What You Need to Know About Constructive Dismissal

by Human Resources Published on: 13 February 2019 Last Updated on: 18 March 2020

“Having to dismiss a member of staff is never a comfortable experience, but refining your approach and knowing your rights and responsibilities helps to keep you and your company out of hot water”

Dismissing staff:

When dismissing a staff member there will be procedures to follow in line with your company’s protocol. This might say, for example, that you have to give two verbal warnings followed by a final written warning before you can dismiss anyone. Not adhering to these protocols is just one reason why an ex-employee could start a claim for compensation against you and/or your company for wrongful or unfair dismissal.

For an employee to begin a case for wrongful dismissal you have to have caused a breach in contract, such as terminating their contract without giving them the agreed notice period.

It is important to know that wrongful dismissal differs from unfair dismissal: where the former requires a contractual breach to have taken place, the latter can be claimed by an ex-employee only if a statutory right of theirs has been breached. A statutory right is, for example, being paid national minimum wage or going on maternity leave.

Constructive dismissal:

Constructive dismissal is significantly different from wrongful dismissal and unfair dismissal because it does not involve you as the employer dismissing a member of staff. Instead, if an employee makes a claim for constructive dismissal, they are accusing you of giving them no other option than to resign.

An ex-employee could make a claim for constructive dismissal if they

  • Are demoted without reason
  • Have their working hours reduced significantly for no good reason
  • Are refused company benefits
  • Are repeatedly paid less than they should be
  • Are given duties unreasonably outside of their contractual agreement
  • Are not listened to in regard to complaints or grievances they have raised

When employees can claim:

In order for a member of staff to successfully claim for constructive dismissal, there are certain steps they should take before contacting an employment law solicitor.

Firstly, the employee must no longer be working for you. If an employee threatens you with a constructive dismissal claim whilst they are still working for you then rest assured, they will not be successful. By remaining in the company, they are wanting to claim against, the employee is ‘affirming the breach’, or accepting the “new” terms of their employment.

Therefore, employees can only claim for constructive dismissal if they resign pretty quickly after the event or final straw which makes them feel as if they have no other choice.

What employees should do before the resignation:

Although it is not compulsory, it is advisable that if an employee feels uncomfortable in their job, they should raise a grievance as soon as possible and document that they have done so.

If a member of staff follows company grievance protocol and still feels backed into a corner, before resigning they should – although don’t have to – draft up a resignation letter clearly outlining the reason for them leaving. This allows them to have evidence to provide to the employment tribunal but also will alert you of problems within the workplace regarding how grievances are dealt with.

Knowing if your employee is eligible:

An ex-employee making a claim against you – or even just threatening to do so – will likely set off alarm bells, but there is always the chance that they aren’t actually eligible to make a claim.

Unless you or someone in your company has been harassing or discriminatory towards the employee (let’s hope not!) then they have to have been working at the company for a minimum of two years prior to starting their constructive dismissal claim. They also need to initiate their claim within three months of their resignation.

If an ex-employee is threatening you with legal action or has initiated a constructive dismissal claim, your first port of call should be to get the advice of a legal professional. The worst thing you can do for yourself and your company is getting into a dispute with the employee without first reviewing what has happened and understand what is likely to follow.

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Ariana Smith is a blogger who loves to write about anything that is related to business and marketing, She also has interest in entrepreneurship & Digital marketing world including social media & advertising.

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