Having a former employee bring a claim for constructive dismissal can feel extremely personal and is a challenging event for any employer.
Unlike unfair dismissal which relates to the process and reason for the employee being let go, constructive dismissal is where a staff member feels they have to resign because of your actions. This usually means the employee claims you have committed a serious breach of the employment contract, and as such, the employee deems the contract has been terminated. This is known as a repudiatory breach.
Under UK employment law, constructive dismissal can also occur if the employee resigns because they have been subjected personally to a hostile work environment, meaning that there has been an implied breach of trust and confidence in the working relationship.
A constructive dismissal claim brought before an Employment Tribunal can be expensive, stressful, and damage your commercial brand. An experienced Employment Lawyer can advise and represent you in such circumstances; however, it is better to understand what constructive unfair dismissal (to give it its correct legal term) is, so you can avoid a claim being brought against you in the first place.
Here are three essential facts you need to know about constructive dismissal.
One - There are many situations that could lead an employee to have a constructive dismissal claim in employment law
The type of situation that could result in a constructive dismissal claim being argued in the Employment Tribunal include:
- the reduction or threatened reduction of wages or salary
- late payment of wages or salary
- demoting an employee without just cause
- making unfounded accusations of poor performance
- subjecting an employee to unfair disciplinary proceedings
- discriminatory or sexually inappropriate behaviour
- bullying and/or being made to work excessive hours or in unreasonable conditions
- a refusal to make reasonable adjustments for an employee with disabilities
A repudiatory breach can be made up of several breaches - the breach that the employee resigns on is deemed to be the ‘last straw’ breach.
An Employment Law Solicitor can keep you updated as to your compliance responsibilities under UK employment law and advise you of any changes that may affect how you operate your business. This will help prevent any unintentional breaches of an employee’s employment contract.
Two - The employee must state that in their belief, there has been a serious breach of their employment contract for constructive dismissal to occur
If an employee believes that a repudiatory breach has been committed, they must communicate that they accept this fact and resign promptly. There is a general principle that if the employee continues to work without complaint, they have accepted the breach and upheld their contract. Therefore, they will not be entitled to resign later and claim constructive dismissal.
There is no firm rule regarding how much time has to pass between the breach and resignation - it will depend on the facts of the case. A lawyer experienced in constructive unfair dismissal claims will be able to advise you.
Three - You can mitigate the risk of constructive unfair dismissal claims
The best way to avoid a constructive dismissal claim is to avoid committing a repudiatory breach of an employment contract or permitting actions that could be deemed as an implied breach of an employee’s trust and confidence.
Regarding the latter, it is vital to create a culture of employment law compliance, anti-discrimination and anti-bullying in your workplace. Don’t turn a blind eye to complaints and appoint an independent person or organisation that employees who feel bullied, victimised, harassed, or discriminated against can turn to in confidence. Furthermore, have well documented, modern (refresh regularly) policies and procedures in place to deal with any allegations and follow them to the letter. Ensure these are communicated to employees and all documentation is easily accessible to all employees.
Regarding breaching an employment contract - it is recognised that SMEs occasionally need to change employment contracts and Ts&Cs in order to operate effectively. To protect yourself against a constructive dismissal claim, ensure you take advice from an Employment Solicitor as to the method used to make the changes and the need and extent to which employees need to be consulted.
Final words
Most SME owners will confess that dealing with employees is the toughest part of running a business. When it comes to challenges such as unfair dismissal, wrongful dismissal, and constructive dismissal claims, it is worth working with an Employment Lawyer, who understands your business is that you get to learn faster and without having to make costly mistakes.
Questions?
Your employees' efforts can make or break your business. So you want to make sure that you've protected your position with that employee, whether they succeed or fail.
Employment legislation changes all the time, so you need to make sure you are up to date in the way you approach these issues. Our expert employment lawyers can help with the legal advice you need;
