Examples of pay outs for constructive dismissal
Constructive dismissal compensation: Your guide to payouts in England and Wales
Understand your rights and claim constructive dismissal compensation
Facing unbearable working conditions that force you to resign? You may be eligible for constructive dismissal compensation under the employment laws of England and Wales. This guide explains how to claim constructive dismissal, eligibility criteria, and how dismissal payouts are calculated. Springhouse Solicitors, experts in employment law, provide clear insights to help you navigate this complex process. Read on to understand your rights, potential awards, and key steps to secure fair compensation.
What is constructive dismissal?
Constructive dismissal occurs when an employer’s serious breach of contract leaves you no choice but to resign. Examples include:
- Unpaid wages or sudden demotion
- Bullying, harassment, or unsafe working conditions
- Unreasonable changes to your role or hours
- Action which fundamentally breaches the implied term of trust and confidence
To claim constructive dismissal, you must prove the breach was significant and that you resigned in response. Acting quickly is crucial, as delaying may imply you’ve accepted the breach.
Who can claim constructive dismissal?
Eligibility Criteria
Most employees need two years’ continuous service to claim constructive dismissal, per the Employment Rights Act 1996. However, exceptions apply for automatically unfair reasons, where no service period is required:
- Whistleblowing
- Discrimination (e.g., based on race, gender, disability, pregnancy, maternity)
- Raising health and safety issues
Employees with both less or more than two years’ service may still claim wrongful dismissal; a claim for breach of contract covering unpaid notice.
How much Is constructive dismissal compensation?
Constructive dismissal payouts in England and Wales consist of two main components: the basic award and the compensatory award. Here’s how they work:
1. Basic Award
This is a statutory award based on your age, weekly pay, and years of service:
- Under 22: 0.5 week’s pay per year of service
- 22–40: 1 week’s pay per year
- 41 and over: 1.5 weeks’ pay per year
As of 2025, weekly pay is capped at £71900, and service is limited to 20 years. The maximum basic award is £21,570.
Example: A 35-year-old with 5 years’ service and £600 weekly pay would receive: 5 years × 1 week × £600 = £3,000.
2. Compensatory Award
This covers financial losses, such as:
- Lost wages and benefits (e.g., pension, health insurance)
- Future loss of earnings (if you struggle to find new work)
The compensatory award is capped at £118,223 or 52 weeks’ gross salary (whichever is lower, as of 2025). If your claim is for an automatically unfair reason (see above), then there is no cap on the compensatory award.
Example: If you earn £70,000 a year and are out of work for three months, and then accept a lower-paying job, the tribunal may award your full loss for three months and then the difference in pay between the two jobs for a further period.
Other Considerations
- Mitigation: When seeking compensation from an employment tribunal, you must mitigate your losses by actively seeking new employment, as tribunals will reduce awards of compensation if you don’t comply with this duty.
- Polkey Deduction: If a tribunal believes dismissal would have occurred in any event even with fair procedures having been followed, your award may be reduced (e.g., by 50% or more).
- Offset Payments: Redundancy or notice pay received may reduce your award.
- Contributory fault: If the tribunal finds you were partly to blame for your dismissal, it can reduce the award on a percentage basis for this reason too.
How to Claim Constructive Dismissal
Claiming constructive dismissal compensation is complex and requires careful steps, for example, have you:
- Raised a grievance: Documenting the breach formally with your employer.
- Resigned promptly: Delay may weaken your claim. Consider working “under protest” while reserving your rights.
- Resigned because of the breach; your resignation letter should be clear and unequivocal as to why you have resigned.
- Triggered ACAS Early Conciliation: This is a mandatory step before filing a tribunal claim. ACAS mediates to resolve disputes without litigation and has strict time limits.
- Filed a tribunal claim: These generally need to be submitted within three months less one day from your last day of employment. Extensions may apply with ACAS conciliation.
Given the evidential burden and that most claims for constructive dismissal fail, as early as possible, you should consult an employment law solicitor to strengthen your case. Springhouse Solicitors can assess your claim and guide you through the process.
Challenges of Constructive Dismissal Claims
Winning a constructive dismissal case is tough. You must prove:
- A serious breach of contract occurred
- The breach caused your resignation
- You acted reasonably in resigning
Resigning is often without notice so also means immediate loss of income, and tribunal cases can take many months (sometimes years) to be resolved. Legal fees are rarely recoverable, so you need to weigh the financial risks carefully. A solicitor can help evaluate your chances of success.
Why Choose Springhouse Solicitors?
Navigating employment law requires expertise. Springhouse Solicitors offers:
- Decades of experience in constructive dismissal claims
- Tailored advice on how to claim constructive dismissal
- Transparent guidance on costs and risks
Contact us today for a consultation to explore your constructive dismissal compensation claim.
Frequently Asked Questions
How long do I have to claim constructive dismissal?
You must submit the claim within three months less one day from your last day of employment, although ACAS conciliation may extend this.
Can I claim if I have less than two years’ service?
Yes, for automatically unfair reasons (e.g., whistleblowing, discrimination) or wrongful dismissal (notice period).
What’s the maximum payout for constructive dismissal?
Up to £21,570 (basic award) plus £118,223 (compensatory award), as of April 2025, depending on losses and caps.
Our expert employment law solicitors all have many years’ experience advising individuals who are in your position. We will be able to guide you through the process and to help you secure the best possible outcome.
We offer a range of services, so please contact our friendly customer services team to discuss further via hello@kilgannonlaw.co.uk or 0800 915 7777.
Disclaimer
The above provides a general overview relating to unfair and constructive dismissal and is not intended nor construed as providing specific legal advice.
This article is for information purposes only and is correct at the time of publication. It does not constitute legal advice.
11.05.25
