Constructive Dismissal in the UK

Establishing constructive dismissal can be challenging. The employee generally needs to show three things: that the employer committed a fundamental breach of contract (or a series of acts that cumulatively amount to one), that they resigned in response to that breach, and that they did not delay too long before resigning (as delay may be taken as affirmation of the contract). The most commonly relied-upon term is the implied term of mutual trust and confidence, which requires that neither party acts in a way that is calculated or likely to destroy or seriously damage the relationship of trust and confidence. Examples that have been found to breach this term include failing to address grievances, imposing unreasonable changes to working conditions, bullying or harassment, and significant unilateral changes to pay or duties.

Common situations include: an employer significantly reducing pay or changing job duties without agreement, persistent bullying or harassment that the employer fails to address, being demoted without justification, an employer failing to investigate or respond to a formal grievance, being given an impossible workload designed to force resignation, and having working conditions changed to the point where the role becomes fundamentally different from what was agreed.

Constructive dismissal is covered by sections 95(1)(c) and 98 of the Employment Rights Act 1996. Section 95(1)(c) provides that an employee is treated as dismissed if they terminate the contract, with or without notice, in circumstances where they are entitled to do so by reason of the employer’s conduct. To claim ordinary unfair constructive dismissal, two years’ continuous service is generally required under s.108 ERA 1996. The ACAS Code of Practice on Disciplinary and Grievance Procedures is relevant, as failure to follow it may be taken into account by a tribunal. The leading case on the implied term of mutual trust and confidence is Malik v Bank of Credit and Commerce International SA [1998].

People considering whether they may have a constructive dismissal claim often think about whether to raise a formal grievance before resigning, as this can demonstrate that they gave the employer an opportunity to address the issue. Some explore seeking legal advice before resigning, as once the resignation takes effect it cannot easily be reversed. Others consider whether early conciliation through ACAS might resolve matters without the need to resign. It is worth being aware that succeeding in a constructive dismissal claim at tribunal can be difficult, and each case turns on its specific facts.

Common mistakes include: resigning in the heat of the moment without gathering evidence first, waiting too long to resign after the breach (which may be seen as accepting the situation), not raising a formal grievance before resigning, failing to clearly state in the resignation letter that the resignation is due to the employer’s conduct, and not seeking legal advice before taking the irreversible step of resigning.