7. Constructive dismissal

[page 73]

A constructive dismissal takes place when an employee resigns in response to conduct by their employer that amounts to a fundamental breach of contract.

Employees can give their full contractual notice before resigning and still claim constructive unfair dismissal, so long as their resignation is in response to the employer’s fundamental breach of contract (section 95(1)(c), ERA 96).

Bringing a claim of unfair dismissal (“unfair constructive dismissal”) requires the employee to establish as a first step that they have been constructively dismissed, which involves three elements:

• that the employer has fundamentally breached the employment contract;

• that the employee has resigned in response to that breach; and

• that the employee has not “affirmed the contract” (waived the breach).

The usual two years’ service (one year in Northern Ireland) applies to claims of unfair constructive dismissal, but a discriminatory constructive dismissal does not require the two years’ qualifying service (Davies v EE Ltd [2022] EAT 191). Section 39(7)(b) of the Equality Act 2010 (EqA 10) specifies that discriminatory conduct can include dismissal.

Once a claimant has established that there was a constructive dismissal, there is still a question of reasonableness for the tribunal to decide. Although it is almost invariably the case that a constructive dismissal will be unfair, this is not necessarily the case – see page 78 under “Fairness”.