Constructive dismissal occurs when an employee resigns his or her post in circumstances where the employer is in serious or fundamental breach of contract. This can be in relation to a one off event i.e. where the employer suddenly announces without any warning or consultation, substantial changes to an employee’s contract of employment like a unilateral pay cut, removal of company car, reductions in pension contributions, withdrawal of private benefits such as health care and the like.
Alternatively, it can be a series of events that eventually lead to a tipping point being reached where the employee is unable to carry on working for the employer. These could be intimidatory emails or behaviour by an employer or a manager and very unpleasant work place conditions denigrating or oppressive conduct. These cases can be quite challenging. The decision to resign and complain of constructive dismissal is not a decision to be taken lightly. The employee usually requires two years continuous service before being eligible to bring a constructive unfair dismissal claim. There are however exceptions to this rule and employers are sometimes liable even when an employee doesn’t have 2 years service.
If an employee is successful in the bringing of a claim for constructive unfair dismissal then he/she could recover a basic award which is based on age, length of service and earnings, together with compensation for loss of earnings subject to a one year cap or £78,336 whichever is the lower.
Employees that face these difficulties would be wise to seek some legal advice before resigning and Davies and Partners' specialist employment law team of expert lawyers would be pleased to give employees such advice. Contact us here.