What is constructive dismissal?

It is a sad fact of life that employees often feel as though they have been treated so badly by their employer that they have no choice but to resign from their job. From a legal perspective, the issue of whether an employee was dismissed becomes important because it determines whether a claim for Unfair Dismissal can properly be brought.

Generally, an employee is not regarded as having been dismissed if they resign. However, section 95(1)(c) of the Employment Rights Act 1996 provides that an employee is deemed to be dismissed where they terminate the contract under which they are employed (with or without notice) “in circumstances in which they are entitled to terminate it without notice by reason of the employer’s conduct”. This is commonly known as “constructive dismissal”.

A category of conduct which gives rise to constructive dismissal is a breach of an express term of the contract of employment, such as a deliberate and unjustified reduction in or failure to pay wages or change in the employee’s job description.

A further category of conduct which gives rise to constructive dismissal is a significant breach of an implied term of the contract of employment. One such implied term is that the employer will not, “without reasonable or proper cause, conduct [itself] in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between the employer and employee” (see Woods v WM Car Services (Peterborough) Ltd [1983] IRLR 413). Examples of such conduct by an employer include:

  • making unjustified accusations against the employee
  • lying to the employee
  • bringing unjustified disciplinary proceedings
  • acts of unlawful discrimination
  • raising performance concerns during a period of sick leave  
  • an individually innocuous act which, when viewed in the context of previous conduct, amounts to damage or destruction of confidence and trust

Where an employee can be shown to have been constructively dismissed, they may – subject to other requirements set out in the Employment Rights Act 1996 – be able to bring a claim for Unfair Dismissal.

Demstone Chambers are specialist employment law barristers. We are able to help with all employment disputes including: drafting appeals against disciplinary findings or attending disciplinary hearings, and all work relating to Employment Tribunal claims including drafting grounds of claim, advising on settlement offers, and attending Tribunal hearings.


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