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Constructive dismissal

2nd February 2017

Constructive dismissal arises where an employee resigns as a result of an employer fundamentally breaching their contract of employment. In these circumstances, whilst the employee has resigned, the law treats it as a dismissal by the employer.

To amount to a constructive dismissal, the breach of contract must be a very serious breach.  If a breach is not sufficiently serious to amount to a fundamental breach of contract, the employee will not be able to treat the contract as being at an end. The onus is on the employee to prove their case which often makes this type of claim more difficult for an employee than an ordinary unfair dismissal claim.

The breach can be of an express term of the contract, for example where an employer imposes a pay cut without the employee’s agreement, or of an implied term, for example where an employer harasses an employee, resulting in the implied duty of trust and confidence being breached.

The employee must resign in response to the breach of contract.  If they resign for another reason, for example they had already decided to leave, then this will not amount to a constructive dismissal, even if a breach has occurred.  In general, an employee must also not wait too long after the breach has occurred before resigning.  A delay can result in the employee being deemed to have accepted the breach.

Constructive dismissal is a complex area and it is recommended that specialist employment law advice is sought if a potential constructive dismissal situation arises.

For further information please contact: Steven Harte

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