You Are Fired! What You Need To Know About Constructive Dismissal

"You're fired!" is an exclamation popularly associated to a situation whereby an employer informs his or her employee of the employee's dismissal or termination from the company. Of course, knowing that you have been dismissed is never a good feeling and you may feel lost. However, your employer may feel the same way too as they will be put in an unpleasant situation when breaking such news to you. Hence, it is not uncommon for an employer to persuade someone into resigning rather than having to utter the words "you're fired".

Hypothetically, in what ways can your employer force you to quit? The most common answer is by making your life at your work place so miserable that you feel compelled to quit; for example, shifting your location of employment, changing your job scope, demoting you or reducing your monthly salary.

Therefore, not all "resignations" are made free willed, hence the question, was your resignation voluntary or was it forced?

The law in this aspect is clear: it is not the form or manner but whether or not there had been "just cause" or "excuse". It is crucial to bear in mind that if your employment contract is terminated without just cause or excuse, a legal cause of action may arise in your favour.

The law governing unfair or unjust termination of employment is known as the doctrine of constructive dismissal. The doctrine of constructive dismissal deals with situations whereby the unjust conduct of the employer has caused the employee to initiate the termination of their own contract of employment as opposed to the employer expressly terminating the contract of employment.

So, in what situation can your resignation from employment be considered a constructive dismissal? Before venturing an answer, know that fundamentally, your relationship with your employer is a contractual one. Therefore, it is the employment contract that will govern both your conducts at work.

Hence, your resignation from employment may amount to a constructive dismissal if your employer breaches a condition in your employment contract.

The English Court of Appeal in the case of Western Excavating (ECC) Ltd v Sharp [1978] 1 ALL ER 713, CA [ENG] laid down the test in a situation whereby a voluntary resignation may amount to a constructive dismissal. Based on the judgment in Sharp's case, the main factors in establishing constructive dismissal are as follows:

1. The employer no longer intends to be bound by one or more of the essential term(s) of the...