Editor's message: Under unfair dismissal laws, an employee is entitled to resign in response to a fundamental breach of the contract of employment by his or her employer. This means that, although the employer has not dismissed the employee, the termination of the employment contract is treated as a dismissal.
You should be alert to the common breaches of contractual terms, both express and implied, that can lead employees to resign and argue that you have constructively dismissed them. A common example of a fundamental breach of an express term is unilaterally cutting an employee's pay or hours without the contractual power to do so. A breach of the implied term of trust and confidence could occur if you fail to investigate a grievance properly or turn a blind eye to allegations of bullying and harassment.
The best way to minimise the risk of constructive dismissal claims against your organisation is to have procedures that prevent fundamental breaches from occurring in the first place. These include a process for varying employees' terms and conditions; a grievance procedure; and a dignity at work policy. Under these procedures, you should consult properly with employees on significant variations to their terms and conditions; follow a fair and timely procedure when an employee raises a grievance; and fully investigate allegations of bullying and harassment.
Stephen Simpson, principal employment law editor
Updated to reflect the maximum compensatory award for unfair dismissal, effective from 6 April 2020.
In MacLean v Menzies Distribution Ltd, an employment tribunal found that the employer's public "dressing-down" of an employee via email entitled the employee to resign and successfully claim constructive dismissal.
Consultant editor Darren Newman considers if an employer can ever be successful in claiming that a constructive dismissal is fair in the light of two recent cases lost by employers.
In Retirement Security Ltd v Wilson, the Employment Appeal Tribunal held that the employer's "flawed" disciplinary investigation entitled the claimant to resign and successfully claim constructive dismissal.
In Ward v Fiducia Comprehensive Financial Planning Ltd, an employment tribunal upheld a claim for constructive unfair dismissal, finding that the employer had put inappropriate and excessive pressure on the employee to agree to an extended restrictive covenant following his resignation.
In Stolk v Hunts Foodservice Ltd and another, an employment tribunal awarded the claimant £11,028 after finding that pre-termination negotiations were admissible as evidence of pregnancy and maternity discrimination.
In Upton-Hansen Architects Ltd v Gyftaki, the Employment Appeal Tribunal upheld the tribunal decision that the employee's suspension was in breach of the implied term of trust and confidence. The employee was constructively dismissed and, in the absence of a potentially fair reason, the dismissal was unfair.
In Governing Body of Tywyn Primary School v Aplin, the Employment Appeal Tribunal (EAT) upheld a headteacher's constructive dismissal and sexual orientation discrimination claims after his school mishandled disciplinary action over his lawful sexual activities with two 17-year-olds he met through Grindr.
Although a recent Court of Appeal decision concerning suspension in relation to safeguarding concerns provides an element of reassurance for employers, consultant editor Darren Newman explains why suspension should still be used only sparingly.
In London Borough of Lambeth v Agoreyo, the Court of Appeal held that the proper test for the courts for deciding if an employee's suspension breached the implied term of trust and confidence is whether or not the employer's decision to suspend was a "reasonable and proper" response to the allegations.
HR and legal information and guidance relating to constructive dismissal.