Constructive unfair dismissal is one of the most complex areas of UK employment law. If an employer’s conduct leaves an employee with no reasonable option but to resign, the law may treat this as an unfair dismissal.
This article explains what constitutes constructive unfair dismissal under UK law, the surrounding legal framework and the practical steps employees and employers can take to make and avoid claims respectively.
What Is Constructive Unfair Dismissal?
A specific series of events culminates in constructive unfair dismissal, which arises where:
- The employer commits a fundamental breach of the employment contract; and
- The employee resigns in response to this breach; and
- The employee does not wait too long to resign, so as to seemingly accept the breach
Although the employee resigns of their own free will, the law recognises the resignation as a dismissal by the employer. Not every workplace dispute or unfair act will qualify; the conduct must constitute a contractual breach that goes to the root of the employment relationship.
Common Examples of Constructive Unfair Dismissal
Constructive unfair dismissal claims can arise for a few reasons. Every case depends heavily on its own facts, but typical scenarios include:
- Failure to address persistent bullying or harassment
- Failure to investigate serious grievances
- Unilateral reduction in pay or status
- Retaliation for whistleblowing or raising concerns
- Discriminatory treatment or failure to make reasonable adjustments
How to Make a Constructive Unfair Dismissal Claim
To successfully bring a claim for constructive unfair dismissal, an employee must take a strategic approach to gathering evidence and meet the strict conditions set by the Employment Tribunal. This starts with engaging an employment solicitor.
What Employees Should Do
Many claims fail because employees have resigned too early, too late or for a reason other than the one stated. Employees considering resignation should take the following precautions:
● Raise a formal grievance where possible
● Keep detailed records of events
● Avoid unnecessary delay once the position becomes untenable
● State in the resignation letter that the resignation is due to the employer’s breach
● Seek personal legal advice before resigning
What Employers Should Do
Employers can avoid constructive unfair dismissal claims, which often arise from poor handling rather than deliberate wrongdoing. To comply with the employment contract and duly protect the employment relationship, employers should:
- Handle grievances properly
- Train managers sufficiently
- Avoid unilateral contract changes
- Abide by the implied term of mutual trust and confidence
- Seek business legal advice if faced with a constructive unfair dismissal claim
The Tribunal Process
To succeed when claiming constructive unfair dismissal, an employee must establish a fundamental breach of contract, resignation in response to the breach, no affirmation of the contract, and several unfair dismissal requirements.
1. A Fundamental Breach of Contract
An employee must show that their employer breached the contract, through either a single serious act or a series of minor acts. The “last straw” doctrine in constructive dismissal allows an employee to resign due to a series of acts culminating in a “last straw”.
2. Resignation in Response to the Breach
An employee must resign because of the breach. The breach does not need to be the only reason, but it must be a substantial cause. An employee cannot have resigned for an unrelated reason, or else the constructive unfair dismissal claim will fail.
3. No Affirmation of the Contract
An employee must not continue working too long after the breach, or else they may be taken to have affirmed the contract. There is no fixed time limit; instead, the court considers factors such as the length of the delay and whether they pursued a grievance.
4. Unfair Dismissal Requirements
It is not enough to demonstrate constructive dismissal. To bring a successful constructive unfair dismissal claim, an employee must usually show at least two years’ continuous service and that the dismissal was unfair under the statutory test.
Certain claims, such as whistleblowing or discrimination-related dismissals, do not require the employee to have qualifying service. Additionally, while the Employment Rights Act 2025 proposes to change the service length requirement, this will not be implemented until 2027.
Navigate Constructive Unfair Dismissal Claims with Newtons Solicitors
Constructive unfair dismissal sits at the intersection of contractual law and employment protection. While it is the employee who resigns, the law focuses squarely on whether the conduct of the employer constituted a fundamental breach of contract.
For employees in this situation, careful preparation and timing are essential. For employers, the best safeguards against constructive unfair dismissal claims are fair processes, proper grievance handling and respect for contractual obligations.
Newtons Solicitors’ employment law specialists are fully equipped to guide you through the process of bringing, or defending against, a constructive unfair dismissal claim. Please contact us today to learn how we can help you in your time of need.
FAQs
- What is the statutory definition of constructive unfair dismissal?
The statutory basis of constructive unfair dismissal is found in Section 95(1)(c) of the Employment Rights Act 1996, which states that an employee is dismissed if “the employee terminates the contract under which they are employed (with or without notice) in circumstances in which they are entitled to terminate it without notice by reason of the employer’s conduct.”
- What counts as a breach of contract?
The statute does not define what conduct entitles an employee to terminate the contract in this way, but common law holds that a party may terminate a contract if the other commits a repudiatory (fundamental) breach. This means that an employer must have demonstrated an intention to cease being bound by one or more essential terms of the contract. A breach of either express or implied contractual terms may be considered repudiatory.
- What are express and implied contractual terms?
In contract law, express terms are specific promises and conditions agreed upon by all parties, either verbally or in writing. They form the core of the agreement. Examples of express-term breaches include failure to pay wages and unilateral pay cuts or demotions.
In contrast, an implied term is an unstated provision automatically included in a contract to ensure fairness and functionality. They are not explicitly mentioned, but added by law, courts, custom or the parties’ conduct.
- What is the implied term of mutual trust and confidence?
The most significant implied term is that of mutual trust and confidence, under which an employer must not “without reasonable and proper cause, conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence between employer and employee.” A breach of the implied term of mutual trust and confidence can amount to a repudiatory breach.