Springhouse Solicitors

Constructive dismissal – an essential guide

Constructive dismissal is one of the most frequent and important topics for legal advice at Springhouse. It is, however, commonly misunderstood.

An employee needs to have resigned in order to bring a constructive dismissal claim, and this is naturally a difficult decision to make. The decision is made more difficult by the law that surrounds constructive dismissal, and the difficult requirements to bring a successful claim.

Constructive dismissal is a way of saying ‘forced dismissal’. The Employment Rights Act 1996 says that any resignation that and employee is entitled to make without giving notice should be treated as a dismissal. And employees are entitled to resign without giving notice only where this is in response to a “repudiatory breach of contract” on the part of the employer, or, in other words, where they have been forced to resign because of the conduct of their employer.

A better phrase for constructive dismissal would therefore be ‘constructive unfair dismissal’. This is because, once constructive dismissal has been established, it is then open to the employer to show that any such dismissal was fair. Conversely the constructively dismissed employee still needs to establish unfair dismissal.

3 basic conditions therefore need to be met for any constructive unfair dismissal claim to succeed:

  1. Was the employer in repudiatory breach of contract, and did the employee resign in response to this?
  2. Did the employee do anything that indicated acceptance of the breach?
  3. Was the dismissal fair in any case?

Repudiatory breach of contract

One way of looking at this question is to ask whether or not the employer’s action breached a ‘fundamental term’ of the employee’s contract.

Some fundamental terms are obvious, such as the right to be paid and the right not to be discriminated against. Some are less obvious and, as with most employment law concepts, each case will depend on its own facts. As the relevant types of actions that can be taken by the employer are many (and have in the past included for instance failure to hear grievances and the imposition of inappropriate disciplinary sanctions) legal advice will need to be taken to get a good view.

One type of repudiatory breach that is very frequently relied on is the breach of the implied term of mutual trust and confidence, which the courts have held is a fundamental term. For the employee to establish a breach of the implied term of trust and confidence he/she needs to show that the employer has, without reasonable and proper cause, “conducted himself in a manner calculated or likely to destroy or seriously damage the relation of confidence and trust between them.”

So to establish a breach of mutual trust and confidence there are 2 important hurdles for the employee to overcome, namely: did the employer have reasonable and proper cause to take those steps in any case; and if not was the conduct serious enough to destroy or seriously damage trust and confidence in the relationship?

Employees bringing constructive dismissal claims also need to show that they have resigned in response to the employer’s repudiatory breach. This can be especially hard when the employee has another job to go to, or there is another reason that the employer can identify.

The burden of proof is on the employee to prove these matters, making it hard to bring cases of constructive dismissal. The difficulty of overcoming these hurdles should not be underestimated.

The “last straw” doctrine

A build up of a number of more minor breaches by the employer can amount to a fundamental breach of contract. In this case, none of the individual actions needs to amount to a repudiatory breach in itself, but can be something less than this. Indeed, the last straw itself does not need to amount to an act of repudiatory breach. The actions will need to be looked at as a whole.

Waiver and affirmation

If a fundamental term of the employment contract has been breached by the employer, for instance because they are paying them too late or too little, and the employee effectively goes along with this without any complaint for an adequate period of time, they may not be able to bring a claim for constructive dismissal. In these cases the tribunal may say that they have “let bygones be bygones” and, in more technical language, that they have either waived the breach, or affirmed the contract in its new form.

This is often a very relevant point in constructive dismissal claims: many employees, as it is such a drastic step, will naturally want to weigh their options very carefully before resigning. Factors that will excuse delay include whether or not they are actually at work, whether they have a family to support, whether it is easy to find a reasonably equal job, and length of service. Ultimately whether a delay is too long will depend on what is reasonable in all the circumstances.

Was the constructive dismissal unfair?

Once the employee has established that the reason for the resignation was the fundamental breach of contract on the part of the employer, the Tribunal needs to go on to find whether the dismissal was fair or unfair.

The employer will need to show that the actions it took in fundamental breach of the contract were for a fair reason. This may seem strange and on the face of it very difficult to prove. However, the list of fair reasons for dismissal would cover, for instance, treatment relating to the redundancy or capability of the employee. It is relatively easy to see how an employer may rely on a reason like this for their behaviour, but whether or not that reason and behaviour was fair in all the circumstances is another question.