What Is Constructive Dismissal?

Sometimes, employees feel they have no choice but to terminate their employment because of their employer’s actions. Although resignations are usually voluntary, the law recognises that certain circumstances might force an employee to quit. 

This situation can be confusing and stressful for both parties, so understanding the legal position and how to minimise a dispute is vital. Our article explains constructive dismissal, why it happens, how to avoid it, and the procedure for a claim. For advice, contact Helix Law. 

What Qualifies as Constructive Dismissal?

Definition of Constructive Dismissal

Constructive dismissal is dealt with under English and Welsh employment law. It occurs when an employee resigns in response to their employer’s conduct, where such conduct constitutes a breach of contract. The law protects an employee in this situation by acknowledging that continuing to work for the employer would be unjustifiable. 

To establish a successful claim, the employee must:

1. Fall within the legal definition of ‘employee’; and
2. Have worked at the company for at least two years. 

An ‘employee’ under English and Welsh law is someone who works regularly under an employment contract. 

They must also prove:

1. Their employer fundamentally breached their employment contract, whether an express or implied term.
2. They quit due to the breach, and not for any other reason.

Key Reasons for Constructive Dismissal

Constructive dismissal can arise for various reasons. Some of the most common include:

Breach of Contract

Serious breaches of explicit or implicit contract terms may justify the employee terminating their employment and claiming constructive dismissal. This can include a failure to pay wages, an unreasonable demotion, or the removal of company benefits without consent. 

Bullying and Harassment 

Employers have a legal responsibility to prevent bullying, harassment, and discrimination in their workplace. If they ignore or don’t take reasonable steps to stop it, this can constitute a breach of contract, forcing the employee to leave. All employers should have and enforce robust policies regarding workplace harassment. 

Unreasonable Changes to Duties or Workplace

If a company drastically changes staff working hours, duties, or work location without consent, this can raise grounds for a claim. Some jobs require a degree of flexibility, but employers should always state this in the contract or obtain the employee’s prior consent. 

Failure to Address Grievances 

Staff should be able to raise concerns with their employer and expect them to be dealt with appropriately and in good time. A company that ignores or fails to correctly handle grievances could be in breach of contract, justifying an employee’s resignation. A claim will more likely be successful if the grievance relates to a serious issue, such as health and safety. 

Providing an Unsafe Working Environment

Employers have a legal duty to ensure employees have a safe working environment, including complying with health and safety laws and protecting staff from risks. If a staff member quits because of an unaddressed health and safety risk, they may be able to claim constructive dismissal. 

How to Avoid Constructive Dismissal

Employers can take various steps to prevent this situation from arising.

Address Grievances 

Companies should respond to grievances promptly and sensitively, ensuring they adopt a consistent approach to all complaints. Properly investigating employee issues and keeping staff updated helps maintain trust and reduces the risk of a contractual breach. 

Treat Employees Fairly 

Promoting a respectful and non-discriminatory workplace is vital to reducing the risk of a claim. Companies should communicate clear bullying and harassment policies to their managers and senior staff to ensure compliance. 

Adhere to Employment Contracts

Employers can avoid dismissal claims by complying with their employment contracts. This means adhering to the written (explicit) and implied terms, such as the duty to maintain a relationship of trust and confidence. Companies should ensure they have clear and enforceable contracts to minimise the potential for disputes. They should also obtain the employee’s agreement to any fundamental contract changes. 

Maintain Open Communication

Communicating regularly with staff about organisational changes helps maintain trust and manage expectations. Sudden alterations to how employees work can create animosity and misunderstandings, increasing the risk of forced resignations. 

Provide Adequate Training

Managers and senior staff are responsible for overseeing and enforcing workplace policies, so comprehensive training is crucial. Employers should invest in regular training sessions to avoid inadvertent breaches and ensure they’re prepared to manage sensitive situations. 

Constructive Dismissal vs Unfair Dismissal

Constructive and unfair dismissal are both valid claims under English and Welsh employment law. However, unfair dismissal arises when the employer terminates the employee’s contract without a fair reason or fails to follow a fair procedure. 

Both parties must understand the different criteria for these claims to understand the legal position and the correct claim to pursue. The table below summarises the other primary distinctions. 

Constructive dismissal	Unfair dismissal
The employee ends the contract.	The employer ends the contract.
Requires a fundamental contract breach.	Doesn’t necessarily require a breach, just an unfair reason or procedure.
Burden of proof is on the employee to prove the breach and that it caused them to resign.	Burden of proof is on the employer to prove the termination was for a fair reason.
Often harder to prove.	Often easier to prove.

In both cases, the employee must have continuously worked at the company for at least two years to bring a claim, unless it relates to discrimination, whistleblowing, or health and safety. 

Constructive Dismissal Claims: Timing and Procedures

Before considering formal proceedings, employees should speak to their employer, try to resolve matters amicably, and raise a grievance if appropriate. If this doesn’t work, they should take the following steps:

1. Send a letter of resignation to their employer as soon as possible after the alleged breach. The letter should state their reasons for leaving. 
2. Notify the Advisory, Conciliation and Arbitration Service (Acas) of the dispute and engage in Early Conciliation to try to resolve matters without tribunal proceedings. Early Conciliation can take up to six weeks, during which time the claim’s limitation period pauses. 
3. File a claim with the employment tribunal on Form ET1. They must do this within 3 months minus one day from the last day of their notice period or the date of resignation if no notice was given. 

The Tribunal will send the employer a copy of the claim. The employer must respond in Form ET3 within 28 days and state whether they accept or deny all or part of the employee’s case. 

The Tribunal may list a hearing to clarify certain preliminary issues. If the matter isn’t settled by this stage, the parties attend a final hearing, where they each present their evidence and the Tribunal decides if the claim is made out. It can take several months to receive an outcome, and possibly even longer in more complex cases. 

If either party wants to appeal the Tribunal’s decision, they must do so within 42 days of the written decision. They can only rely on points of law, and not disagreements as to the facts. 

Frequently Asked Questions

Is It Hard To Prove Constructive Dismissal?

Constructive dismissal can be difficult to prove, as the employee must prove a serious breach and a direct link between the violation and their decision to resign. A claim’s success relies on strong and credible evidence, such as written communications, workplace policies, and witness statements, which aren’t always readily available. 

Final Thoughts

Constructive dismissal is a complex area of employment law that protects employees who are forced to resign due to their employer’s serious breaches of contract. Understanding what constitutes a breach, recognising the common triggers such as harassment or unsafe working conditions, and knowing how to respond through proper procedures is crucial for both parties. 

Employees must act promptly and follow the correct steps—from raising a grievance and submitting a clear resignation letter, to engaging in Acas Early Conciliation and submitting a tribunal claim within the required deadline. Employers, meanwhile, should prioritise fair treatment, transparent communication, and legal compliance to reduce the risk of such claims arising.

If you believe you’ve been constructively dismissed—or if you’re an employer looking to reduce risk and strengthen your policies—expert legal advice can make all the difference. Contact Helix Law today to speak to one of our specialist employment solicitors, who can give you tailored advice on your situation.