Definition
A situation where an employee resigns because their employer has fundamentally breached the employment contract, making it impossible for them to continue working. The employee treats themselves as having been dismissed, even though the employer did not formally terminate the employment.
UK Context
To succeed in a constructive dismissal claim at tribunal, the employee must show there was a fundamental breach of contract, they resigned in response to the breach, and they did not delay too long in resigning. Common examples include significant pay cuts without agreement or persistent bullying.
Best Practices
- Take all employee grievances seriously and investigate them promptly to avoid allegations of breach
- Never unilaterally change fundamental contract terms without the employee's agreement
- Monitor management behaviour to ensure it does not create a hostile or intolerable working environment
Frequently Asked Questions
What counts as a fundamental breach of contract?
Examples include a significant pay cut without agreement, a demotion, persistent bullying or harassment, a serious health and safety failure, or undermining the mutual trust and confidence that underpins the employment relationship.
Does the employee need two years' service to claim constructive dismissal?
To claim constructive unfair dismissal, yes, the employee generally needs two years of continuous service. However, they may be able to bring a wrongful dismissal or discrimination claim without the two-year requirement.