Constructive dismissal is when you are forced to leave your job against your will because of your employer’s conduct. Under UK law, it is defined as an employer creating a work environment so hostile that the employee had no choice but to resign.
Examples of such conduct include but are not limited to:
- Dramatic changes to duties, working hours or location (beyond reasonable daily travelling distance); or a complete change in the nature of the job.
- Reducing pay unfairly, stopping pay all together, or where wages are persistently delayed.
- Demotion without good reason.
- Failure to prevent bullying or harassment by other employees of the company or clients.
- Bullying in the form of lack of support e.g. forcing you to do two people’s jobs, being singled out for no pay rise, criticised in front of subordinates. Complaints about colleagues, clients or the work environment are ignored by the employer.
- Persistent unwanted amorous advances.
- Not properly addressing stress at work, and the employer refusing to look for an alternative role for the employee due to this workplace stress.
- Failure to notify a woman on maternity leave of a vacancy which she would have applied for if she had been made aware of it.
- Failure to make reasonable adjustments for a disability.
- Failure to provide the normal employment standards like overtime pay, vacation pay, etc. This also includes the refusal of holidays.
- Conduct that undermines trust and confidence i.e. offering an incentive to resign to avoid performance managing capability.
- Forcing an employee to work in a toxic environment. This is defined as unjustified criticism as well as vague and unfounded accusations of poor performance, especially where authority and respect with co-workers had been seriously undermined and compromised.
A resignation under these circumstances is seen as not truly voluntary, therefore even though someone may physically hand in their resignation with a forced smile, by law they are being unlawfully dismissed. This is because to them it is not possible to continue working under the current conditions. This can both be based on one particular incident or a series of incidents which is especially important when considering bullying and/or harassment in the workplace.
What to do first:
In the first instance, you should always try to sort any issues out by speaking to your employer to solve the dispute. If there is a formal grievance procedure you might want to follow that, or speak to your line manager or failing that, HR.
If your company has neither a grievance procedure, something like a staff handbook or an HR department, there is still help out there. ACAS is a UK advisory service that provides information, support and other services for employers and employees to help prevent or resolve workplace problems. You can find some advice for people who feel they have been constructively dismissed here.
What to do now:
It is important to note that if you feel like you have grounds for a case of constructive dismissal you should leave your job immediately. An employer can argue that by staying you accepted the work conditions or the way you were treated. However once the “trigger” or “last straw” is reached it is somewhat reasonable to allow for an employee to continue working while he or she finds a new job. The employee is also entitled to give notice if they prefer, so that they can enjoy the benefit of wages during the notice period.
This “last straw” does not have to be similar to the earlier string of events or even unreasonable or blameworthy. It need only be related to the obligation of trust and confidence and enough that when added to the earlier events the totality is a repudiation (Omilaju v Waltham Forest London Borough Council ).
A court can even look beyond the stated reason given by the employee at the time of resignation where these are different to what is being claimed now. An employee is able to claim that a cover story was in fact a resignation caused by a fundamental breach of contract (Weathersfield Ltd v Sargent ).
To prove constructive dismissal it needs to be shown that the employer committed a serious breach of contract, and that the employee felt forced to leave because of that breach. There can be no suggestion that the employee accepted the change in working conditions or the breach of contract, which makes claims for constructive dismissal notoriously difficult to prove.
However if a claim is successful, this can give rise to damages for wrongful dismissal and where the employee has been with the employer for over 12 months, they can also make a claim for unfair dismissal.
Is there a time limit for claims?
As per Landlau Law Solicitors:
“The process for claiming constructive dismissal should commence within a period of 3 months less 1 day from the date that you have left employment. This is usually the last date that you were paid. “
How much will this cost me?
In July 2017 the Supreme Court declared Employment Tribunal fees unlawful, which means that it is now free to make a claim to the Employment Tribunal or the Employment Appeals Tribunal.
What is the impact on restrictive covenants?
Where an employee can successfully show that they have been constructively dismissed, they can be released from the normal restrictive covenants in employment contracts that normally block you from working for competitors or returning to the same client site as well as contacting these clients. This is because the very nature of a constructive dismissal claim means that there has been a fundamental breach of contract by your employer, who cannot then rely on that contract in the future.
However it is important to note that there is no automatic right to ignore restrictive covenants just because a claim for constructive dismissal is being made. This needs to be decided by an employment tribunal first. It would be advisable to seek legal advice before potentially being in breach of contract.
What are my next steps?
Before a claim can be lodged with an Employment Tribunal, Acas must be notified first and this can be done through Early Conciliation. According to their website these will be the next steps:
“An independent, impartial Acas Conciliator will attempt to help both parties to resolve their differences. Whilst these discussions are taking place the time limit for making a tribunal claim is extended. The Early Conciliation period can be up to a month initially, and can be shorter or up to 14 days longer according to need.”
Why raise a claim?
Making a claim for constructive dismissal for breach of contract or unfair working conditions is not just a positive action to set right a wrong that was committed against one person. It forces the employer to publicly take responsibility for something they did and encourages better working conditions for those still working for the company. It can set a legal precedent for a particular industry and reduce unfair working conditions for hundreds or even thousands of other workers.
In addition, compensation for a successful case can help with lost income following on from the involuntary resignation. The upper limit for compensation claims for constructive dismissal is £25,0000 (at tribunal) and for unfair dismissal it is £74,200. With regards to an award of compensation, the employee’s conduct is irrelevant to liability, although it can affect how much is paid out in compensation for a successful claim. (see also: What compensation would I receive in a Constructive Dismissal claim?)
The Acas helpline number is 0300 123 1100. It is available Monday to Friday 8am-6pm. All advice is impartial, confidential and free.