Constructive dismissal

Contributor -

Philip Landau, founder member, Landau Law Solicitors

Woman holding her head in her hands next to a laptop after claiming constructive dismissal

When you encounter a problem at work, you may feel that you have no option but to resign. In certain circumstances, an employment tribunal may consider that the conduct of your employer was so bad you were, in effect, dismissed even though you may have resigned. This is known as 'constructive dismissal'

Have I been constructively dismissed?

In order to claim constructive dismissal, you need to prove three things:

  • your employment contract was significantly breached;
  • you resigned directly as a result of this breach;
  • you did not accept the breach (eg by remaining too long in your employment without doing anything about it).

You should always obtain legal advice from an employment lawyer before resigning from your job. This will help you decide if you actually have a case for constructive dismissal.

What is a significant breach of contract?

To justify a claim of constructive dismissal, your employer must fundamentally breach the employment contract, or show that they are going to do so. There might be a single serious breach or a series of breaches that add up to something significant.

Examples of the type of breach of contract which can potentially lead to a constructive dismissal claim include:

  • not being paid in full or at all;
  • if your employer does not address complaints of bullying or harassment in the workplace or does not take steps to deal with work related stress;
  • failure to make reasonable adjustments for a disability;
  • neglect of health and safety obligations by your employer (eg making you work in dangerous conditions);
  • sudden demotion, change of location or working hours.

Can I get compensation for constructive dismissal?

In order to claim compensation for constructive dismissal, you can lodge a claim with an employment tribunal. There is a cap on the basic award of20,000 (a maximum of 30 weeks' pay, with the maximum weekly pay limited to £700).

You may be able to claim a higher 'compensatory' award to compensate you for financial losses you suffer as a result of being unfairly dismissed. The maximum compensatory award is £115,115 or a year's pay, whichever is lower.

Additionally - or alternatively - you can lodge a claim for wrongful dismissal on the basis that by being forced to resign you did not receive your contractual notice. You would usually do this if you do not qualify in making a claim for constructive dismissal because you have not worked for two years for the same employer (see below). You can make a claim with an employment tribunal (where there is a maximum award of £25,000) or in a civil court where this cap does not apply.

The right option will depend on your particular circumstances, including how much you are paid and what notice period you are entitled to.

Do I need to have worked for my employer for a minimum amount of time to claim constructive dismissal?

If you want to pursue an unfair dismissal claim, in general you must have worked for a minimum of two years for your employer.

There is no minimum qualifying period for wrongful dismissal claims and claims that involve discrimination.

Constructive dismissal - action points

  • Always discuss the problem first with your line manager or HR department. Follow your company grievance procedure to make an official complaint and consider writing a letter of grievance before you resign. If you don't lodge a grievance first, your damages could be reduced at tribunal.
  • If you are unable to resolve the problem by talking to your employer, ask an employment lawyer before handing in your notice. They will help you to determine if you have a potential constructive dismissal claim and what your best course of action is.
  • If you continue to work for your employer after a breach of contract occurs, it may be more difficult to claim constructive dismissal.
  • If you decide to resign, make sure you specify the reason for your resignation (ie the breach of contract) in writing.
  • There is generally a three-month time limit for lodging a constructive dismissal claim, counting your last day of employment as 'Day 1'.

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