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Constructive dismissal: Correct test is based on law of contract

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    Western Excavating (ECC) Ltd v Sharp [1978] IRLR 27 CA (0 other reports)

The correct test for whether an employee is entitled to claim constructive dismissal is one based on the law of contract. The employer's conduct which forced the employee to resign must be viewed in accordance with common law and not simply on the basis of its unreasonableness. But behaviour which amounts to "gross misconduct" by the employer is likely to allow an employee successfully to claim constructive dismissal.

After months of conflicting decisions, this seems the likely practical result of the Court of Appeal's decision setting out the correct interpretation of when an employee is entitled to resign without notice by reason of his employer's conduct and be treated as dismissed in law. In Western Excavating (ECC) Ltd v Sharp, the Court of Appeal lays down the rule that in order to be able to resign and claim constructive dismissal within the meaning of para.