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 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.
If these preventative measures do not work and an employee resigns, your organisation may have a defence against a constructive dismissal claim. There may be circumstances in which the employee waited too long before resigning and implicitly accepted your organisation's actions by failing to act sooner. You may also be able to show that the employee really resigned for a reason unrelated to the alleged breach of contract - this could be the case where the employee resigns in response to a job offer elsewhere, but brings a constructive dismissal claim as an afterthought.
Stephen Simpson, principal employment law editor
Updated to reflect the maximum compensatory award for unfair dismissal, effective from 6 April 2018.
In Agoreyo v London Borough of Lambeth  EWHC 2019 HC, the High Court held that a teacher was constructively dismissed when she resigned in response to a knee-jerk suspension. In the circumstances of the case, the suspension had been a breach of the implied term of mutual trust and confidence entitling the employee to resign without notice.
The Employment Appeal Tribunal (EAT) has held that the employer acted in breach of the implied term to maintain trust and confidence by giving a misleading reason for the employee's dismissal.
In this week's podcast, we demystify the concept of constructive dismissal.
The High Court has held that the suspension of a teacher was a "knee-jerk" reaction and in breach of the implied term of trust and confidence between the employer and employee.
In this podcast, XpertHR consultant editor Darren Newman looks at Western Excavating v Sharp, which defined "constructive dismissal" and led the courts and tribunals to develop the implied term of mutual trust and confidence.
In Lenlyn UK Ltd v Kular EAT/0108/16, the EAT held that an employer's offer to an employee of a settlement agreement did not constitute a "protected conversation" because the employer had acted improperly in all the circumstances, and in doing so had also breached trust and confidence.
Updated to include information on Royal Surrey County NHS Foundation Trust v Drzymala, in which the EAT confirmed that the fairness of a dismissal is not necessarily affected by compliance with the Fixed-term Employees Regulations.
The Employment Appeal Tribunal (EAT) has held that the circumstances surrounding a protected conversation made dismissal appear a foregone conclusion and amounted to a fundamental breach of contract.
In Novakovic v Tesco Stores Ltd EAT/0315/15, the EAT held that the employment tribunal failed to consider all relevant evidence when finding that the employee had affirmed the employer's repudiatory breach of contract.
HR and legal information and guidance relating to constructive dismissal.