Constructive dismissal

By Tolley in partnership with Emilie Bennetts at Charles Russell Speechlys LLP
Employment_tax_img6

The following Employment Tax guidance note by Tolley in partnership with Emilie Bennetts at Charles Russell Speechlys LLP provides comprehensive and up to date tax information covering:

  • Constructive dismissal
  • Employer's conduct
  • Repeated minor breaches of contract
  • Employee must accept the breach and resign in response
  • Employee must act quickly

Note: all case references in this guidance note are subscription sensitive.

A constructive dismissal will occur in a situation where the employee resigns because a sufficiently serious breach of the contract by the employer entitles them to leave without giving notice. The employee may bring a claim for unfair dismissal (if he has the requisite length of service) even though he chose to end the contract by resigning. The resignation is considered a dismissal because it occurred in circumstances in which the employer's breach of contract made it almost impossible for the employee to stay at work. Western Excavating (ECC) Ltd v Sharp [1978] 1 All ER 713

Employer's conduct

The employer's breach of contract must be very serious. It must be shown that the employer has breached a fundamental express or implied term of the employee's contract. It is not sufficient that the employer has behaved unreasonably; the behaviour must be so serious that the employee is justified in resigning.

Employees will often allege a breach of the implied term of trust and confidence, which is a fundamental term of every contract. In such cases, to show that there has been a fundamental breach of contract capable of supporting a claim of constructive dismissal, the employee must show that the employer has, without reasonable and proper cause, conducted himself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between them.

The following elements are needed to establish a case of constructive dismissal:

    More on Dismissal: