‘Constructive dismissal’ is a misleading name for the concept it defines. There is no actual dismissal by the employer, yet the employee is entitled to consider themselves as being dismissed. The heart of the matter is the employer’s conduct.
What is constructive dismissal?
It occurs when an employee resigns from their employment in response to the actions of their employee. For a claim of constructive dismissal to succeed, the employee must show that their employer fundamentally breached their contract of employment and that they resigned in response to it. Waiting too long to resign may impede the employee’s success.
What kind of breaches are we talking about?
There are several ways that an employee could claim that a term of their employment has been fundamentally breached:
- Arbitrarily reducing pay;
- Demotion to a lesser role for no reason;
- Making it impossible for the employee to do the job e.g. providing equipment that is not up to standard;
- Failing to take measures to protect the employee against discrimination or harassment at work;
- Changing a fundamental term of employment without involving the employee;
- Not taking measures to prevent serious harm or injury involved in a role.
A recent example
The High Court recently found that Nigel Gibbs, former Assistant Manager at Leeds United Football Club, had been constructively dismissed. Gibbs had been brought to the Club by Brian McDermott when McDermott was appointed as Manager because they had worked together in the past. When McDermott left the club in 2014 Gibbs was kept on but was not included on an overseas pre-season training as he had expected. He was told he could “do some cleaning”. He was told to work with junior players at the club; not invited to staff meetings and not provided with new kit nor training schedules. The Court found that this did not meet contractual expectations and so Gibbs had been entitled to resign and consider himself dismissed.
How to avoid constructive dismissal claims
- Take complaints seriously; ensure your grievance procedure is used if an employee raises a grievance. Be particularly careful when a complaint of bullying, harassment or other treatment which could compromise health and safety is made;
- Where you have procedures setting expectations of your actions, make sure you follow them;
- If contractual changes are needed, involve the employees and tell them why the change is required. Try to get their agreement;
- Ensure employees have sufficient equipment and support to do their job.
Employees often claim that their employer ‘just wants me out’ and use language such as ‘witch hunt’ when an employer begins to make decisions about the employee which negatively impact them. This frequently comes up when an employer initiates a capability or disciplinary procedure against an employee. Provided your procedures are consistently applied, there will be no room for an employee to complain that they are experiencing anything but the normal management system.
If relationships are faltering where you find that the employee just doesn’t fit into the organisation anymore, settlement agreements are useful to end employment in a mutually satisfactory way.