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Constructive Dismissal

What is Constructive dismissal?

Constructive dismissal is a situation where an employee is forced out of their job because of the way their employer behaves towards them. In technical terms, a constructive dismissal is where an employer breaches their employment contract with an employee or breaches the mutual duty of trust and confidence between employer and employee. As a result, the employee feels they have no option but to resign. 

Constructive dismissal can take place due to a single serious incident or a series of incidents which are serious when combined. For constructive dismissal to be considered, the employee must resign soon after the incident or incidents which forced them out.

What are the grounds for constructive dismissal?

The grounds for constructive dismissal are based on evidence of whether or not an employer has done an act to seriously breach an employment contract or the employee’s trust and confidence. In either cases, the swift resignation that occurs in response to this situation is what gives it potential for constructive dismissal. 

Examples of breach of employment contract include:

  • Allowing co-workers, managers or even customers to bully or harass an employee. 
  • Making unreasonable changes to the way an employee works, such as a change in working hours or a change in location which makes it impossible or very difficult for the employee to do their job.
  • Demoting an employee without sound reason
  • Changing an employee’s duties – for example making their job so difficult that they cannot reasonably succeed. 
  • Refusing to pay an employee
  • Failing to make reasonable adjustments for employees who have a disability
  • Failing to provide a safe working environment.

Examples of a breach of duty of trust and confidence include:

  • Unjustified or continued criticism of the employee over a period of time
  • Failing to investigate an employee’s grievance or complaints
  • Undermining an employee’s authority
  • Unreasonable or unjustified surveillance or workplace monitoring.

Can anyone claim constructive dismissal?

Only a person who was an employee can claim constructive dismissal against their employer. Members of staff that are classified as workers or self-employed cannot make that claim. In general, the employee must have been sustained under an employment contract for a period of at least two years to make the claim. 

Employees will raise a grievance when they outline that they have a problem with an employer’s behaviour. Employers must record all grievances made against them in a formal manner in the form of evidence. Bu addressing grievances in such a systematic manner will allow employers to resolve issues at the outset and avoid constructive dismissal claims. 

How to avoid constructive dismissal

The best way to deal with constructive dismissal is to prevent events that lead to that from happening in the first place. No only does this benefit the costs associated with constructive dismissal claims, but also avoids the effects that a claim of this nature can have on existing and potential future employees. 

To avoid constructive dismissal, employers should:

  • Focus on developing a company culture that’s built on respect and fairness. With a healthy company culture, situations that could result in constructive dismissal are less likely to develop.
  • Invest in manager and supervisor training. Managers who understand the risks of constructive dismissal will be less likely to engage in activities that could make an employee’s position untenable.
  • Support managers and supervisors so they know how to deal issues such as poor performance, workplace conflict or health and safety concerns.
  • Make sure up-to-date policies are shared with all employees and are implemented across the business.
  • Encourage employees to share problems or concerns. If employees know their concerns will be taken seriously, they’re more likely to trust that you will address the situation. This in turn helps reduce the chances of you being involved in a claim for constructive dismissal.