When is a contractual change constructive dismissal?
Constructive dismissal is where an employee resigns and shows they were forced to do so by the conduct of their employer. An employee may only bring a claim for constructive dismissal if they have a qualifying period of service of two years’ continuous employment. The steps leading to a constructive dismissal claim are:
1. The employer commits a ‘repudiatory breach’ of the contract of employment (ie the employee feels that they have no choice but to leave)
2. The employee resigns in response to this breach. The resignation may be with or without notice.
3. The employee does not delay in resigning.
With constructive dismissal the employee resigns in response to the alleged breach which must be so serious that it justifies the employee resigning. Examples include:
• Unilateral changes to the employee’s contract; for example, pay cut or demotion.
• Changes to the employee’s working hours.
• Change of the employee’s working location.
• Changes to the employee’s duties: many constructive dismissal cases are brought on the basis that the employer made unreasonable demands of the employee.
• Subjecting the employee to unlawful discrimination to the extent that the employee-employer relationship breaks down.
To be effective for constructive dismissal claims, the employee’s resignation letter should unequivocally set out the reasons for their resignation. If it doesn’t, the employee will find it difficult to prove later that it was solely down to the repudiatory breach.
Constructive dismissal claims are technically difficult to win, but employers should take them seriously.