Editing Constructive dismissal (section)

==UK law==

In [[United Kingdom]] law, constructive dismissal is defined by the [[Employment Rights Act 1996]] section 95(1)c:<ref name=era96-95>{{UK-LEG
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{{blockquote|The employee terminates the contract under which they are employed (with or without notice) in circumstances in which they are entitled to terminate it without notice by reason of the employer's conduct.}} The circumstances in which an employee is entitled are defined in common law. The notion of constructive dismissal most often arises from a fundamental breach of the term of trust and confidence implied in all [[contract of employment|contracts of employment]]. In order to avoid such a breach "[a]n employer must not, without reasonable or proper cause, conduct himself in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence between the employer and the employee."<ref name=Malik>''[[Malik and Mahmud v Bank of Credit and Commerce International SA|Malik & anor v Bank of Credit and Commerce International SA]]'' 1997] UKHL 23; [1998] AC 20</ref> Whilst a breach can be of the implied term of trust and confidence, a fundamental breach of any of the express or implied terms of a contract of employment is sufficient. The examples given on this page for actions by an employer likely to constitute grounds for constructive dismissal under Canadian law also almost certainly hold true under English law.

The [[Department of Trade and Industry (United Kingdom)|Department of Trade and Industry]] states:

{{blockquote|A [[tribunal]] may rule that an employee who resigns because of conduct by his or her employer has been 'constructively dismissed'. For a tribunal to rule in this way the employer's action has to be such that it can be regarded as a significant breach of the employment contract indicating that he or she intends no longer to be bound by one or more terms of the contract: an example of this might be where the employer arbitrarily demotes an employee to a lower rank or poorer paid position. The contract is what has been agreed between the parties, whether orally or in writing, or a combination of both, together with what must necessarily be implied to make the contract workable.<ref>http://www.berr.gov.uk/employment/employment-legislation/employment-guidance/page31082.html#Constructive_dismissal {{Dead link|date=February 2022}}</ref>}}

Following constructive dismissal, a claim for [[unfair dismissal]] and/or [[wrongful dismissal]] may arise.

===Types of constructive dismissal===

Although they tend to blend into one in a tribunal, strictly there are two types of constructive dismissal: statutory and common law.

At common law<ref>''Western Excavating (ECC) Ltd v Sharp'' [1978] ICR 221</ref> the requirement is acceptance of a repudiatory breach, which means the employer has indicated it no longer considers itself bound by an essential term of the contract, e.g. the requirement to pay wages or the requirement not to destroy the mutual bond of trust and confidence. It does not matter if the employer did not mean to repudiate the contract.<ref name=lewis>''Lewis v Motorworld Garages Ltd'' [1986] ICR 157</ref>

Under statute<ref name=era96-95/> the requirement is employer's "conduct" allowing the employee to "terminate with or without<ref name=era96-95/> notice"; as this can only happen with a repudiatory breach it amounts to the same thing.

===Relation to unfair dismissal===
A common mistake is to assume that constructive dismissal is exactly the same as unfair treatment of an employee – it can sometimes be that treatment that can be considered generally evenhanded nevertheless makes life so difficult that the employee is in essence forced to resign<ref>''Savoia v Chiltern Herb Farms Ltd'' [1982] IRLR 166</ref> (e.g., a fair constructive dismissal might be a unilateral change of contract justified by a bigger benefit to the business than the inconvenience to the employee), but the Employment Appeal Tribunal doubts that it will be very often that the employer can breach [[Employment Rights Act 1996|ERA96]] s98(4) whilst being fair.

A constructive dismissal occurs when the employer's repudiatory breach causes<ref>''British Leyland UK Ltd v McQuilken'' [1978] IRLR 245</ref> the employee to accept that the contract has been terminated, by resigning. The fairness of it would have to be looked at separately under a statutory claim for unfair dismissal.

The problems for the employer are that constructive dismissal is a contractual claim, which can be made in a tribunal for up to £25,000 or in court without limit, and, by dismissing constructively, it by definition misses out on the correct procedure meaning that even if the reason was fair, the decision was probably not, and so an unfair dismissal usually arises, creating a statutory claim alongside the contractual claim.

The court can look behind the lack of, or different, stated reason given by the employee at the time of resignation to establish that a cover story was in fact a resignation caused by fundamental breach.<ref>''Weathersfield Ltd v Sargent'' [1999] ICR 425</ref>

===Typical causes===
The person causing the dismissal does not need the authority to dismiss, as long as they acted in the course of employment.<ref name=era96-95/><ref name=hilton>''Hilton International Hotels (UK) Ltd v Protopapa'' [1990] IRLR 316</ref>

====Grounds====
Constructive dismissal is typically caused by:-

*unilateral contract changes by the employer such as:
** deliberate<ref>''Cantor Fitzgerald International v Callaghan'' [1999] ICR 639</ref> cuts in pay or status (even temporary<ref>''[[Wadham Stringer]] Commercials (London) Ltd and Wadham Stringer Vehicles Ltd v Brown'' [1983] IRLR 46</ref>),
** persistent delayed wages,
** refusal of holiday,<ref>''Lytlarch Ltd v Reid'' [1991] ICR 216</ref>
** withdrawal of car,<ref>''Triton Oliver (Special Products) Ltd v Bromage'' (EAT 709/91) IDS Brief 511</ref>
** suspension without pay (or even on full pay<ref>''William Hill Organisation Ltd v Tucker'' [1999] ICR 291</ref>),
** dramatic changes to duties, hours<ref>''Greenaway Harrison Ltd v Wiles'' [1994] IRLR 380</ref> or location (beyond reasonable daily travelling distance<ref>''Courtaulds Northern Spinning Ltd v Sibson'' [1988] ICR 451</ref>), or
* breach of contract in the form of bullying, e.g.:
** ignoring complaints,<ref>''Goolds v McConnell'' [1995] IRLR 516</ref>
** persistent unwanted amorous advances,<ref>''Western Excavating (ECC) Ltd v Sharp''</ref>
** bullying and swearing,<ref>''Korkaluk v Cantor Fitzgerald International'' [2004] ICR 697</ref>
** verbal abuse (typically referring to gender,<ref>''Isle of Wight Tourist Board v Coombes'' [1976] IRLR 413</ref> size<ref>''Palmanor v Cedron'' [1978] IRLR 303</ref> or incompetence<ref name=courtaulds>''Courtaulds Northern Textiles Ltd v Andrew'' [1979] IRLR 84, EAT</ref>),
** singling out for no pay rise,<ref>''Gardner v Beresford'' [1978] IRLR 63</ref>
** criticising in front of subordinates,<ref name=hilton/>
** lack of support (e.g. forcing to do two peoples' jobs),<ref>''Seligman v McHugh'' [1979] IRLR 316</ref>
** failure to notify a woman on maternity leave of a vacancy which she would have applied for if she had been made aware of it,<ref>''Visa International Service Association Ltd v Paul'' [2004] IRLR 42</ref>
** refusal to confirm continuity on [[Transfer of Undertakings (Protection of Employment)|TUPE]] transfer,<ref>''Euro-Die (UK) Ltd v Skidmore'' (EAT 1158/98) (2000) IDS Brief B665/14</ref>
** revealing secret complaints in a reference (even ones required by a regulator<ref>''TSB Bank plc v Harris'' [2000] IRLR 157</ref>), or
*breaches such as:
** behaviour which is arbitrary, capricious, inequitable, intolerable or outside good industrial practice,<ref>''Woods v WM Car Services (Peterborough) Ltd'' [1981] ICR 666</ref>
** conduct that undermined trust and confidence (i.e. offering an incentive to resign to avoid performance managing capability),<ref>''Billington v Michael Hunter & Sons Ltd'' EAT 0578/03, IDS Brief 758</ref>
** refusal to look for an alternative role due to workplace stress,<ref>''Thanet District Council v Websper'' EAT 1090/01, IDS Brief 728</ref>
** disproportionate disciplinary penalty,<ref>''Stanley Cole (Wainfleet) Ltd v Sheridan'' [2003] ICR 297</ref>
** employer tricks employee into resigning.<ref>''Caledonian Mining Co Ltd v Bassett'' [1990] ICR 425</ref>

=====Flexibility and mobility clauses=====
A flexibility clause does not allow the employer to change a type of job<ref>''Land Securities Trillium Ltd v Thornley'' [2005] IRLR 765</ref> as it is implied that the flexibility is to operate within the original job.

A mobility clause is subject to the implied term of mutual trust which prevents the employer from sending an employee to the other side of the country without adequate notice or from doing anything which makes it impossible for the employee to keep his side of the bargain.<ref>''United Bank Ltd v Akhtar'' [1989] IRLR 507</ref>

====Insufficient grounds====
There is no right to automatic pay rises.<ref>''Murco Petroleum Ltd v Forge'' [1987] ICR 282</ref> Nor is a smoking ban a breach.<ref>''Dryden v Greater Glasgow Health Board'' [1992] IRLR 469</ref>

===Compensation===
The employee's conduct is irrelevant to liability, although it can affect quantum; in other words it cannot get the employer off the hook, but could reduce compensation if he helped bring about his own downfall.

===Timing===
The conduct by the employer could be:

* a one-off repudiatory or fundamental breach of contract,
* a series of acts or omissions which amount to a repudiatory or fundamental breach of contract, or
* a 'last straw' act or omission which, although in itself not a repudiatory or fundamental breach of contract can when taken in the context of earlier breaches amount to conduct which is a repudiatory or fundamental breach of contract.

Note: unreasonable conduct will not suffice to establish constructive dismissal claim since a repudiatory or fundamental breach of contract must be established.

===Employee must resign quickly===
The employee has to resign within a reasonable time of the trigger, which is the one-off outrage or the last straw. The employee could work under protest while he or she finds a new job.<ref>''Jones v F Sirl & Son (Furnishers) Ltd'' [1997] IRLR 493</ref>

====Waiver====

If the employer alleges that the employee waived a breach by not resigning, each breach needs to be looked at to see if it was waived separately,<ref name=logan>''Logan v Commissioners of Custom and Excise'' [2004] IRLR 63</ref> but even if a breach was waived, the last straw revives it for the purpose of determining whether overall there was a repudiation.<ref name=lewis/>

====Affirmation====

If the employer alleges that the employee has affirmed a breach by not resigning, the employee could point out that no consideration was paid for it and so no contract change has been accepted. Acceptance of a replacement job would prove affirmation.<ref>''Bunning v GT Bunning & Sons Ltd'' [2005] EWCA Civ 983</ref>

An employee who stays on for a year after refusing to sign a new contract does not necessarily accept it.<ref>''Aparau v Iceland Frozen Foods plc'' [1996] IRLR 119</ref>

====Last straw====

The last straw does not have to be similar to the earlier string of events or even unreasonable or blameworthy – it need only be related to the obligation of trust and confidence and enough that when added to the earlier events the totality is a repudiation.<ref>''Omilaju v Waltham Forest London Borough Council'' [2005] ICR 481</ref>

====Notice period====

Although the employer's breach must be serious enough to entitle the employee to resign without notice, the employee is entitled to give notice if they prefer, so that they could enjoy the benefit of wages during the notice period.

To prevent the employer alleging that the resignation was caused by a job offer, the employee should resign first and then seek a new job during the notice period.

During the notice period, the employer could make the employee redundant<ref>{{UK-LEG
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