There is much confusion amongst the public over the term constructive dismissal. I have heard the term used by employees saying that when there is an actual dismissal they have been constructively dismissed and some businesses are totally surprised that such a concept exists until of course they get their first employment tribunal claim. In legal terms, there is no such claim as “constructive dismissal” it is an unfair dismissal like any other, as employees who resign can still bring an unfair dismissal claim. However, the first question the Tribunal must decide in such a case is whether there has been a dismissal at in accordance with s95(1)(c) of the Employment Rights Act 1996.
“Constructive dismissal” is commonly used to describe a case whether the employee resigns in response to their employer’s conduct in breach of a critical term of their contract making it a resignation in response to a repudiatory breach. The term breached can be an express or an implied term. Express terms are those agreed between the parties and breaching one of these fundamental terms could result in a claim for unfair dismissal. For example deciding unilaterally to cut the employee’s pay by 50% or withholding payment altogether. Implied terms are those that are implied into a contract whether through custom and practice or law to give operation to the contract. One example often cited is a breach of the implied term of mutual trust and confidence.
In order for such a claim for unfair dismissal to succeed, the employee must show that the employer was in repudiatory breach of the employment contract, the employee resigned in response to that breach and that he did so promptly. Having another job to go to (particularly in the current climate) does not preclude a claim providing the employer’s conduct was the principal or contributory reason for the resignation. Time is of the essence however, and delaying the resignation can result in the employee being seen to affirm the contract i.e. agree the change.
If the claim for “constructive dismissal” succeeds then the Tribunal will assess compensation in the same way as any other unfair dismissal claim in awarding a basic award and then a compensatory award. A claim must be brought within the usual three month time limit from the effective date of termination and the employee must have at least one year’s service (two year’s if employed after 6th April 2012) with some limited exceptions.
As these types of claims carry the extra hurdle of showing there has been a dismissal in the first place, prospects of success are generally lower than an ordinary unfair dismissal case where in 9/10 cases dismissal itself is not in dispute. Statistically more claims fail than succeed when we look at bringing a claim such as this which is why specialist advice is always recommended before you jump or push that employee that bit too far.