Constructive Dismissal

To establish a case of constructive dismissal the employee must

show that his employer committed a fundamental breach of a term of

the employee's contract of employment. The breach must be

sufficiently serious, for instance, the employer refusing to pay

the employee, or forcing that employee to accept fundamental

changes to the terms of his employment contract, e.g. requiring

that he relocates. Alternatively, the breach could be the last in a

series of incidents which justifies the employee leaving. In this

scenario, it will not matter that each of the separate incidents

may not themselves amount to significant breaches of contract. What

will matter is that when they are taken together, they must

cumulatively amount to a fundamental breach of contract.

Once the breach has been committed, if the employee accepts the

breach and chooses to leave the company as a result, this could

amount to a constructive dismissal. However, employees would be

advised to first raise a formal grievance through the appropriate

channels, as failure to do so could have serious consequences on

any claim the employee might have.

If an employee does wish to accept the breach and leave, he

should do so within a reasonable time, this is so that the employee

cannot be said to be affirming the contract, or waiving the breach.

From the employee's perspective, the fact that he must resign

may prove impractical, as he may then be forced to fund his

employment claim with little or no income. The employee will also

have a duty to mitigate his loss by looking for a new job.

Post-departure, the contract will be treated as terminated. For

this reason, employees who can successfully make a case that there

has been a constructive dismissal may have a claim for wrongful

dismissal and possibly also unfair dismissal, depending on the

circumstances. From an employer's perspective, the fact that

the contract is treated as terminated can mean that the terms of

the contract are no longer enforceable, and importantly, it may not

be able to rely on post-termination restrictions, such as the

ability to ensure that senior members of staff do not compete with

the business for a period of time post-termination.

Overview of Constructive Dismissal

The relevant points to consider when considering if there has

been a constructive dismissal were set out in the 2002 case of

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