- What is constructive dismissal?
- What constitutes a breach of contract by your employer?
- Can a breach of contract be a series of cumulative actions or does it have to be a single incident?
1. What is constructive dismissal?
Constructive dismissal is, contrary to the relatively straightforward test for unfair dismissal, a curious mix of common law and statute. A “constructive dismissal” occurs when an employee resigns from their job because of their employer’s unreasonable conduct; effectively “turning” the resignation into a dismissal and enabling them to claim unfair (constructive) dismissal.
2. What constitutes a breach of contract by your employer?
Under s.95(1)(c) an employee may resign from their employment with or without notice but they must be entitled to do so as a result of their employer’s conduct. In determining whether an employee is entitled to resign one or other of two tests are commonly used:
- The traditional “contract” test; or
- The breach of the implied term of mutual trust and confidence test
The traditional contract test analyses the express terms of the contract of employment to determine what the contractual terms are and establish whether the employer is guilt of conduct which is a significant (or serious) breach of those terms. It is normally fairly easy to determine what the terms of the contract are if there exists a written contract of employment – what is more difficult is to determine whether the breach of a particular term (say, working hours) is sufficiently serious as to act as a repudiatory breach of the contract of employment by the employer and entitle an employee to resign. The mutual trust and confidence test relies on an examination of whether the actions of the employer are sufficiently serious as to destroy the mutual trust and confidence that previously existed between the parties.
The important element in both of these tests is therefore the meaning of what is sufficiently “serious” to justify an employee’s resignation. Both objective and subjective tests are used to determine whether certain actions (or a failure to take particular actions) are serious. A subjective test involves a look at how important the employee finds a particular action (let’s use the change of working hours again). If the employee thinks this is an extremely important term then it will be subjectively sufficiently serious to entitle the employee to resign. However, the objective seriousness of the action must also be considered – effectively whether the reasonable person would consider the change of working hours a sufficiently serious breach of contract to entitle the employee to resign.
We’ll now go on to take a look at whether a series of actions can cumulatively constitute a sufficiently serious breach of contract to entitle the employee to resign (for example, a series of unjustified disciplinaries over a number of years) or whether there normally has to be a single sufficiently serious action (such as the refusal to pay your wages).
3. Can a breach of contract be a series of cumulative actions or does it have to be a single incident?
An employer’s actions, as above, must be sufficiently serious to be significant and go “to the root of the contract”. The action can either be a single incident or the “last straw” in a series of incidents that had occurred. It will normally be fairly clear whether a single incident justifies an employee’s resignation. The effect of a series of incidents is, however, more unclear and we’ll take a look at this below.
In order for an incident to constitute the “last straw” in a series of incidents and entitle the employee to resign the quality of the incidents as a whole must demonstrate that the employer had indicated an intention to no longer be bound by the terms of the contract of employment. The final incident cannot be utterly trivial or entirely innocuous in nature. If an act is more than trivial, however, it can entitle the employee to resign and the employee can use previous actions by the employer (i.e. disciplinary actions which would otherwise be out of time) as evidence of sufficiently serious behaviour to constitute repudiatory breach of contract. These acts, though, must be of sufficiently serious quality in themselves to be potential breaches of contract – i.e. they can’t be trivial.