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If you feel that you have been forced to resign from work due to unfair treatment by your employer, then you may have a claim for constructive dismissal in an Employment Tribunal.
Constructive dismissal is a complicated area, but in situations where the employer is willing to engage, it enables you as an employee to negotiate a decent settlement agreement without the need to go to court.
What is constructive dismissal?
Constructive dismissal is a type of unfair dismissal, the difference being that in constructive dismissal the employee feels forced to resign, rather than being formally dismissed by their employer.
Anything that involves making your working life so difficult to bear that you feel you have no option but to leave could constitute constructive dismissal.
Generally, an employee who resigns will have no claim for wrongful dismissal because it was them and not the employer who terminated the contract of employment. However, if your employer has breached a ‘fundamental’ term of your contract of employment and you resign in response to that breach, then you may have a claim of constructive unfair dismissal.
What would be a fundamental breach?
It is extremely difficult to succeed in winning a claim of constructive dismissal in an Employment Tribunal as it is not sufficient that your employer acted ‘unreasonably’. This is because judges believe that only extreme circumstances could make someone leave their employment.
Another difficulty is if the judge deems an employee to have accepted the employer’s misconduct by leaving it too late to resign as by doing so you accepted the mistreatment.
Therefore in order to bring a claim, there should be evidence that your employer acted in a manner that destroyed the employment relationship and that usually entails a breach in the terms of the employment contract, thus enabling you to resign with immediate effect.
A contract of employment may include both express and implied contractual terms.
Express terms are set out in writing or can be by verbal agreement, whereas Implied terms are those implied by law, even if not set out in writing or by verbal agreement.
Many successful constructive dismissal claims are brought on the basis that an implied term of the contract has been breached by the employer, such as:
- Duty to take reasonable care of employees health and safety
- Duty of mutual trust and confidence
- Duty not to treat an employee in an arbitrary, capricious or inequitable manner
If you believe that your employer has fundamentally breached your contract of employment, then you must act quickly, because if you stay in your employment following the incident upon which you intend to rely upon, then it is highly likely that your employer will argue that you accepted the treatment and breach by not acting immediately and therefore the resignation will not amount to constructive dismissal.
Who can bring a claim for constructive unfair dismissal?
You can bring a claim for constructive unfair dismissal in the employment tribunal if you satisfy the following:
- As with unfair dismissal, you will need to have been an employee and employed by the same employer for at least two years in order to bring a claim.
- You resigned soon after and in response to a fundamental breach of your contract of employment by your employer
Unfortunately, before the two years service, it is very easy for your employer to dismiss you or constructively dismiss you with no legal consequence, even if it feels blatantly unfair.
There are some exceptions where 2 years of continuous employment is not needed in order to bring a claim for constructive unfair dismissal, such as:
- Whistleblowing, where you have revealed some sort of malpractice and you have been victimised for doing so
- Discrimination on grounds of age, sex, race, disability, pregnancy sexual orientation or other types
- Breach of Contract of Employment
How to start a case for constructive dismissal compensation
The employee needs to make the first move, as your employer may not be aware of the situation, or if they are, they probably won’t have a protected conversation with you. They will probably try to keep the situation calm and hope that with the passage of time any claim you may have will fade away.
Employers do try to ‘manage out’ employees by disciplining on trivial matters, or implementing performance reviews, so that they may avoid having to pay out with a settlement agreement. This is an underhand tactic that is commonly used by employers to avoid their responsibilities to their employees and the difficulty is in proving it, as the employer will argue that the employee resigned of their own accord and that no dismissal took place. You must always think carefully before resigning from your employment as it is a difficult decision that only you, and no-one else, can make.
A without prejudice letter will need to be put together which sets out the fundamental breaches of contract, be it one big breach or a series of separate breaches that together make a breach of trust and confidence. You are trying to prove that your employer has breached your contract to the extent that they have effectively dismissed you so the letter must set this out clearly with reference to any evidence that you may have collected.
Negotiating settlement in constructive dismissal cases
Technically, you have the right to sue for constructive dismissal once you have resigned. However, in your without prejudice letter you will be telling your employer that you have a case for constructive dismissal and should they not resolve it now to your satisfaction, then you will resign and sue them.
If your employer calls your bluff and refuses to engage, then you will have to either return to work or resign. Therefore it is essential that you time your letter right to coincide with the worst breach of contract, or at the end of a series of breaches. You also cannot leave it too long after the last breach of contract to write to your employer, or to resign.
Timing your action
In a case where your employer has committed a sole and fundamental breach of contract, for example, they have failed to pay you in the terms of the contract, then you should act as soon as possible, as you have the fundamental breach and there is no merit in waiting before commencing negotiations.
In a situation where there have been lots of minor breaches together adding up to a fundamental breach of trust and confidence, you have to use your judgment more. You will not have a potential claim after the first minor breach; therefore we advise that once there is a pattern of minor breaches that when taken together appear to be serious, that is the time to start negotiating for a decent payout.
If you think more breaches will be committed by your employer then wait in order to strengthen your claim, but it is advisable that you wait no more than two months from the last incident before starting negotiations.
After three months there is a risk that if you have not resigned, a judge could decide that you have accepted the behaviour and you could lose any case you brought, which means that your negotiating position has been weakened from the start.
How much should I be getting for my constructive dismissal settlement?
This depends on the circumstances, but the compensation for successful constructive dismissal claims is worked out in the same way as compensation for unfair dismissal. It is essentially the amount of money you lost due to being out of work after you had to leave the job. There is a cap of one year’s salary or £86,444 whichever is lower.
You will need to provide records of your efforts to find another job since leaving.
Try our settlement calculator to get an idea of what you should be looking to recover.
What should I do next?
If you feel that you have a claim for constructive dismissal please complete the enquiry form or call us on 0161 249 5087 and we will be happy to discuss your options and settlement options and/or guide you through the process of making a constructive dismissal claim.
We appreciate that this is often a difficult time and we offer a range of funding options to assist you.
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Use the contact form and or call us on 0845 555 0606 and our award winning legal team will contact you to find out how Versus Law can help you.