Constructive dismissal occurs when an employee resigns due to their employer’s conduct making it impossible for them to continue working. Unlike standard resignation, it is treated as a dismissal in law, meaning the employee may bring a claim for unfair dismissal against the employer.
Under UK employment law, this concept is underpinned by section 95(1)(c) of the Employment Rights Act 1996. It recognises situations where, due to a serious breach of contract, whether a single event or a series of incidents, an employee feels they have no option but to resign.
Understanding constructive dismissal is crucial for both employers and employees. Employees must recognise the legal thresholds and evidence requirements before taking action. Employers, on the other hand, need clear policies, proactive culture management, and strong grievance procedures to avoid risk.
Kingfisher Professional Services specialises in navigating these high-stakes situations. Whether it’s preventing claims or preparing robust responses, we provide tailored support grounded in UK employment law.
Legal Landscape
Employment Rights Act & Constructive Dismissal Test
Constructive dismissal is defined in section 95(1)(c) of the Employment Rights Act 1996. It occurs when an employee resigns in response to a repudiatory breach of contract by their employer. This means the employer’s actions must be so serious that they effectively break the contract.
To succeed in a claim, three legal tests must be met:
- A fundamental breach of the employment contract must have occurred. This could be a single severe incident or a cumulative series of lesser actions that together constitute a breach (e.g. unjustified demotion, deliberate failure to pay wages, or persistent harassment).
- The resignation must be a direct response to the breach. If the employee continues working for too long after the breach, it may be argued that they have affirmed the contract.
- The resignation must be prompt. Delays can weaken a claim and give the impression that the employee accepted the employer’s conduct.
The Employment Tribunal will assess whether the employer’s conduct would reasonably entitle an employee to resign. This objective test makes it vital for employees to document each step and for employers to respond swiftly to complaints.
Implied Term: Trust & Confidence
At the heart of many constructive dismissal cases is the breach of an implied term: the duty of mutual trust and confidence. This clause is embedded in every employment contract under UK law.
Employers must not act in a way that seriously damages trust and confidence. Examples of breach include:
- Failing to address workplace bullying or harassment.
- Unilaterally changing working hours, duties, or pay.
- Humiliating or isolating the employee.
When this implied term is breached, the employee may be justified in resigning and bringing a constructive dismissal claim. Understanding and respecting this principle is essential for maintaining a healthy employment relationship.
Common Triggers Explained
Breach of Contract
One of the most common causes of constructive dismissal is a clear breach of the written or implied terms of an employee’s contract. These breaches might involve:
- Non-payment or delayed payment of wages.
- Unilateral withdrawal of contractual benefits, such as bonuses or company cars.
- Unjustified demotion or change of role without consultation or consent.
Take, for example, a scenario where an employer cuts an employee’s salary by 20% without notice or discussion. This would likely constitute a fundamental breach of contract, allowing the employee to resign and bring a claim for constructive dismissal.
Even in cases where the contract doesn’t explicitly cover a particular situation, implied terms (like the duty of mutual respect) still apply. Employers must avoid making significant changes to the employment relationship without agreement.
Bullying, Harassment & Unsafe Environment
Workplace bullying or harassment can also lead to a constructive dismissal claim, especially if the employer fails to address it. Persistent mistreatment by colleagues or managers, whether verbal, emotional or physical, is a serious breach.
If an employee raises concerns via the grievance procedure and no meaningful action is taken, the failure itself may represent a breach of the implied term of trust and confidence.
A toxic or unsafe work environment, where risks to health or dignity are ignored, undermines the employer’s duty of care and can support a claim.
Unreasonable Changes
Employers sometimes make significant changes to an employee’s working arrangements. If done unilaterally and without proper process, these changes may be unlawful. Examples include:
- Changing hours or shift patterns at short notice.
- Relocating an employee without consultation.
- Reassigning responsibilities or downgrading roles.
In many cases, these events contribute to what is called the “last straw”: the final incident in a chain of breaches that prompts the employee’s resignation. Under the last straw doctrine, even a relatively minor event can trigger a claim if it follows previous acts that undermined the employment relationship.
Evidence Gathering & Process
Documenting Breaches
Successful claims hinge on well-documented evidence. Employees considering a constructive dismissal claim should keep a detailed record of all relevant events and communications.
Useful evidence includes:
- Emails or written messages confirming incidents or decisions.
- Payslips showing deductions or irregularities.
- Copies of grievance submissions and employer responses.
- Diary-style logs recording events and timelines.
- Witness statements from colleagues.
A clear, dated record of incidents helps establish a pattern of behaviour and strengthens the credibility of a tribunal claim.
When to Resign
Timing is critical. If an employee continues working after a fundamental breach, they risk affirming the contract. This means they are seen to have accepted the employer’s conduct, making it harder to bring a claim.
To preserve their position, the employee should resign promptly after the breach occurs, or after the last straw incident, while clearly referencing the reasons in their resignation letter.
This letter should outline the conduct that led to resignation, highlighting that the decision was not voluntary but a response to a breach of contract.
ACAS and Early Conciliation
Before lodging an employment tribunal claim, employees must engage in Early Conciliation through Acas. This mandatory step offers an opportunity to resolve the dispute without formal litigation.
If an employer is found to have breached the Acas Code of Practice, such as by ignoring grievances or failing to conduct fair investigations, the tribunal may increase compensation by up to 25%.
Early Conciliation is also a chance for employers to settle claims before reputational damage or costs escalate. Employers should approach this process seriously and consult legal experts early.
Real‑World Case Studies
Case Study 1: Nicola Hinds v Mitie
Nicola Hinds resigned after her manager made inappropriate remarks regarding her pregnancy and failed to act professionally. The tribunal found that the employer’s conduct amounted to both constructive dismissal and pregnancy discrimination.
The combination of discriminatory remarks, failure to resolve the situation, and loss of trust led to a successful claim. This case shows how quickly a failure in leadership can result in reputational and financial consequences.
Case Study 2: Nicholas Walker v Robsons Ltd
Mr Walker was symbolically demoted by being moved from his private office to an open-plan desk without explanation or consultation. Although the employer claimed it was a neutral decision, the tribunal agreed that the action damaged the employment relationship.
The tribunal found this to be the “last straw” in a series of undermining behaviours, upholding Mr Walker’s constructive dismissal claim.
Prevention & Best Practices
Effective Grievance Procedures
A strong grievance procedure can help prevent constructive dismissal claims by enabling early resolution of issues. Employers should:
- Respond to complaints in writing.
- Conduct impartial investigations.
- Provide updates and allow appeal.
Ignoring or delaying a response can constitute a breach of the Acas Code and worsen the situation. A structured grievance handling template ensures consistency and fairness.
Maintaining Contractual Clarity
Many disputes arise from mismanaged changes to contracts. Employers must consult with employees before altering terms, even when changes seem minor. Keep written records of any agreed changes and avoid sudden, unilateral decisions.
Review employment contracts regularly to ensure they reflect current duties, working hours, and expectations. Clear terms reduce ambiguity and strengthen your legal footing.
Training & Manager Awareness
Line managers are often the first point of contact in workplace issues. Without training, they may unintentionally breach employment rights or mishandle sensitive situations.
Equip managers with training on:
- Managing grievances
- Legal responsibilities under UK employment law
- Creating inclusive, respectful working environments
Kingfisher offers bespoke manager training to help organisations prevent toxic behaviours and maintain a safe, lawful workplace culture.
How Kingfisher Can Help with Constructive Dismissal
At Kingfisher Professional Services, we help employers and HR teams navigate constructive dismissal risks with confidence.
Our employment law experts provide:
- Tailored advice on contract terms, grievance management, and breach mitigation.
- Support in documenting responses to employee concerns and gathering evidence.
- Guidance in preparing for Acas conciliation and tribunal proceedings.
We also offer practical support to employees facing untenable conditions, helping them draft grievance letters, prepare resignation communications, and explore tribunal claims.
Whether you need immediate advice on a brewing issue or ongoing HR compliance support, Kingfisher’s solutions are tailored to your needs and culture. Our proactive approach protects your business from legal action while promoting a healthy employment relationship.
Conclusion
Constructive dismissal remains a complex area of UK employment law, but one with real consequences if mishandled. Employers who invest in policy, training, and contract clarity can prevent claims before they arise. Employees who feel mistreated must understand their legal rights and the importance of clear, prompt action.
Whether you are seeking to bring a claim or prevent one, Kingfisher offers the legal insight and HR support to guide you every step of the way.