Constructive dismissal - the last resort
“Constructive dismissal” is when an employee is forced to resign from their job because the employer has committed a serious breach of contract. It is not enough to prove unreasonable behaviour by the employer and an employee will need at least two years of continuous service. No member should ever be advised to resign because of an unbearable situation at work without first seeking specific advice from the Union. Unfortunately people do sometimes resign in haste and repent at leisure. So, it may be worth keeping in mind that very few tribunal claims for constructive dismissal succeed, and even for those who win, the pay-out is often not as high as they might imagine.
Examples of behaviour from an employer that might form the basis of a constructive dismissal could include:
- not being paid;
- being forced to accept unreasonable changes to your job that aren’t in your contract or collective agreement; or
- being required to work in dangerous conditions.
If there are issues of this sort it is important not to focus only on the legal route. If the employer is being really unreasonable members may decide on a collective industrial response. If a member does want to resign and take a legal case for unfair dismissal it is not always easy to work out how to proceed. Resigning with immediate effect will often be seen as the member breaching his or her contract. Failing to act quickly could equally be seen as accepting a change of contract, or waiving the grievance. Members who are subject to a serious breach of contract might also decide to carry on working ‘under protest’ for a time while they and their rep(s) try to get the employer to resolve the issue. In any case, members should know that proper advice from the Union will be critical.
Specific advice on the likely award in a given case can be important - especially if you are trying to negotiate compensation for a member who might otherwise go to tribunal.
If a member does take and win a case for constructive dismissal they can expect to be given a basic award and a compensatory award. The basic award is calculated using a formula based on age, length of service and normal weekly gross pay. The maximum payment is £15,240 but in most cases it will be considerably less.
The compensatory award is for any loss of wages, future wages and/or pension before getting a new job - as well as some compensation for loss of statutory rights (because you have to be in another job for two years before you regain unfair dismissal and redundancy rights). The maximum compensatory award is up to one year’s gross salary (or £83,682 if you are lucky enough to be paid more than that per year). Compensation can be increased beyond that cap if the dismissal is because of discrimination, whistleblowing, a breach of a health and safety, or trying to assert a statutory right – which bring in other legal issues. Tribunals can also decide to reduce awards based on evidence about the employees’ conduct.
For more information on constructive dismissal read the ACAS guidance: