Constructive dismissal is where an employee feels they have no choice but to resign because the employer has made the work situation intolerable.

There are three broad categories:

• the employer gives an employee a choice between resigning or being dismissed
• the employer deliberately acts in a way aimed at pressuring (directly or indirectly) the employee to resign
• the employer has acted so badly (ie by breaching of the agreement or treating the employee highly unfairly) that the employee feels he or she cannot remain in the job.

Dismissals have been held to be constructive where: 

·         an unsatisfactory performer was given the opportunity to “save face” by resigning

·         an employer made major changes to an employee’s job duties, leading the employee to resign – in this case, a sales rep’s call cycle was unilaterally altered

·         an employee resigned because of suggestions of dishonesty after money went missing

·         an employee agreed to resign, but changed this decision and was dismissed

·         an employee resigned because the employer could no longer pay the wages due after the employer’s bank refused to release the necessary funds

·         an employee was asked directly to look for other employment

·         the employer unilaterally reduced the employee’s salary and thus breached a significant term of the employment agreement

·         the employer imposed a condition with which the employee could not reasonable comply – “turn up for work (despite having to look after children) or be treated has having quit.”

·         the employer pressured the employee to sign a new individual employment agreement which altered a fundamental, agreed but unwritten, term of the contract to the employee’s disadvantage

·         the employer’s foreman told workers that they would all be tested for drugs, based on one employee’s report that others were using drugs, leading that employee to feel unsafe and to resign

·         an employee resigned after the employer failed to take adequate steps to stop sustained verbal abuse by fellow employees

·         an employee told the employer he was making the transition from a man to a woman however the employer failed to give the employee a fair and reasonable opportunity to talk through any issues the employer might have had. Instead, the employer went to a meeting with the employee with a predetermined view that the transition did not suit the business and the employee was made to feel she had no choice but to leave her job.

Chapman ER are happy to advise on how to address allegations of constructive dismissal and assist with the mediation and facilitation of employment relationship problems.

If you think you have an issue, please don’t hesitate to contact us.