Question

What is constructive dismissal?

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Answer

Resigning in response to a fundamental breach of contract by the employer, and being treated in law as having been dismissed — which is why it is described as constructive: the dismissal is constructed from the employer's conduct rather than from any act of dismissal.

What must be established. The test has several elements, all of which must be satisfied:

A breach of contract by the employer that is fundamental — going to the root of the contract. Commonly relied on is the implied term of trust and confidence, breached where the employer behaves in a way calculated or likely to destroy or seriously damage the relationship, without reasonable and proper cause.

The employee resigned in response to that breach, not for some other reason.

The employee did not delay in resigning. Continuing to work may be treated as affirming the contract — accepting the breach and waiving the right to rely on it. This is the requirement that defeats most claims, and it creates a genuinely cruel dilemma: resign quickly with no income, or stay and risk losing the claim.

Examples that have been found to qualify: unilateral significant reduction in pay or status; a fundamental change to duties or location without contractual authority; failing to address serious bullying or harassment after it is raised; a serious failure to provide a safe working environment; and a persistent pattern of smaller acts culminating in a last straw — which need not itself be serious if it forms part of a cumulative breach.

What is generally not enough: reasonable management decisions you dislike; a single instance of unfairness that does not go to the root; and performance management conducted properly.

Why claims are difficult:

The burden is on the employee to prove the breach.

Resigning first means losing income while pursuing the claim.

It must usually be unfair dismissal too, requiring qualifying service unless the reason is automatically unfair.

Raising a grievance first is normally expected, and failing to can reduce compensation.

Success rates are low relative to other claims.

Time limits are short — generally three months less one day from the effective date of termination, with ACAS early conciliation required first.

General information, not legal advice — take advice before resigning.

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