Constructive dismissal FAQs
This article answers some frequently asked questions about constructive dismissal. To find out how to claim constructive dismissal, click here.
What is constructive dismissal?
Constructive dismissal is a term used when an employee is not formally dismissed by their employer, but is forced to resign because of their employer's unlawful behavior. In order to pursue a claim for constructive dismissal, you must show that:
- your employer committed a serious breach of your employment contract;
- you did not accept the breach; and
- you felt forced to resign because of that breach.
What constitutes a serious breach of contract in this context?
Examples of serious breaches of contract in the context of constructive dismissal include:
- unilaterally cutting your pay (including overtime and fringe benefits) or failing to pay you;
- arbitrarily demoting you to a lesser role without reason;
- changing your job description/duties, working hours or place of work without your agreement;
- threatening to dismiss you if you do not agree to accept changes to your employment terms and conditions;
- making it impossible for you to do your job effectively;
- failing to give you reasonable support to carry out your job without disruption, harassment, or bullying from fellow workers;
- forcing you to work in conditions where health and safety regulations are ignored;
- seriously breaching the 'duty of mutual trust and confidence' - which is implied into every employment contract - e.g., wrongly and without evidence accusing you of theft.
When will an employee be deemed to have accepted or waived a breach (thus precluding a claim of constructive dismissal)?
An employee does need to tell the employer outright that she accepts or waives the breach. Acceptance must, nonetheless, be unambiguous and unequivocal. In this context, failing to resign within a reasonable period after the breach may be deemed an acceptance or waiver of it, and perhaps even an affirmation of the employment contract, thereby precluding a claim of constructive dismissal.
Note, however, that where there are a series of acts by the employer, which individually or in the aggregate constitute a serious breach of contract, culminating in a 'last straw' event that triggers resignation, the employee's response may be measured from the last incident rather than the first. Thus, in this case, an employee's failure to resign after the first act may not constitute an acceptance or waiver.
What behaviour would constitute a major breach of the implied duty of mutual trust and confidence?
This duty means that employers and employees should not 'without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence between them'. As indicated above, wrongly accusing an employee of theft without evidence would constitute a serious breach of this duty. Other examples include:
- lying to an employee who wants a transfer that no vacancies exist;
- giving an employee a final written warning where it is not justified;
- failing to make reasonable adjustments, which amounts to disability or sex discrimination;
- foul and abusive language by a senior manager;
- other conduct deemed so seriously unreasonable it amounts to a repudiatory breach of contract.
Note, though, that if an employee is already in serious breach of the duty herself, even if the employer is unaware of it, she cannot claim constructive dismissal.
Do I simply need to show that I was constructively dismissed to win my claim?
No. Once you demonstrate that you were constructively dismissed, you must also show that the dismissal was unfair or wrongful.
There are several ways to prove an employer's action was unfair, for example because it was grounded on:
- pregnancy, maternity, or paternity;
- marital status
- family ties;
- membership or non-membership of a trade union;
- assertion of a statutory right;
- industrial action;
- jury service;
- activities as an occupational pension scheme trustee; or
- health and safety.
This is not an exhaustive list.
Generally, only employees who have a year's continuity of service can claim unfair dismissal. But this rule does not apply if you are claiming automatic unfair dismissal (NB. dismissal for any of the reasons listed above would constitute automatic unfair dismissal).
You must also comply with strict time limits to claim unfair dismissal. Normally a claim must be brought within three months of the last day of employment, counting the last day of employment as the first day of the three month period.
Moreover, certain categories of employees are barred from claiming unfair dismissal. These include members of the armed forces, police service and mariners.
Proving wrongful dismissal simply requires you to demonstrate that your employer breached a term in your employment contract, which resulted in dismissal or forced you to leave. This is a lesser burden than that required for constructive dismissal. Thus, assuming you establish constructive dismissal it will automatically be wrongful.
Is constructive dismissal hard to prove?
Constructive dismissal can be hard to prove because you have to show that your employer's actions amounted to a serious breach of contract forcing you to quit. It is often difficult to show that your employer's behavior was so bad as to make you leave. Therefore, having witnesses and other tangible evidence to back up your claim is essential.
Can I claim unemployment benefit after constructive dismissal?
Yes, you can apply for job seekers allowance if you have been constructively dismissed. However, your allowance may be delayed for up to 26 weeks; therefore, you should make sure that your employment centre understands your circumstances and that you are pursuing a legal claim against your employer for constructive dismissal.
How much compensation could I receive for wrongful constructive dismissal? And are there any time limits to claim compensation?
If you make a claim for wrongful constructive dismissal, you can claim in either the civil courts or an employment tribunal. Note, however, that an employment tribunal cannot award more than £25,000 in damages. There is no such restriction in the civil courts. Moreover, with an employment tribunal you must comply with a strict three-month time-limit to file a claim. In the civil courts, you have much longer - six years.
Damages for wrongful dismissal are subject to the same rules as other breaches of contract:
- Remoteness: You cannot recover damages that do not arise naturally from the breach. Say, for instance, you become so distraught after your employer's unilateral decision to cut your pay that you leap from your chair and inadvertently shatter an expensive vase. It would be a stretch for you to argue that the shattered vase was a natural consequence of your employer's breach.
- Compensation: You may claim damages to compensate you for losses resulting from a breach of contract, but not to punish your employer. The aim of damages should be to put you, so far as money can, in the same position as if the contract had been performed. This means you can claim loss of wages and other benefits, such as holiday pay, commission, bonuses, health insurance, a company cars, pensions, etc. You may also claim interest. Note, however, that damages may be reduced if you fail to mitigate your loss (e.g., look for another job). Compensation is also subject to deductions for income tax, National Insurance , and social security benefits you received. Lastly, any money awarded for wrongful dismissal will usually be cancelled out by the amount received for unfair dismissal, and vice versa, to stop you receiving double compensation.
What about compensation for unfair constructive dismissal?
Unlike wrongful dismissal, you cannot file a claim for unfair dismissal in the civil courts. You must go before an employment tribunal.
Compensation for unfair dismissal consists of two elements:
- the basic award; and
- the compensatory award.
The basic award is calculated in the same way as redundancy pay. How much you receive depends on how long you have been employed, your age, and your weekly pay before tax:
- for each year of continuous employment between the ages of 16 and 21 you will get half a week's pay;
- for each year of continuous employment between the ages of 22 and 40 you will get one week's pay;
- for each year of continuous employment between the ages of 41 and 65 you will receive one and a half weeks' pay.
However, as with redundancy pay, there is an upper limit of £450 (gross) on the amount of weekly pay you can claim and a maximum overall payment of £13,500.
In addition, any period of continuous employment over 20 years is disregarded and for every month you are over the age of 64 you lose 1/12 of your pay.
There are two main differences between the basic award and redundancy pay:
- in some circumstances, the basic award is subject to a minimum payment of £4,700 (e.g., if you are dismissed for a reason connected to carrying out your duties as a safety representative, employee representative, trustee of an occupational pension scheme, or trade union activities);
- the tribunal can also reduce the basic award to take account of your conduct and receipt of redundancy pay.
Turning to the compensatory award, this allows compensation for past, present, and future loss of net earnings, fringe benefits, overtime and bonuses. It may also include loss of pension rights and other statutory rights, and expenses in looking or relocating for a new job. A premium for delayed payment or other reasons may also be payable. The maximum compensatory award a tribunal can make, however, is limited by statute (as of 1st February 2013, £74,200).
Note also that compensation is subject to deductions such as income tax, National Insurance , and social security benefits received, and may also be reduced because of other factors (e.g., if you fail to look for alternative employment and mitigate your loss or the tribunal finds you contributed towards your own dismissal).
Can I make any other claims for compensation?
Yes. For example, where an act of unlawful discrimination by your employer (e.g., sex discrimination) forced you to resign, a court or tribunal could award unlimited damages.
- Find an employment solicitor (Solicitor Directory)
- Should I resign and claim constructive dismissal? (Findlaw.co.uk)
- Constructive dismissal law news (The Solicitor)
- Employment law Q&A (Community)