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Constructive dismissal

What is constructive dismissal? (sometimes referred to as constructive unfair dismissal)

Constructive dismissal occurs where an employee considers it is necessary to leave their job ,against their will, because of their employer's conduct. Although there has been no actual dismissal, the treatment is sufficiently bad that the employee is entitled to regard themselves as having been dismissed (please refer to our guidelines on Unfair Dismissal).

Claims can often be difficult to prove but if successful can give rise to damages for wrongful dismissal. If an employee the required length of  service they are also entitled to claim unfair dismissal (please refer to our guidelines on Fixed Term Contracts for special provisions relating to FTCs of 26 weeks or less).

The Jersey Employment Tribunal set out the legal principles applicable to this area of employment law in the case of Carratu v United Fashions Limited (110/2011). In order to claim constructive unfair dismissal, four basic ingredients must be present:

  • The employer must be in breach of the contract of employment;
  • The breach must be fundamental i.e. a repudiatory breach;
  • The resignation must be a response to that breach; and
  • The employee must not delay too long in resigning following the breach. If he or she does then the tribunal may find that the breach has been waived.

Sometimes this will be breach of an express term of the contract of employment, such as the right to be paid a certain amount on a certain date. More commonly, it will be that the employer's behaviour destroys or seriously undermines the relationship of trust and confidence that should exist between employer and employee by, say isolating them or failing to deal with a grievance.

Q. How easy is it to show constructive dismissal?
A. Constructive dismissal is far more difficult to prove than employees often think.

First they must prove a fundamental (rather than minor) breach of contract by the employer.

The employee must also show that their decision to terminate their employment was in response to the breach and not, for example, because they had been offered a more attractive job.

A tribunal will usually expect an employee to have tried to resolve the complaint through the grievance procedure before resigning, the JACS model (for information) can be found here.

Employees frequently rely on off-the-record conversations as grounds for constructive dismissal. For example, if an employee was offered a pay-off as an alternative to a performance monitoring programme, but was told that they would fail the programme, the employer cannot assume that saying the offer was 'without prejudice' will necessarily help.

Q. Is constructive dismissal a claim which can be brought in the tribunal or court system?
A. Constructive dismissal is not a claim in itself, but is a springboard to other claims such as wrongful dismissal and unfair dismissal.

Q. Why would an employee who already has another job assert constructive dismissal?
A. Constructive dismissal occurs following a fundamental breach of contract by the employer and the employer cannot then rely on that contract in the future.

Therefore, if an employee can show that they have been constructively dismissed, they will not be bound by post-termination terms in the contract, such as restrictive covenants.

Q. How can an employer avoid constructive dismissal claims?
A. The heart of any constructive dismissal claim is a breach of the duty of trust and confidence by the employer. Expressions of trust and confidence in the employee by the employer may assist (although a tribunal or court will recognise the difference between a cosmetic communication and one genuinely designed to reassure).

More importantly, constructive dismissal claims focus on a grievance. Therefore a thorough and impartial investigation of the grievance is the key to reassuring the employee and lessening the likelihood of a successful claim of constructive dismissal.

March 2015
  

 

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