Definition and Elements of Constructive Dismissal
– Constructive dismissal is the involuntary resignation of an employee.
– There is no single federal or state law against constructive dismissal.
– Constructive dismissal occurs when working conditions violate employment legislation.
– Canadian courts recognize circumstances where the employer alters employment conditions to the point where it is considered a termination.
– Constructive dismissal arises from the employer’s failure to fulfill essential obligations of the employment relationship.
– An employer’s breach of the employment contract allows the employee to treat themselves as dismissed without notice.
– Changes to wages can constitute constructive dismissal if the employer fails to pay the employee.
– Constructive dismissal always becomes a wrongful dismissal.
– In UK law, constructive dismissal is defined by the Employment Rights Act 1996.
– Constructive dismissal arises from a breach of the implied term of trust and confidence in the employment contract.
– A fundamental breach of any express or implied term of the contract is sufficient for constructive dismissal.
– Actions by the employer that constitute grounds for constructive dismissal in Canadian law are likely to hold true under English law.
Changes to the Employment Relationship
– Substantial changes to the employment contract can lead to constructive dismissal.
– Examples of such changes include demotion, altering job description or working conditions, lowering compensation, changing hours of work, and relocating the workplace.
– Failure to provide employment standards can also result in constructive dismissal.
– The breach by the employer must be fundamental for a successful constructive dismissal case.
– Not all changes to the employment relationship give rise to constructive dismissal.
Toxic Work Environments
– Employees can claim constructive dismissal based on the employer’s conduct rather than changes to the employment contract.
– A toxic work environment can be considered a constructive dismissal if it is so poisoned that a reasonable person wouldn’t be expected to return.
– Examples of a toxic work environment include unjustified criticism, vague and unfounded accusations of poor performance, and failure to prevent workplace harassment.
– The employer’s course of conduct or a single incident can demonstrate an intention to no longer be bound by the employment contract.
– Constructive dismissal is likely in cases of a toxic work environment.
Relation to Unfair Dismissal
– Constructive dismissal is not the same as unfair treatment of an employee.
– Treatment that may seem fair can still make an employee’s life difficult.
– Fair constructive dismissal can occur if there is a unilateral change of contract with a bigger benefit to the business.
– The employer breaching ERA96 s98(4) while being fair is doubted by the Employment Appeal Tribunal.
– Constructive dismissal is a contractual claim that can be made in a tribunal or court.
Typical Causes and Compensation
– Constructive dismissal is typically caused by unilateral contract changes by the employer.
– Examples include deliberate cuts in pay or status, persistent delayed wages, and refusal of holiday.
– Other causes include breach of contract in the form of bullying and breaches of behavior.
– Conduct that undermines trust and confidence can also lead to constructive dismissal.
– Employer tricks and actions that force an employee to resign are also causes.
– The employee’s conduct does not affect liability but can impact the amount of compensation.
– The employer cannot escape liability by blaming the employee’s conduct.
– Compensation may be reduced if the employee contributed to their own downfall. Source: https://en.wikipedia.org/wiki/Constructive_dismissal
In employment law, constructive dismissal, also called constructive discharge or constructive termination, occurs when an employee resigns as a result of the employer creating a hostile work environment. Since the resignation was not truly voluntary, it is, in effect, a termination. For example, when an employer places extraordinary and unreasonable work demands on an employee to obtain their resignation, this can constitute a constructive dismissal.
The exact legal consequences differ between different countries, but generally a constructive dismissal leads to the employee's obligations ending and the employee acquiring the right to make claims against the employer.
The employee may resign over a single serious incident or over a pattern of incidents. Generally, a party seeking relief must have resigned soon after an unreasonable situation was imposed.
