Constructive Dismissal: How to Build Your Case

Constructive dismissal occurs when an employee resigns in response to the employer's conduct, and that conduct amounts to a fundamental (or repudiatory) breach of the employment contract. It is treated as a dismissal by the employer, not a voluntary resignation by the employee.

The legal basis comes from s.95(1)(c) of the Employment Rights Act 1996: an employee is dismissed if they terminate the contract (with or without notice) in circumstances in which they are entitled to terminate it without notice by reason of the employer's conduct. In Western Excavating (ECC) Ltd v Sharp [1978], the Court of Appeal established the contractual test that applies today.

Constructive dismissal claims can be complex. The employee must prove three things: there was a repudiatory breach of contract by the employer, the employee resigned in response to that breach (not for some unrelated reason), and the employee did not delay too long before resigning (thereby "affirming" the contract despite the breach).

The most commonly relied-upon term in constructive dismissal claims is the implied term of mutual trust and confidence. This was established by the House of Lords in Malik v Bank of Credit and Commerce International SA [1997] and provides that the employer shall not, without reasonable and proper cause, conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee.

This is a broad term that covers a wide range of employer behaviour. Examples include: subjecting an employee to a campaign of bullying or harassment, unreasonably refusing a pay rise year after year, unilaterally changing job duties without agreement, failing to address a genuine grievance, undermining an employee in front of colleagues, or creating an unbearable working environment.

The test is objective: would a reasonable person in the employee's position consider the employer's conduct to be a fundamental breach? The employer's intention is not determinative — even well-meaning but unreasonable conduct can breach the term. A single serious act can suffice, but more commonly the claim is based on a cumulative series of acts, the last of which (the "last straw") triggers the resignation.

Common examples of conduct that tribunals have found to amount to a repudiatory breach include: unilateral reduction of pay or withdrawal of contractual benefits; demotion or significant change of duties without consent; bullying, harassment, or verbal abuse by managers or colleagues left unchecked; failure to provide a safe working environment; failure to investigate or address a grievance properly; and suspension without reasonable grounds.

The "last straw" doctrine is particularly important. In Omilaju v Waltham Forest London Borough Council [2004], the Court of Appeal held that the last straw need not itself be a breach of contract — it need only be an act which, when added to the earlier breaches, amounts to a cumulative breach. However, it must contribute something to the breach — a completely innocuous act cannot be a last straw.

Breach of express contractual terms can also found a constructive dismissal claim — for example, if the employer fails to pay wages, changes working hours without consent, or relocates the employee in breach of a mobility clause. These may be more straightforward to prove than breach of the implied term.

While there is no legal requirement to raise a grievance before resigning, doing so is strongly advisable for several reasons. First, the ACAS Code of Practice on Disciplinary and Grievance Procedures recommends it, and an unreasonable failure to follow the Code can result in a reduction of your compensation by up to 25%.

Second, raising a grievance creates a contemporaneous written record of the issues and the employer's response (or failure to respond). This can be powerful evidence at tribunal. If the employer fails to investigate your grievance properly or at all, this may itself constitute a further breach of contract.

Third, it demonstrates to the tribunal that you acted reasonably and gave the employer an opportunity to put things right before you resigned. Tribunals are more sympathetic to employees who have tried to resolve the situation internally. However, there are circumstances where raising a grievance is not necessary — for example, where the breach is so serious that further engagement with the employer is pointless, or where the employer has already demonstrated that grievances are not taken seriously.

One of the most critical aspects of a constructive dismissal claim is timing. If you continue to work for your employer after a repudiatory breach without protesting or resigning, you risk being found to have "affirmed" the contract — that is, accepted the breach and waived your right to resign in response to it.

There is no fixed time limit for affirmation, and the tribunal will consider all the circumstances. Continuing to work while protesting the breach (for example, working "under protest" while pursuing a grievance) is less likely to constitute affirmation than continuing without complaint. However, the longer you leave it, the greater the risk.

The safest approach is to resign promptly once it becomes clear that the employer is not going to remedy the breach. If you are pursuing a grievance, you can work under protest while the grievance is investigated, but if the outcome is unsatisfactory, you should resign without significant further delay. The resignation letter should clearly state that you are resigning because of the employer's conduct and identify the key breaches.

Affirmation is the legal concept that, by continuing to work after a repudiatory breach, the employee has accepted the changed terms and lost the right to claim constructive dismissal based on that breach. It is one of the most common defences raised by employers.

The key factors the tribunal considers include: the length of delay between the breach and the resignation, whether the employee protested or worked "under protest," whether the employee sought to invoke the grievance procedure, the nature of the breach (a continuing breach is harder to affirm than a one-off act), and the employee's personal circumstances (for example, financial pressures that made immediate resignation difficult).

To minimise the risk of affirmation, you should: make clear in writing that you do not accept the breach, use the phrase "under protest" or "reserving my rights," pursue the grievance procedure promptly, and resign as soon as it is clear the employer will not remedy the breach. Seeking legal advice during this period can help you navigate the timing correctly.

Building a successful constructive dismissal claim requires careful evidence gathering. Key documents include your employment contract and any amendments, payslips and benefit documentation, the dismissal or resignation letter, all grievance and disciplinary correspondence, emails and messages showing the employer's conduct, and notes of relevant meetings or conversations.

Witness evidence can be crucial, particularly for bullying or harassment claims where the conduct may not be well documented. Identify colleagues who witnessed the relevant events and ask if they would be willing to provide a witness statement. Be aware that current employees may be reluctant to give evidence against their employer.

A contemporaneous diary or log of incidents is particularly valuable. If you have not been keeping one, start now — note dates, times, what was said or done, who was present, and how it affected you. Tribunals give significant weight to contemporaneous notes over later recollections. Also keep records of any financial losses flowing from the dismissal, as these will be relevant to compensation.

If your constructive dismissal claim succeeds, the tribunal treats it as an unfair dismissal and can award the same remedies: a basic award (calculated like a redundancy payment based on age, service, and weekly pay) and a compensatory award for financial losses caused by the dismissal.

The compensatory award covers loss of earnings (past and future), loss of statutory rights, loss of pension contributions, and expenses. It is subject to the statutory cap (the lower of 52 weeks' gross pay or the statutory maximum). You are required to mitigate your losses by actively seeking alternative employment.

If the constructive dismissal was also discriminatory (for example, you were forced to resign because of harassment related to a protected characteristic), you can claim uncapped discrimination compensation including injury to feelings (Vento bands) in addition to the unfair dismissal remedies. Where the employer failed to follow the ACAS Code of Practice, compensation can be uplifted by up to 25%. Conversely, if you unreasonably failed to raise a grievance, your award may be reduced.