By Steven Stewart, Dispute Resolution Solicitor
steven.stewart@elselaw.co.uk, 01283 526218
1. What is constructive dismissal? It is a species of unfair dismissal which has a statutory definition under Section 95(1)(c) of the Employment Rights Act 1996 (ERA1996) which provides: –
“(i) For the purposes of this Part an employee is dismissed by his employer if (and, subject to sub-section (ii)… only if) –
(c) the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer’s conduct.”
2. It is a claim in which the employer’s conduct amounts to a fundamental/ repudiatory breach of contract which goes to its root and shows that it no longer intends to be bound by one or more of the essential terms of the contract.
3. It can be either a breach of an express term of the contract (written or verbal) or a breach of the implied term of mutual trust and confidence which is the building block upon which all contracts are based, provided it amounts to a fundamental breach of contract. Minor breaches will not suffice.
4. The employee may choose to treat any further performance of the contract as discharged by making an election to accept the breach of contract to bring the contract to an end.
5. In summary therefore, the three elements in order to establish a constructive dismissal claim are:
(i) A repudiatory breach of contract by the employer of either an express or implied term of the contract. Something that the employer proposes to do rather than it actually does can be sufficient.
(ii) There has to be an election by the employer to accept the breach to bring the contract to an end so the employee resigns in response to the breach which must be a material reason for doing so and not for some extraneous reason.
(iii) The employee must not delay in accepting the breach as this may amount to a waiver and/or affirmation of the contract. Although there is no specific period of time as each case it is factually dependent a delay that exceeds to 6 to 8 weeks would usually be too long and fatal to any such claim unless there is an ongoing sequence of bad conduct.
6. Requirements to bring a claim. Must be an employee with a minimum of 2 years continuance employment.
7. Constructive and dismissal cases are difficult to successfully pursue. The success rate is around 5 to 10%. This is because the breach of contract must be so serious as to essentially destroy the ongoing contractual relationship.
8. What can constitute a repudiatory breach?
(i) Failure to pay or a unilateral reduction in salary.
(ii) Unilateral material changes to an employee’s contractual duties/job role. This however is dependent on an examination of the terms of the contract/job description and how that operates in practice.
(iii) Most acts of discrimination.
(iv) Failure to deal or deal properly with a grievance.
(v) The unreasonable suspension of the employee when making serious and unjustified allegations of misconduct/issuing final written warning which is disproportionate.
(vi) Subjecting an employee to an excessive workload and causing stress related conditions.
(vii) Exposing an employee to a terrible working environment and the bullying and harassment of an employee.
9. How is it done? Usually resigning without notice. The reasons or a summary of reasons for resigning should be provided by the employee preferably in writing usually without notice, but the statute does allow for the giving of notice but this could amount to an affirmation of contract certainly if a longer than notice period is provided or is given by the employee.
10. Should a grievance be submitted before submitting a claim for constructive dismissal? Legally failure to submit a grievance will not prevent the claim being made although it may affect the level of compensation awarded as tribunals have the discretion to increase or reduce awards by 25% where the employer or employee unreasonably failed to comply with the ACAS Code of Practice and Disciplinary and Grievance procedures. Therefore, it is usually considered best to submit a grievance before bringing a claim.
For more information and an initial discussion please contact Steven Stewart at Else Solicitors via email or phone: steven.stewart@elselaw.co.uk / 01283 526218.