Polski Dzial Many people are familiar with the term ‘Unfair Dismissal’ when it comes to their employment or, more specifically, the termination of their employment. There is, however, another type of claim of a similar nature which employers and employees alike should also be cognisant of – ‘Constructive Dismissal’.
Constructive Dismissal claims are not as commonplace as Unfair Dismissal claims, and it can be hard to bring a successful Constructive Dismissal claim. There are important requirements which must be met. This article will look at what a Constructive Dismissal is, and what requirements must be met, before considering the key differences between a Constructive Dismissal claim and an Unfair Dismissal claim.
What is a Constructive Dismissal claim?
A Constructive Dismissal claim is a claim brought by an employee against their former employer if they were forced to resign because the working relationship became untenable. The legal definition of Constructive Dismissal is found in Section 95(1)(c) of the Employment Rights Act 1996, and is as follows:
“(1) For the purposes of this Part an employee is dismissed by his employer if (and, subject to subsection (2) only if)
(c) The employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer’s conduct.”
A Constructive Dismissal claim is comprised of three elements:
- The employer’s conduct. The employer’s conduct must constitute a fundamental or repudiatory breach of the employment contract between the employer and the employee. This is examined in more detail in the paragraph below.
- The employee’s entitlement to resign in light of the breach.
- The employee’s action in light of the breach.
The most important element in a Constructive Dismissal claim is the employer’s actions. The employer’s actions must cause the employee to terminate their employment. The employer’s conduct must be of such a serious nature that it breaches the terms of the employment contract between the parties. It can be a breach of either an express or an implied term. The breach is often referred to as a fundamental, or repudiatory, breach. The employer’s actions must cause the employee to be left with no alternative but to terminate their employment.
The final action by the employer (also known as the last straw) which causes the employee to terminate their employment, does not have to be the most serious breach of their employment contract. In the case of Omilaju v Waltham Forest London Borough Council [2005] ICR 481 EWCA, the Court of Appeal considered the last straw test.
What happens if my employer breaches my employment contract but I do not resign?
If an employer’s conduct constitutes a fundamental or repudiatory breach of an employee’s contract of employment, the employee has two choices. The first is to resign, and the second is to accept the breach. If an employee accepts the breach, they will not have a valid Constructive Dismissal claim. An employee must resign in order to bring a Constructive Dismissal claim. The breach, in and of itself, is not enough to constitute a claim.
An employee should look to resign as quickly as possible after the breach if they wish to bring a Constructive Dismissal claim. Although there is no rule which sets out a specific length of time in which an employee must resign, an Employment Tribunal will consider whether any delay by an employee indicates either an express or implied acceptance of the breach.
What if I give notice to my employer?
Working your notice period does not automatically mean you are not entitled to bring a Constructive Dismissal claim. However, the key element of a Constructive Dismissal claim is that the employer’s conduct must be so serious that it makes an employee’s employment untenable. Furthermore, an employee should be aware that previous case law has determined if your notice period is at least 6 months, and you choose to work a notice period of this length, it can be viewed as affirming your employment contract.
What is the difference between a Constructive Dismissal claim and an Unfair Dismissal claim?
There is one key difference between a Constructive Dismissal claim and an Unfair Dismissal claim. In a Constructive Dismissal claim, an employee must have resigned from their employment because the situation became untenable. By contrast, in an Unfair Dismissal claim, an employee must have been dismissed by their employer.
What compensation can I obtain from a successful Constructive Dismissal claim?
The compensation for a Constructive Dismissal claim is the same as an Unfair Dismissal claim. An employee can claim for reinstatement/reengagement and financial compensation should they be successful in their claim. Financial compensation is split into a Basic Award and a Compensatory Award. A Basic Award is calculated based on an employee’s age at the date of their employment terminating, length of service and gross weekly pay. A Compensatory Award is comprised of any additional sums that an employee has lost as a result of losing their job. This can include notice pay (if an employee did not work their notice or receive pay in lieu of notice), pension contributions, wage loss and any other benefits an employee received.
If you have any questions regarding a potential Constructive Dismissal claim, please call our office on 0141 471 9257 or email shona.christie@dallasmcmillan.co.uk