Constructive Dismissal

Constructive dismissal is a legal concept found in section 95(1)(c) of the Employment Rights Act 1996. It occurs when an employee resigns in circumstances where the employer has committed a fundamental breach of the employment contract — typically a breach of the implied term of mutual trust and confidence — and the employee resigns in response to that breach.

The employee is treated in law as having been dismissed, even though they technically resigned. They can then bring a claim for unfair dismissal in the Employment Tribunal, provided they have at least two years of continuous employment.

The concept has three key elements:

1. A fundamental breach of contract by the employer — not merely unreasonable behaviour but a serious breach going to the root of the contract
2. The employee accepts the breach by resigning — the resignation must be caused by the breach
3. The employee does not affirm the breach — they must resign promptly rather than continuing to work for a prolonged period after the breach

A wide range of employer conduct has been found to amount to a fundamental breach, including:

• Unilateral changes to fundamental contract terms — reducing pay, changing hours, or changing location without agreement
• Sustained workplace bullying or harassment by managers or colleagues that the employer fails to address
• False accusations of misconduct made in bad faith
• Failure to follow a proper procedure during a disciplinary process in a way that undermines trust and confidence
• Deliberately failing to provide a safe working environment
• Undermining an employee's authority without good reason
• Victimising an employee for raising a grievance

Not every unreasonable act by an employer amounts to a fundamental breach. Isolated incidents or minor breaches are unlikely to support a constructive dismissal claim. However, a series of incidents — even if individually minor — may collectively amount to a "last straw" that justifies resignation.

Constructive dismissal claims are high-risk because:

• You lose your job and income immediately on resignation
• The Tribunal must find both a fundamental breach and that you resigned in response to it — this is often difficult to prove
• Even if constructive dismissal is found, the Tribunal will also assess whether the dismissal was unfair — the employer may have had a legitimate reason for their conduct
• You must notify Acas and go through Early Conciliation before bringing a claim, and you have only three months less one day from the date of resignation to start the process

Before resigning, you should: exhaust internal grievance procedures (this strengthens your case and is important evidence); document all relevant incidents with dates and details; take advice from an employment solicitor or Acas; and consider whether the situation can be resolved another way. Many constructive dismissal cases settle at the Early Conciliation stage.

Constructive dismissal claims are difficult to win — you must prove the employer committed a fundamental breach of contract, you resigned in response to that breach, and you did not delay too long (which could be seen as affirming the breach). Keep contemporaneous evidence: save emails, note dates of incidents, and keep a diary of events.

It is usually advisable to raise a formal grievance before resigning, though it is not legally required. If your employer fails to follow the Acas Code on grievances, any tribunal award can be increased by up to 25%. When you resign, state clearly in your resignation letter that you are resigning because of the employer's breach. Do not simply say you have found another job. Take legal advice before resigning if possible.