A Constructive Dismissal is a situation where a resignation is treated as if the employee were dismissed by the employer. A claim for Unfair Dismissal would usually follow, as there is unlikely to be a fair reason to terminate employment and/or it is unlikely that a fair procedure took place. Most claims for Unfair Dismissal require 2 years’ continuous service but there are exceptions, including when the reason for dismissal is related to pregnancy or leave for family reasons, whistleblowing, asserting a statutory right or health and safety. A Constructive Dismissal might also lead to a claim for Discrimination.
If you resigned because of something your employer did (or did not do), our employment lawyers can advise on the prospects of a successful claim for Constructive Dismissal and either seek to negotiate a settlement with your employer or represent you in an Employment Tribunal claim.
Our constructive dismissal lawyers can also advise employees who are considering their position. Our employment lawyers can help draft a Grievance or your resignation letter, or simply advise what your likely position would be if you did decide to resign.
We know that money will be tight if you have been forced to resign without a job to go to. We therefore offer no win no fee agreements to bring Employment Tribunal claims in suitable cases and also identify whether you might be able to use existing legal expenses insurance to pay your legal fees.
Our employment lawyers are based in our London office but can also see you at our Watford Office.
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FAQs about Constructive Dismissal
Who can claim Constructive Dismissal?
Any employee with 2 years’ service can claim Constructive Unfair Dismissal. Employees with less than 2 years’ service can still claim Constructive Dismissal, but their claim would be limited to payment for their notice period unless they also had a claim for Discrimination. Constructive Unfair Dismissal for an automatically unfair reason, such as because of pregnancy or leave for family reasons, health and safety or whistleblowing, has no qualifying period.
What are common reasons for Constructive Dismissal?
Constructive Dismissal can be claimed following a resignation in response to any fundamental breach of a Contract of Employment. Commonly, this relates to the implied term of mutual trust and confidence. Constructive Dismissal claims often relate to overwork or bullying causing stress at work, reductions in status by undermining employees, taking away responsibilities or outright demotion, or even something as fundamental as a pay cut. Discrimination claims often include claims for Constructive Dismissal as discriminatory conduct is often a fundamental breach of contract.
Can I claim Constructive Dismissal after working my notice?
It is a common misconception that an employee who has worked their notice cannot claim Constructive Dismissal. Working notice may be a relevant factor in determining whether the alleged breach of contract was so fundamental as to destroy mutual trust and confidence but there is nothing to prevent an employee who has worked notice bringing a claim for Constructive Dismissal, particularly where some or all of that notice is spent away from the workplace on sick leave, garden leave or holiday.
Can I claim Constructive Dismissal without raising a Grievance?
Failing to raise a Grievance can affect the amount of compensation payable but there is nothing to prevent a Constructive Dismissal claim where the employee has not raised a Grievance. It might however be difficult to bring a Constructive Dismissal claim where the employee has a dispute with a particular manager but hasn’t given the employer the opportunity to intervene in that dispute: it could be said that the mutual trust and confidence between employer (as opposed to manager) and employee was not destroyed. Conversely, the way senior management react in Grievance Procedures can add to an allegation that there is no longer any trust and confidence between employee and employer.
How much compensation is available for Constructive Dismissal?
Constructive Dismissal is compensated in the same way as Unfair Dismissal:
1) A Basic Award, calculated in the following way:
- For complete years worked aged 41 and over 1½ weeks’ pay
- For complete years worked aged 22-41 1 week’s pay
- For complete years worked aged under 22 ½ week’s pay
A week’s pay is subject to a statutory maximum, currently £508. A maximum of 20 years’ service is counted. As the calculation is the same as statutory redundancy pay, the easiest way to work out a Basic Award is to use the online calculator on gov.uk.
2) A Compensatory Award, which compensates the employee for any financial loss. This is usually loss of earnings but might also include the costs of looking for work or setting up a new business. A payment is also made for loss of statutory rights. There is a statutory cap on the Compensatory Award of one year’s salary or £83,682, whichever is lower (except in health and safety or whistleblowing cases).
I want to claim Constructive Dismissal. When should I resign?
The timing of a resignation can be very important in a claim for Constructive Dismissal. If there is a large gap between the event(s) complained of and the date you resign, you could be found to have “waived” any breach of contract. Alternatively, if you bring a Grievance and then resign before your employer has had opportunity to investigate and report back, that could also impact your right to claim. Successful Constructive Dismissal claims usually involve a resignation that is close in time to the event(s) complained of, a “final straw” or the outcome of a Grievance Procedure.