Constructive Dismissal
When your employer's conduct is so serious that you have no choice but to resign, you may have been constructively dismissed. This guide explains your rights, what you need to prove, and how to make a successful claim.
Quick Reference
What is Constructive Dismissal?
Constructive dismissal occurs when you resign because your employer has committed a fundamental breach of your employment contract. Although you resign, you are treated in law as having been dismissed under s.95(1)(c) of the Employment Rights Act 1996.
The leading case is Western Excavating (ECC) Ltd v Sharp [1978], which established the "contract test": you must show that your employer was guilty of conduct which was a significant breach going to the root of the contract, or which showed that the employer no longer intended to be bound by one or more of the essential terms.
The most commonly breached term is the implied term of mutual trust and confidence, established in Malik v BCCI [1997]. This requires that employers must not, without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence.
What You Need to Prove
The Western Excavating Test
In Western Excavating (ECC) Ltd v Sharp [1978], the Court of Appeal established the strict contractual test for constructive dismissal. Lord Denning held that an employee is entitled to treat themselves as dismissed only if the employer is guilty of conduct which is a significant breach going to the root of the contract, or which shows that the employer no longer intends to be bound by essential terms.
This rejected the earlier "unreasonableness test" and made clear that unreasonable conduct alone is not enough. The breach must be fundamental. However, if the employer breaches the implied term of trust and confidence (which requires conduct "without reasonable and proper cause"), unreasonable conduct may become a contractual breach.
Common Examples of Fundamental Breach
- Bullying and harassment: Persistent bullying by managers or colleagues that the employer fails to address
- Demotion or undermining: Removing responsibilities, undermining authority, or sidelining you without justification
- Unreasonable allegations: Making serious false allegations without proper investigation
- Failure to address grievances: Ignoring or dismissing serious complaints without proper investigation
- Unilateral changes to terms: Imposing significant changes to pay, hours, duties, or location without agreement
- Hostile work environment: Creating or tolerating an intimidating, offensive, or humiliating environment
- Series of incidents: A cumulative breach through multiple acts that together destroy trust and confidence (the "last straw" doctrine)
Affirming the Contract
If you delay too long after becoming aware of the fundamental breach, you may be held to have "affirmed" the contract, meaning you have accepted the breach and waived your right to resign. What counts as "too long" depends on all the circumstances, including:
- The nature and seriousness of the breach
- Whether you were seeking alternative employment
- Whether you were pursuing a grievance process
- Whether you made clear you were not accepting the breach
If you need time to find another job or complete a grievance, make clear in writing that you are not accepting the breach and reserve your right to resign. However, there is no fixed time limit, and cases have gone both ways.
How to Make Your Claim
Document everything
Keep detailed records of all incidents that led to your resignation. Save emails, messages, meeting notes, and any other evidence. Write a contemporaneous diary of events while they are fresh in your mind. This evidence will be crucial to proving the fundamental breach.
Raise a formal grievance
Submit a written grievance to your employer outlining the breach of contract and requesting it be remedied. This shows you gave your employer an opportunity to fix the problem. Keep a copy of your grievance and any responses. If appropriate, wait for the grievance process to conclude, though you may resign immediately if the breach is sufficiently serious.
Resign clearly and promptly
Submit a resignation letter that clearly states you are resigning due to your employer's fundamental breach of contract. Be specific about what the breach is. Do not delay unreasonably after the breach or you risk 'affirming' the contract. You can resign with or without notice, depending on the severity of the breach.
Submit early conciliation
Before submitting your ET1, you must notify ACAS for early conciliation. ACAS will attempt to facilitate a settlement. This process typically takes up to one month and 'stops the clock' on your time limit. You will receive an early conciliation certificate needed to proceed with your claim.
File your ET1 claim
Complete and submit your ET1 claim form to the employment tribunal within 3 months less one day of your effective date of termination. Include your early conciliation certificate number. Set out the facts clearly, identify the fundamental breach, and explain how it caused you to resign. State the remedies you seek (reinstatement, re-engagement, or compensation).
Compensation for Constructive Dismissal
If your constructive dismissal claim succeeds, the tribunal will treat you as unfairly dismissed and may award:
- Basic award: Calculated like statutory redundancy pay, based on your age, length of service, and weekly pay (subject to statutory cap)
- Compensatory award: Compensation for financial losses caused by the dismissal, including loss of earnings, pension, and benefits. Subject to statutory cap (currently around £115,115 or 52 weeks' pay, whichever is lower)
- ACAS uplift: Up to 25% increase if your employer unreasonably failed to follow the ACAS Code (e.g., failed to investigate your grievance)
- ACAS reduction: Up to 25% reduction if you unreasonably failed to follow the ACAS Code (e.g., failed to raise a grievance)
You have a duty to mitigate your losses by seeking alternative employment. Compensation may be reduced if you fail to take reasonable steps to find new work.
Tips for a Stronger Claim
- Be clear in your resignation letter. Explicitly state that you are resigning due to your employer's fundamental breach of contract. Vague or ambiguous resignation letters can undermine your claim.
- Do not delay after the breach. Continuing to work for weeks or months after becoming aware of the breach may be seen as affirming the contract, destroying your claim.
- Focus on the implied term of trust and confidence. This is the strongest legal basis for most constructive dismissal claims. Show how your employer's conduct was calculated or likely to destroy the employment relationship.
- Use the 'last straw' doctrine if appropriate. If no single incident is serious enough, argue that a series of incidents cumulatively amounts to a fundamental breach. The final incident need not be a breach itself, but must contribute.
- Keep contemporaneous notes. Write down what happened, when, who was involved, and how it made you feel at the time. Contemporaneous evidence is far more credible than recollections created months later.
- Get legal advice early. Constructive dismissal is complex and highly fact-specific. Early advice can help you decide whether to resign, how to word your resignation, and whether you have a strong claim.
The Last Straw Doctrine
If no single incident is serious enough to constitute a fundamental breach, you may rely on a series of incidents that cumulatively amount to a breach of the implied term of trust and confidence. The final incident (the "last straw") need not itself be a breach of contract or unreasonable, but it must contribute something to the breach, however small.
In Omilaju v Waltham Forest LBC [2005], the Court of Appeal held that the last straw must not be utterly trivial and must be related to earlier conduct. An entirely innocuous act cannot be a last straw, even if it triggers the resignation.
When relying on the last straw doctrine, set out all relevant incidents in chronological order in your ET1, explain how each contributed to the cumulative breach, and identify the final incident that caused you to resign.
Related Guides
Unfair Dismissal
Understand your rights when dismissed by your employer and how to claim compensation.
Wrongful Dismissal
Learn about breach of contract claims when dismissed without proper notice or procedure.
Discrimination Claims
Protected characteristics and how to prove discrimination in the workplace.
Whistleblowing Protection
Your rights when raising concerns about wrongdoing in the workplace.
Ready to start your constructive dismissal claim?
Generate professional Particulars of Claim citing ERA 1996 and the implied term of trust and confidence.
Start Your Claim