Constructive dismissal

A constructive dismissal takes place where an employee resigns in circumstances where the employer’s behaviour amounts to a breach of contract so serious that it leaves them no alternative but to resign. The breach can be of an express or implied contract term but it must be fundamental (i.e. very serious).

A constructive dismissal has three key elements:

• the employer must have fundamentally breached the contract;

• the resignation must be in response to the breach; and

• the employee must not have waived the breach (also known as “affirming” the contract) by continuing to behave as if they are willing to treat the contract as ongoing after the contract breach.