable changes to your role or working conditions

Your employer’s breach of contract may be one serious incident or a series of incidents that are serious when taken together.

Constructive Dismissal - Settlement Negotiations guide

• The employer’s behaviour must be sufficiently bad, leaving you with no option but to hand in your notice. If the employer’s behaviour was not bad enough, a claim will often fail in the tribunal. At the other end of the scale if you continue to work for your employer under poor behaviour, you will be deemed to have accepted the

• Don’t resign. You should put your employer on notice of the difficulties you are facing. If you work for a large organisation, your employer may not be aware of the problems or they may be aware but make no effort to deal with the issues in the hope you simply leave or the crank up the pressure with a sham performance review or disciplinary.

• Keep records. It is important both for the purpose of negotiations and to assist pursing a contractive dismissal that you take notes of all bad behaviour which you have been subjected too.This will give you a clear justification for your resignation if the foundations

• Have a ‘protected discussion’. If your employer is aware of your intention to pursue a constructive dismissal claim they may approach you to have an a protected discussion. This is an off the record discussion which generally cannot be used either by you or your employer in the Employment Tribunal to support a claim. Often however in a constructive dismissal situation your employer will be unaware of your difficulties or they will be actively applying the pressure. You may therefore have to get the ball rolling and request a ‘protected discussion’ yourself.

• Put your concerns in writing. If you feel confident enough you can set out the employer’s bad behaviour in writing. Mark an communications ‘without prejudice’ to ensure it cant be used against you in the employment tribunal or court. Once you have set our your concerns and all of the fundamental breaches your employer has committed, you can suggest the employer make you a compensation proposal to settle a potential constructive dismissal claim.

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