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Constructive Dismissal

Constructive Dismissal

Constructive dismissal may be less common than wrongful dismissal or unfair dismissal, but it’s no less unpleasant for all parties involved. A successful claim for unfair dismissal can be costly and also cause reputational damage to a business.

Taking the phrase ‘people don’t leave companies, they leave managers’ to the extreme, constructive dismissal is disagreeable on many levels. It affects not only the employee who feels compelled to quit in response to the way they have been treated but can also be deeply troubling for their co-workers. By better understanding constructive dismissal, you can take steps to avoid it happening in your business.

Instead of being dismissed by their employer, constructive dismissal is where an employee is forced out of their job because of the way their employer acts towards them. To use its full term, constructive unfair dismissal is where an employer breaches their employment contract with an employee or breaches the mutual duty of trust and confidence between employer and employee. This is known as ‘a repudiatory breach’. The result? The employee feels they have no option but to resign.

Constructive dismissal can be due to a single serious incident or a series of incidents which are serious when combined. For constructive dismissal to be considered, the employee must resign soon after the incident or incidents which forced them out.

In order to claim constructive dismissal, the claimant must be, or have been, an employee and been continuously employed with the same employer for at least two years. They must show that the way their employer has treated them – the repudiatory breach – has made their position untenable.

The best way to deal with constructive dismissal is to avoid it happening in the first place. Not only does this reduce the costs and management time associated with dealing with a constructive dismissal claim, but it avoids the damaging effect that a claim for constructive dismissal can have on existing and potential future employees.

To avoid constructive dismissal, employers should:

• Focus on developing a company culture that’s built on respect and fairness. With a healthy company culture, situations that could result in constructive dismissal are less likely to develop.
• Invest in manager and supervisor training. Managers who understand the risks of constructive dismissal will be less likely to engage in activities that could make an employee’s position untenable.
• Support managers and supervisors so they know how to deal issues such as poor performance, workplace conflict or health and safety concerns.
• Make sure up-to-date policies are shared with all employees and are implemented across the business.

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