Constructive dismissal

Overview

Constructive dismissal is defined in section 95(1) Employment Rights Act 1996. It is where you resign with or without notice, because of a fundamental or repudiatory breach of the employment contract by your Employer. The breach can be a breach of a written term of your contract or a breach of an implied term, and must be so serious that you had no other option but to resign.  If you are the one who commits a repudiatory breach, your Employer is entitled to summarily dismiss you.  If you are constructively dismissed, your claim would be for normal unfair dismissal in the Employment Tribunal, and carries the same basic and compensatory award.  Generally, you must have two years’ service to claim constructive dismissal.

Resources Available

Disciplinary action and capability

Discrimination at work

Surviving a workplace suspension

How to fight dismissal on Probation

How to survive a criminal charge, conviction or caution at work

Social Media and Unfair Dismissal

Surviving a disciplinary investigation at work

Surviving Capability and Performance Management

The Disciplinary Hearing

Alcohol and Drugs at work

How to prepare a schedule of loss for unfair dismissal

DOCUMENTS, FORMS AND LETTER TEMPLATES

 

Constructive Dismissal Flow Chart

To prove a constructive unfair dismissal, you must show the employment tribunal that your employer breached the employment contract, that it was a significant breach which was fundamental to the contract and that you ended your employment because of that breach and did not delay in resigning. Download the flowchart in order to access the links in the Resources column – CONSTRUCTIVE DISMISSAL FLOWCHART

 

CONSTRUCTIVE DISMISSAL FLOWCHART

www.employeerescue.co.uk

 

Proving constructive dismissal

In constructive dismissal you can point to a breach of a specific term as amounting to a repudiatory breach of contract. A single breach can be enough if it is sufficiently serious.

You can also rely on a series of breaches, where each breach taken on its own may not be significant, but taken together they are a fundamental breach. This is known as the “last straw doctrine” London Borough of Waltham Forest v Omilaju [2004].

Extremely bad behaviour can also breach the implied duty of mutual trust and confidence. You must be very clear on what term of the employment contract that your Employer has breached, and whether the term was fundamental to the employment relationship. Changes to contracts and demotions will be fundamental breaches.

In Malik v Bank of Credit and Commerce International SA [1997], the House of Lords said that you can rely on a single event or a series of events as giving rise to the implied contractual duty that your Employer would not do anything calculated to destroy or damage the relationship of mutual trust and confidence.

Western Excavating (ECC) Ltd v Sharp [1978] is the leading case on constructive dismissal, and sets out the requirements for a good constructive dismissal claim.

In this case, Mr. Sharp asked for three hours off work one afternoon which was refused so he went anyway. Western Excavating dismissed him the next day. The dismissal was revoked on review and replaced with 5 days’ unpaid suspension.

Mr. Sharp asked for an advance on his holiday pay and for a loan. Both requests were refused and he resigned claiming constructive dismissal.

He lost his constructive dismissal claim because the Court said that there had not been a breach of the employment contract.

The Court of Appeal said that in order to claim constructive dismissal, an Employee must establish the following;

  1. That there was a fundamental breach of contract on the part of the Employer;
  2. That the Employer’s breach caused the Employee to resign;
  3. That the Employee did not delay too long before resigning, thus affirming the contract and losing the right to claim constructive dismissal.

This means that your Employer must actually have broken the terms of the contract. It is not enough if your Employer simply acted unreasonably.

If your Employer gives you an unreasonable instruction which is allowed under the terms of your employment contract, then there is no breach of contract and so no constructive dismissal.

 

Affirmation or waiver of the breach

Once you are certain that your Employer has committed a breach, you must resign pretty sharply because the Employment Tribunal might interpret any delay as evidence that you have accepted your Employer’s conduct. This is called “affirmation” or “waiver” of the breach.

In Hadji v St Luke’s Plymouth [2012], St Luke’s were in breach of contract which entitled Mrs. Hadji to resign. The last breach by St Luke’s was in February, by which time Mrs. Hadji was off work with stress.

A month later at a workplace meeting she was given three options – to return to her existing role, to consider other vacancies within St Luke’s or to resign. She did not decide between these options until the end of May when she wrote that she was starting a stress control course, hoping that this would make a difference and asking for details of internal vacancies. She then changed her mind and resigned on 8 June.

The Employment Tribunal said that Mrs. Hadji had affirmed the breach of the contract of employment. She appealed to the Employment Appeal Tribunal that the passage of time alone between the last breach of contract and her resignation would not, in law, amount to affirmation.

Mrs. Hadji said that the communications between her and St. Luke’s before she resigned did not support the Employment Tribunal’s conclusion that she had affirmed the breach. The Employment Appeal Tribunal did not agree with her. The Court said that she had indeed affirmed the breach and her appeal was dismissed.

The Employment Appeal Tribunal said that the essential principles of affirmation are that;

  1. The Employee must make up his or her mind whether or not to resign soon after the conduct complained of. An Employee who does not resign may be regarded as having elected to affirm the contract or as having lost the right to claim constructive dismissal – Western Excavating v Sharp [1978]  and Cantor Fitzgerald International v Bird [2002]
  2. A delay which is not accompanied by express or implied affirmation of the breach is not enough to constitute affirmation; but it is open to the Employment Tribunal to infer implied affirmation from a prolonged delay. In W E Cox Toner (International) Ltd. v Crook [1981],Browne-Wilkinson P said: ‘However, if the innocent party further performs the contract to a limited extent but at the same time makes it clear that he is reserving his rights to accept the repudiation or is only continuing so as to allow the guilty party to remedy the breach, such further performance does not prejudice his right subsequently to accept the repudiation.’

This means that you would not be affirming the breach if you give your Employer an opportunity to remedy the breach through the grievance procedure.

  1. If the Employee calls on the Employer to perform its obligations under the contract or otherwise indicates an intention to continue the contract, the Employment Tribunal may conclude that there has been affirmation – Fereday v South Staffordshire NHS Primary Care Trust [2010]
  2. There is no fixed time limit in which the Employee must make up his mind; the issue of affirmation is one which, subject to these principles, the Employment Tribunal must decide on the facts; affirmation cases are fact sensitive – – Fereday v South Staffordshire NHS Primary Care Trust [2010]

See How to write a grievance about changes to your employment contract

 

Best of the web 

Constructive Dismissal – TUC WorkSmart

Unfair and Constructive Dismissal

Claiming constructive dismissal in the Employment Tribunal

 

Disclaimer

This resource is published by Employee Rescue Limited. Please note that the information and any commentary on the law contained herein is provided for information purposes only. The information and commentary does not, and is not intended to, amount to legal advice. Employee Rescue accepts no responsibility for any loss occasioned to any person acting or refraining from action as a result of the material contained in this publication.

Further specialist advice should be taken before relying on the contents of this publication. You can send an e-mail to thelawyers@employeerescue.co.uk for such specialist advice if required.
 

 

Case Study

In the Scottish case of Collins v First Quench Retailing Ltd [2003], Ms Jacqueline Collins was awarded £179,000 from her employers when the off-license she managed was robbed. Ms Collins had been the manager of Victoria Wine, run by First Quench Retailing, for about ten years. When Mrs Collins started in the shop she had been concerned about security and raised this with management. Since 1977 there had been 13 reported crimes at the shop, including five thefts, one minor assault, one serious assault and one assault with intent to rob. There were two armed robberies in 1994 and four... Read More
Ms Jacqueline Collins was awarded £179,000 from her employers when the off-license she managed was robbed.Collins v First Quench Retailing Ltd
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