Legal Q&A: The qualification for a constructive dismissal claim

Daniel Isaac, principal in the employment team at Withers, answers the key questions on the circumstances under which a claim for unfair constructive dismissal by an employee can stand or fall.

Q What is the definition of constructive dismissal?

A Constructive dismissal occurs where an employee terminates their employment in response to their employer's treatment. Although there has been no actual dismissal, the treatment is sufficiently bad that the employee is entitled to regard themselves as having been dismissed.

Q What does the employee have to prove?

A The legal definition is the termination of employment by an employee in response to a fundamental breach of contract by the employer.

Sometimes this will be of an express term of the contract of employment, such as the right to be paid a certain amount on a certain date. More commonly, it will be that the employer's behaviour destroys or seriously undermines the relationship of trust and confidence that should exist between employer and employee by, say isolating them or failing to deal with a grievance.

Q How easy is it to show constructive dismissal?

A Constructive dismissal is far more difficult to prove than employees often think.

First they must prove a fundamental (rather than minor) breach of contract by the employer.

The employee must also show that their decision to terminate their employment was in response to the breach and not, for example, because they had been offered a more attractive job.

A tribunal will usually expect an employee to have tried to resolve the complaint through the grievance procedure before jumping ship.

Employees frequently rely on off-the-record conversations as grounds for constructive dismissal. For example, if an employee was offered a pay-off as an alternative to a performance monitoring programme, but was told that they would fail the programme, the employer cannot assume that saying the offer was 'without prejudice' will help to keep the threat out of court.

Q Is constructive dismissal a claim which can be brought in the tribunal or court system?

A Constructive dismissal is not a claim in itself, but is a springboard to other claims such as wrongful dismissal and unfair dismissal.
Where discrimination occurs which does not involve dismissal, the compensation recoverable by the employee may be limited, but if they can link the discrimination to the termination of the employment, by asserting constructive dismissal, compensation may rise to reflect loss of earnings.

Q Why would an employee who already has another job assert constructive dismissal?

A Constructive dismissal occurs following a fundamental breach of contract by the employer, which cannot then rely on that contract in the future.
Therefore, if an employee can show that they have been constructively dismissed, they will not be bound by post-termination terms in the contract, such as restrictive covenants.

If an employee wants to avoid contractual restrictions - perhaps because they are joining a competitor - they might assert constructive dismissal.

Q How can I tell if an employee is preparing to assert constructive dismissal?

A Since the introduction of statutory grievance procedures, employees may not bring constructive unfair dismissal claims without first raising a grievance.

That grievance is sometimes raised after termination of employment, but may be raised immediately before asserting constructive dismissal. Other indications include: re-opening old complaints in an effort to 'refresh' old breaches of contract; uncharacteristically taking notes at meetings or confirming conversations by e-mail; or spelling out the reasons for resigning in a letter.

Q How can we head off constructive dismissal claims?

A The heart of any constructive dismissal claim is a breach of the duty of trust and confidence. Expressions of trust and confidence in the employee by the employer may assist (although a tribunal or court will recognise the difference between a cosmetic communication and one genuinely designed to reassure).

More importantly, constructive dismissal claims focus on a grievance and getting to the heart of the grievance is the key either to reassuring the employee or (if they are determined to leave) weakening any potential claim of constructive dismissal.