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Constructive
Dismissal

Constructive dismissal occurs when an employee resigns because of their employer’s serious breach of contract.

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What Is Constructive Dismissal?

Constructive dismissal is the term used where an employee resigns in response to their employer’s conduct in breach of an important term of their employment contract. If an employer’s conduct breaches a fundamental term of the employment contract, the employee may treat themselves as having been dismissed, even though they resigned.

This can involve either a breach of an express contractual term or a breach of an implied term, such as the duty of mutual trust and confidence between employer and employee. This is often referred to as a repudiatory breach. Examples include:

Fundamentally changing an employee’s duties or role without consent

Reducing pay or benefits unlawfully

Creating a hostile, unsafe, or intolerable working environment

Failing to address grievances or discrimination complaints

Breach of the implied term of mutual trust and confidence is often relied on by employees where the relationship between them and their employer has irrevocably broken down.

What Must Be Proven?

For a constructive dismissal claim to succeed, the employee must show that:

  • The employer committed a repudiatory breach of the employment contract;
  • The employee resigned in direct response to that breach;
  • The employee did not delay too long before resigning — otherwise, they may be seen as having accepted the conduct and “affirmed” the contract.

A single serious incident can be sufficient, but in many cases it’s the cumulative effect of repeated conduct that establishes the breach.

Tribunals may treat a pattern of behaviour as part of a continuing course of conduct, even if individual incidents were previously tolerated.

Compensation for Constructive Dismissal

If a tribunal finds that an employee was constructively dismissed, compensation can include:

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Breach of Contract

If you resign without giving notice, the tribunal will consider what loss you have suffered as a result of your employment contract terminating without notice. The compensation for that loss will be designed to put you in the financial position you would have been in had you been dismissed in accordance with your contract. This means that you would be entitled to your net pay and the value of any benefits that you would have received had you worked through your notice period.

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Unfair Dismissal

Compensation for unfair dismissal is usually only available to employees who have worked for their employer for at least two years.

The tribunal will consider whether your dismissal was fair or unfair and in doing so will look at a range of factors including the reason for your dismissal and whether your employer acted reasonably. In practice it will be very difficult for an employer to show that it acted reasonably if it has in fact breached a term of your employment contract, making it more likely that your dismissal will be judged unfair.

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Five Potentially Fair Reasons for Dismissal

Conduct

A single act of misconduct or repeated lesser acts.

Capability or Qualifications

Poor performance, ill health, or lack of qualification.

Redundancy

Business or workplace closure, or reduced staff need.

Statutory Illegality

Continuing employment would breach the law.

Some Other Substantial Reason (SOSR)

e.g. refusal to accept contractual changes, client pressure, or organisational restructuring.

Other Employment Law Advice

01

Unfair Dismissal

Unfair dismissal can be claimed by the employee if the employer had a fair reason but handled the dismissal using a wrong procedure.

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02

Disability Discrimination

Disability is one of the Protected Characteristics according to The Equality Act 2010

Get Discrimination Advice
03

Whistleblowing Protection

An employees report malpractice by their employers or third parties are protected from being victimised or suffering a dismissal as a result.

Get Whistleblower Advice
04

Mental Health Discrimination

You have to show that your mental health problem is a disability to get the protection of the Equality Act.

Get Mental Health Advice
05

Pregnancy Discrimination Rights

A pregnant woman is protected against being subjected to a detriment (at any time) for a reason connected to her pregnancy or statutory maternity leave.

Get Pregnancy Advice

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