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Constructive Dismissal

In order for an employee to have a claim for Constructive Unfair

Dismissal the employee must first have more than 1 year’s complete

service up to the date of termination of the Employment Contract.

If this employment commenced before 6th April 2012. This extends

to 2 years if this employment started on or after 6th April 2012.


In simple terms this means the date when the resignation takes

effect.  The employee must resign because of the conduct of the

employer towards him.  The conduct must amount to a fundamental

breach of contract.  The fundamental breach can be either by an

express breach of contract or by way of breach of the implied term of mutual trust and confidence.  

If the employee resigns he must resign without delay, or he may be deemed to have accepted the breach of contract.


There is one other way an employee can resign and claim constructive unfair dismissal:  this is when there was a previous fundamental breach of contract and the employee does not resign at the time, but there is another breach of contract that causes the employee to resign because it is the “last straw”.


So what does this mean?

Let me give you an example:  Fred the Warehouse Manager for 10 years has been under-performing at work.  His employer, Toddles Ltd, call him into an office and tells him that he is going to be demoted to the role of Warehouse Supervisor and this will be effective immediately.


There has been no proper procedure followed.  He has not been given any prior warnings about performance or been through a disciplinary process.


If he resigned he would have a claim for constructive dismissal because demotion is a fundamental breach of contract.  The failure to follow a reasonable procedure could also amount to a breach of the implied term of mutual trust and confidence.  Fred, however, decides to see how it goes, and he puts up with the new job for 3 months.


At this point if he resigned because of the demotion he would have a problem because he has delayed and it will be argued that he has accepted the demotion.  But if after 3 months, Toddles Ltd decides not to pay Fred’s Contractual Bonus, and he resigns because of this, he could argue what we call the “last straw principle”.  In this situation the last straw does’nt have to be a fundamental breach of contract and Fred could raise the previous demotion as part of his claim for constructive dismissal.


Some examples of fundamental breaches of contract include:

· Non-payment of contractual benefits such as wages:  this means non-payment , not late payments;

· Physical abuse and verbal abuse that is not within the norm or the working environment;

· Demotion outside the disciplinary process;

· Being unfairly disciplined without due cause and with no fair investigation;

· Being told to resign or they will face disciplinary action;

· Not being provided meaningful work; and

· Being unfairly criticised and undermined in front of colleagues.


In conclusion, the key point in such circumstances is to raise your complaints in writing by way of a grievance complaint and set out what you say is unacceptable conduct amounting to a fundamental breach of contract.  You should do so as soon as possible after the breach has occurred or is threatened to occur.  


It is vital that if you are contemplating resigning that you obtain legal advice before doing so, so that you can get help drafting letters and be advised as to whether you have such a claim.