Constructive Dismissal
Constructive dismissal occurs when an employee resigns because the employer has committed a fundamental breach of the employment contract. The employee must show the breach was serious, they resigned because of it, and they did not delay too long before resigning.
Last updated: February 2025
2 years (standard)
Qualifying service
3 months less 1 day
Tribunal time limit
Required first
ACAS early conciliation
What the Law Says
Under s.95(1)(c) of the Employment Rights Act 1996, an employee is treated as dismissed if they terminate the contract (with or without notice) due to the employer's conduct. The employer's breach must be sufficiently serious to amount to a repudiation of the contract. The implied term of mutual trust and confidence (Malik v BCCI 1997) is most commonly relied upon.
Your Obligations as an Employer
- Maintain the implied term of mutual trust and confidence
- Address grievances promptly and fairly
- Avoid unilateral changes to key contract terms without agreement
- Investigate and resolve workplace issues before they escalate
What to Include in Contracts
Ensure contracts contain a clear grievance procedure, avoid overly broad flexibility clauses that could be seen as allowing unilateral changes, and include dispute resolution mechanisms.
View related contract templateCommon Mistakes
- Unilaterally cutting pay or changing job duties without consent
- Ignoring or dismissing grievances
- Allowing bullying or harassment to go unaddressed
FAQ
Can an employee claim constructive dismissal without raising a grievance first?
Technically yes, but failing to raise a grievance first may count against the employee at tribunal. The ACAS Code of Practice recommends raising concerns internally before resigning, and compensation can be reduced by up to 25% for failure to follow the Code.
What are common examples of constructive dismissal?
Common examples include significant pay cuts without agreement, demotion without cause, failing to address serious bullying, fundamentally changing job duties, and creating an intolerable working environment through persistent unreasonable behaviour.
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Get Started FreeThis is guidance for UK employers, not legal advice. For complex employment law matters, consult a qualified employment solicitor or ACAS.
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