How to Undergo Constructive Dismissal For Your Employees


The definition of dismissal includes the situation in which an employee is entitled to walk out of his job, without giving notice (whether or not he actually gives notice), because of his employer’s conduct. This is known as constructive dismissal, and entitles the employee to claim that he has been unfairly dis­missed.

The history of this type of dismissal has had a fairly chequered career in the courts over the last 10 years. Initially, tribunals were inclined to think that an employee had been construc­tively dismissed if his employer had behaved unreasonably, but in a landmark case (Western Excavating [ECC] v Sharp [1978]) it was decided that constructive dismissal could only occur when employer was in breach of an important term of an employee’s contract.

It is, then, fairly obvious that, if an employer decides to re­duce wages, change the hours of work or change an employee’s job, the employee has the right to leave and claim constructive (unfair) dismissal. Even if a written contract of employment does not exist, employers will still know the main terms and conditions of the employment, and can avoid falling into the trap of discovering that, in law, they have dismissed someone without any intention of doing so.

However, the situation is not as clear as it may seem. Since the Western Excavating decision in 1978, industrial tribunals and the appeal courts have gone some way towards reintroducing the ‘reasonable’ test, by saying that it does not have to be a breach of one of the express – and obvious – terms of the con­tract to justify a constructive dismissal claim. Common law, which is judge-made and, in general, predates the introduction of statute law, implies various terms in employment contracts. These include:

1. A duty to maintain the contract, which means that employ­ers must not act in such a way as to destroy the ‘mutual trust and confidence’ which must exist between employer and employee.

2. A duty of care, so that they must not disregard the health, safety and welfare at work of their employees.

3. The duty to provide work: even when an employer has a contractual right to lay off his workforce when there is a shortage of work, a lay-off which goes on for too long can re­sult in a successful constructive dismissal claim.

It is useful to remember that an express term in a contract (in essence, a term contained in a written statement given to an employee at the outset of his employment) cannot normally be overridden by an implied term. For instance, an employee without any written contract and whose terms of em­ployment have always been vague, cannot suddenly be ex­pected to uproot himself from Scotland and move to the West Country. However, if he had been given a written statement of the terms and conditions of his employment when he first started, which included the requirement that he work in any part of Great Britain, he could not claim that he had been con­structively dismissed when such a move was necessary, no matter how difficult that move may be for him. His employer would merely be expecting him to work in accordance with the con­tract of employment.

This point serves to emphasise the fact that it is in the em­ployer’s interest to set out conditions of employment in writing and to ensure that a copy is sent to new recruits along with the job offer. There can then be no disagreement in the future as to what conditions the employee is accepting.

If an employee does leave and makes a constructive dismissal claim, the procedure at the industrial tribunal is somewhat dif­ferent from that in the ordinary unfair dismissal cases. The first point that has to be considered by the tribunal is whether or not there has been a dismissal, and there the burden of proof lies on the employee. However, even if he does convince the tri­bunal that his employer’s behaviour amounted to constructive dismissal, all is not necessarily lost: it is still open to the em­ployer to show that the dismissal was fair.

In order to take advantage of this second chance, though, it is essential to go through the correct motions in the early stages of the employee’s claim. When the employee has sent in his com­plaint to a tribunal, a copy of his form is sent to the employer, together with a form for him to complete (an IT3). One of the questions on this form asks whether the employee was dis­missed. In a constructive dismissal claim, this question should always be answered in the following terms: ‘No – however, if in law there was a dismissal it was fair because . . .’

This means that if the employer had good reason for his actions and went through a fair procedure (for example, con­sulted with the employee about the change and took account of the employee’s views before making his decision, and had good grounds for making the change), the dismissal may well be fair.

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About the Author: Vanessa Page works a career counselor in one of the leading firms in Los Angeles. She is also a blogger and gives tips on how people can tackle their work and career issues. She has 8 years of experience in this field.

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