Louise Maynard delivers a great overview of Constructive and Unfair Dismissal

There are strict time limits to adhere to. The time limit to bring a claim for constructive unfair dismissal expires three months less one day from the last date of employment.

In most cases, an employee should raise a grievance with their employer whilst reserving their legal rights to bring a claim for constructive unfair dismissal, and preferably before resigning.

The employee resigns without notice, such a claim will be for notice pay. Where the employee has at least two years’ service, the employee can claim constructive unfair dismissal.

Constructive dismissal refers to a situation in which an employee resigns in response to their employer’s conduct. In this situation, the employer has created such an intolerable working environment, either through a single serious event or a series of smaller events, that the employee has no option but to resign.

No employee should bring a claim of constructive dismissal lightly. Claiming constructive unfair dismissal in the employment tribunal can involve complex legal issues. We set out some points to bear in mind before embarking on such a claim. Litigation in the employment tribunal In order to recover compensation from their employer, an ex-employer is likely to need to pursue a claim in the employment tribunal. While compensation can be recovered in the employment tribunal if a claim is successful, constructive dismissal is a difficult type of case to win. If an individual fails to convince the employment tribunal that they were constructively dismissed by their employer, they will not receive any compensation and will still have to pay legal fees. An employee must resign from their job before they can bring a claim of constructive dismissal. This means they will immediately stop receiving salary and benefits from their employer and it may be a substantial period of time before they receive any compensation. Litigation is stressful and can take a long time, there is never any absolute guarantee that a claimant will win their case at an employment tribunal. Have I been constructively dismissed? Ultimately, only an employment tribunal can decide if an individual has been constructively dismissed. A tribunal will be looking at whether the employee resigned in response to a very serious breach of contract by the employer (sometimes referred to as a repudiatory breach). This is behaviour by the employer which is so bad, it entitles the employee to resign and leave employment. The difficulty comes in deciding whether or not the employer’s conduct amounts to a breach of contract or if is just unreasonable (which would not be enough to establish a constructive dismissal claim). A good rule of thumb can be to ask: are matters at work are so intolerable that I feel that I can no longer carry on working here and have no choice but to resign? What is a repudiatory breach? A repudiatory breach is a very serious breach. It must be more than just unreasonable behaviour by the employer and must be a breach of an express term of your employment contract (e.g. in relation to pay, benefits or seniority) or, more commonly, the implied term of trust and confidence. It can be very difficult to draw a line between what is merely unreasonable behaviour and what amounts to an actual breach of contract; ultimately only an employment tribunal can decide on this issue. Trust and confidence is extremely wide in scope; there is an almost limitless amount of ways in which an employer can breach this term. It could for example, relate to the way in which an employer has dealt with a workplace matter such as a complaint of bullying and harassment. Whether or not there has been a repudiatory breach is something that an employment tribunal will ultimately decide based on the facts of each case. It is advisable to ask yourself whether your employer has made your position untenable or, whether it is simply intolerable for you to be in the working environment as a result of their actions (or lack of action). Where an employment tribunal decides that the employer has not committed a fundamental breach of contract (whether an express or implied term) then a claim of constructive dismissal will fail. It will come down to whether an employment tribunal thinks the employer’s conduct (or its effect) is serious enough to amount to a breach. Examples of contract breaches The sorts of breaches of contract which might implore an employee to resign and therefore found a constructive dismissal claim include: a significant reduction in salary (or threatened reduction) without your agreement removal of a contractual benefit without your agreement reduction in seniority for no good reason completely changing the nature of your job unreasonable performance management (e.g. imposing unrealistic targets) disciplinary proceedings which are obviously unfounded seriously undermining your authority (e.g. disciplining you in front of junior colleagues) failing to observe health and safety laws regularly requiring you to work excessive hours which affects your health harassment or bullying failing to address legitimate concerns you have raised about your workplace/working conditions rejecting a flexible working request for no legitimate reason Claiming constructive dismissal It is important that you make it clear that you are resigning because of your employer’s conduct towards you and not for some other reason (e.g. you have another job or are relocating). It is also important that you do not delay too long between becoming aware of your employer’s serious breach of contract and actually resigning. There may be a legitimate need to hold off from resigning in some circumstances such as where you are waiting to hear the outcome of a relevant grievance. It is advisable to make your employer aware that you are reserving your rights or working under protest so that they do not form the impression that you are accepting (or “waiving”) their bad behaviour. Practical considerations of claiming constructive dismissal In constructive dismissal claims, the onus is on the claimant (ex-employee) to show that there was a repudiatory breach of contract by their employer that prompted their resignation. This will involve producing evidence of the employer’s behaviour so make sure you keep relevant documents, emails and letters which may assist your case. It is advised that you keep a diary of events, conversations and developments as well as putting together a timeline of what happened when. At the very least keep a note of all relevant conversations. You should also consider who you might usefully ask to give evidence to support your case. For example, colleagues who heard or witnessed any relevant events or conversations. Can I work my notice? Provided your notice period is not too long then working notice after tendering your resignation, is not necessarily a bar to successfully claiming constructive dismissal. However, we would suggest that this should be a matter of weeks rather than months. For example, a six months’ notice period would certainly be too long. This is because, given the nature of the claim (essentially you will be arguing that you could not bear to be employed any longer due to your employer’s behaviour), it will usually be more appropriate to resign with immediate effect. However, there are obviously negative financial implications of this for most employees. Must I lodge a grievance before I resign? There is no rule which says you MUST lodge a grievance before your resignation and claim constructive dismissal. However, it is usual for people to do so and there may be consequences for the amount of compensation which is recovered in the employment tribunal if you don’t resign promptly (potentially a reduction of 25%). Conversely, an employee will not normally be prejudiced if they raise a grievance and delay in resigning until the employer’s response (assuming the grievance is rejected) is known. However, in these circumstances the employee should make it clear that they object to the actions about which they complain and are continuing to work under protest in the period while they wait for the employer to deal with their grievance. Once the employer’s decision is known an employee must make their decision promptly -although what period of time is reasonable will depend upon the facts of each case. Alternatives to claiming constructive dismissal Employees who have not been employed for two years or more will not usually be able to bring an unfair dismissal claim in the employment tribunal (subject to exceptions such as in cases involving whistleblowing or discrimination). However, in such cases, it may be possible to bring a wrongful dismissal claim for the value of salary and benefits during what would have been their notice period.  Important disclaimer This article is no substitute for professional advice about your particular circumstances. We would strongly recommend any individual who is considering resigning in order to claim constructive dismissal to take specific legal advice (without delay) before resigning from their employment. While we always strive to ensure our content is as accurate as possible, Springhouse accepts no responsibility for any loss caused as a result of reliance on this article.

A Polkey deduction is a deduction made from a compensatory award in an unfair dismissal case to reflect the chance that although a dismissal was procedurally unfair it would have happened in any case. A claim for unfair dismissal may succeed on the grounds that the employer failed to follow a fair procedure in every respect. However, in such a case it will still be possible for an employer to argue that even if a fair process had been observed, the employee would still have been dismissed. This can lead to any award for compensation being reduced – a ‘Polkey’ reduction – based on the tribunal’s view of the likelihood of dismissal occurring. The actual reduction is a matter for the discretion of the employment tribunal and can range from nil to 100%. This principle was set out in the case of Polkey v AE Dayton Services Ltd [1987].

You may have heard the phrase “constructive dismissal” but, do you really know what it means? What does constructive dismissal involve and what are the legal implications when someone makes a claim for constructive dismissal? It’s a notoriously complicated area but we attempt to provide some clarity for both individuals and employers with our quick guide to the basics of constructive dismissal. What is “constructive dismissal”? In a nutshell, constructive dismissal is a forced dismissal. However, the word “dismissal” is perhaps misleading as it is not a dismissal in the ordinary sense of an employer terminating an employee’s employment contract but, it requires the employee to resign, in response to a breach of contract by their employer. In summary, it occurs where an employer treats a member of staff so badly that the employment relationship is irretrievably broken and they are entitled to resign and treat themselves as having been constructively dismissed. The employee must jump first… The onus is on the employee to decide if they are going to resign. This is clearly a difficult decision as they will potentially be left without any income for a significant amount of time before their claim can be decided by a tribunal or a settlement can be agreed. In addition, it is for the employee to prove that their employer’s behaviour was so seriously detrimental that it amounted to a breach of contract, which entitled them to resign. It is not always easy, even for a lawyer, to be certain beforehand about whether a tribunal or court would rule in the employee’s favour. Thus the decision to resign should not be taken lightly or, ideally, before legal advice has been obtained. Constructive dismissal can be unfair dismissal Constructive dismissal is the label applied to the claim which is based on a breach of contract by the employer. Generally such claims are heard by the civil courts. However, if the employee satisfies the eligibility requirements, they can bring a claim of unfair dismissal as a result of being constructively dismissed. This is likely to be more advantageous in terms of costs as it is free to bring a claim in the employment tribunal but, not in the civil courts, where an application fee must be paid. The eligibility requirements are: two years’ service as an employee working under a contract of employment and the claim must be brought within three months of resigning. The compensation limit which applies in unfair dismissal cases will apply (generally, one year’s salary or, the cap, whichever is lower). It’s a high hurdle for an employee to jump… In order to show that someone has been constructively dismissed, certain legal requirements must be met: Firstly, the employer must have seriously breached the employment contract in some way. This is often labelled as a “repudiatory” breach of contract. Minor breaches by an employer will not suffice. It must be something very serious in the context of the employment relationship. An example might be reducing pay or demoting an employee without agreement. Generally in constructive dismissal cases the employee will argue that it is the implied term of trust confidence which the employer has broken. There are no restrictions on how an employer might do this, an example might be speaking harshly to a member of staff in front of a customer. Secondly, the employee must resign in response to this breach of contract, not for any other reason, and must do so without unreasonable delay. Finally, the employee must not have done anything which indicates that they accept the breach by the employer, for example, carrying on working without stating they are doing so under protest and accepting pay for that work. If an individual effectively goes along with the situation without any complaint for a period of time, they may not be able to bring a claim for constructive dismissal. In these cases a tribunal may say that they have “let bygones be bygones” or, in more technical language, that they have waived the breach, or affirmed the contract in its new form. And finally, don’t forget the “last straw” rule Although one-off acts are usually the cause of constructive dismissal claims, a build-up of a number of more minor breaches by the employer can amount to a fundamental breach of contract (which entitles the employee to resign and claim constructive dismissal). In these cases, none of the individual actions needs to be so serious that it amounts to a repudiatory breach in itself, but a catalogue of more minor actions can be so that the final, minor act is said to be “the last straw” which drives the employee to resign . A tribunal will look at the facts as a whole. How can we help you? If you think you may have a constructive dismissal claim or need help formulating your claim to the employment tribunal, then talk to our employment law specialists today. We’ll help you figure out the best way forward for you.

Notice, once given, cannot generally be withdrawn unless the other party consents. There have been numerous cases dealing with the issue of a disputed resignation over the years but, the general rule remains. Individuals should therefore be absolutely sure of the effect they want to achieve before giving notice of their choice to resign as they are unlikely to be able to retract it. The notice clause All employment contracts should contain a notice clause setting out what both the employer and employee have to do to terminate employment. Specifically, the clause will set out how much notice must be given by one party to the other (weeks or months). Usually, the clause will say that notice has to be given in writing but, this is not always the case – occasionally it may be permissible to give it orally. It is however, always advisable to give notice in writing (and make sure it is dated) to avoid any dispute later on. Does an employer have to accept a resignation? Employers may talk about “accepting” someone’s choice to resign but, this is misleading. As long as the employee is doing what the notice clause in the contract requires i.e. giving it in the form and duration specified, an employer cannot stop someone resigning. While they may try their best to urge someone to reconsider – so that both parties then agree the notice will not be operative – an employer cannot force someone to carry on working against their will if they have indicated they want to leave. Are there any exceptions to withdrawing a resignation? While the general rule is that notice cannot be unilaterally withdrawn, the party receiving the notice needs to satisfy themselves that the giver of the notice really did intend to give notice of resignation (or dismissal). In cases involving oral notice, did the employee really mean what they apparently said? Usually there will be no doubt whatsoever but, in appropriate cases, the recipient of the notice should allow the giver a “cooling off” period before acting on the notice to resign. Where words may have been said in the heat of the moment, this limited exception to the rule enables the giver of the notice to convince the recipient that their mind was not in tune with their words, allowing them to retract. Can refusing to accept a withdrawn notice count as unfair dismissal? Although the general rule is that the employee and employer must both agree in order for a notice to be successfully withdrawn, this rule is subject to exception in the right circumstances, as a recent case demonstrates. In 2018, the Employment Appeal Tribunal (EAT) upheld a claim that an employee was unfairly dismissed after she attempted to retract her resignation, but this was denied by her employer. In East Kent Hospitals University NHS Foundation Trust v Levy , Mrs Levy had worked in the hospital’s records department for around 10 years. Following difficulties with another colleague she successfully applied for a new role in the radiology department in order to resign from her current role. She submitted a letter to her manager which stated: “Please accept one month’s notice from the above date”. In response, her manager replied, “Thank you for your letter … in which you tendered your notice of resignation. It is with sincere regret and disappointment that I accept your notice of resignation. I can confirm that your last day of work within Health Records will be Friday 8 [July] 2016.” On 16 June, the job offer in the radiology department was withdrawn. This was “unofficially” due to her sick leave record. Mrs Levy tried to retract her notice but, following advice from the HR department, her manager refused to accept that request and wrote to her again confirming the date of her last day of employment, essentially forcing her to resign. Mrs Levy brought a claim of unfair dismissal and an employment tribunal (ET) ruled in her favour. T he ET considered that the words used in Mrs Levy’s letter were not unambiguous and could have been either a notice of intended transfer or a notice of termination. The ET concluded that the letter would lead a reasonable observer to agree that the claimant was not terminating her employment, but rather notifying her manager of her intention to accept the offer. It therefore upheld Mrs Levy’s claim that she had been unfairly dismissed when her employer insisted on holding her to her notice, so that her employment was treated as terminating. This case turned very much on its own facts and a similar case might be decided differently by another tribunal. However, it serves to demonstrate that unless there is absolute clarity in an employee’s resignation i.e. that they are clearly signalling their intention for their employment to terminate, an employer risks a claim of unfair dismissal , especially where the employee subsequently seeks to retract their notice.  An employer should always make sure it understands why the employee has decided to resign, the notice they are giving (and whether this is subject to any conditions) and agree exactly when the employment will end.