For an employer, constructive dismissal can have serious consequences.
It’s where an employee resigns without notice following a major breach of their contract of employment. But what sort of behaviour leads to that?
In this guide, we explore common examples. We also explain how to avoid such a situation, which can result in an expensive claim in the Workplace Relations Commission.
Constructive dismissal examples
There are many and varied ways you can breach an employee’s contract. As such, it’s difficult to determine an exact set of examples.
However, there are common situations that can arise that can lead to a constructive dismissal. Here are some of then:
- Refusing to pay employee wages.
- Demoting a staff member without a genuine reason to do so.
- Altering an employee’s employment contract terms without prior notice—such as updating their shift patterns.
- Bullying employees.
- Putting staff through disciplinary procedures when they haven’t done anything to warrant such an action.
- Allowing a combination of negative factors to culminate with the employee having to quit.
- Ignoring the bullying and/or harassment of staff members.
- Refusing to support managers through difficult working situations.
- Victimising certain employees deliberately.
- Making false accusations at staff, such as fraud or misconduct.
There are more examples, but this is a very broad area. Ultimately, your business should remember not to have openly hostile or undermining policies.
It’s essential to respect employment rights to avoid any potential legal repercussions.
Constructive dismissal letter
Your employee should send you a letter before any legal action takes place.
This will outline the reasons for their resignation. Here’s an example of resignation letter due to constructive dismissal.
Dear [name of line manager],
I am writing to confirm I will be resigning from my role. As my employment contract states, I am providing a month of notice/with immediate effect.
I would like it be known I’m resigning due to a breach of contract. I consider [reason for resigning] to be a breach of my contract and believe this to be constructive dismissal.
I raised a grievance about this issue on [date], which wasn’t satisfactory in resolving this matter.
*End sample letter*
You can respond to this letter by holding a meeting with the employee. During that you can discuss with them their issues.
It may be possible to reach an understanding with them, consequently stopping any further legal activity.
However, if it doesn’t then you may have to prepare for a hearing in the Workplace Relations Commission. In that event, seeking litigation representation is an essential step to defending your business.
Examples of successful constructive dismissal cases
Claims are often genuine—employer negligence can, ultimately, result in a major compensation award for the employee and a damaging public reputation.
And there are many cases from recent history that display how important it is to respect your employees’ rights.
Employees need a strong case to win a constructive dismissal claim. There must have been a breach of the employment contract and the employee must be able to demonstrate that the employer’s behaviour was so intolerable that the employee had no reasonable alternative other than to resign without notice.
In the case of Buckley v Dunnes Stores (UD1064/2014) for example, an employee won €8,000 after she was dismissed for telling a colleague to limit the amount of work they were completing.
Ultimately, the EAT decided that the business had missed key information—such as a witness statement and failing to allow the employee to be accompanied during the disciplinary process.
And a disciplinary hearing was held the same day of the investigation process, making it unfair towards the employee.
Employees should always exhaust the internal grievance and disciplinary procedures before making a constructive dismissal claim. As an employer, you should have an opportunity to correct any mistakes that were made.
However, a recent case shows that each constructive dismissal claim will be decided on its own facts.
The employee in this case did not exhaust the grievance procedures and still won €60,000 after her data access request allowed her to exhibit internal email communications between managers at her hearing.
The email chain showed that her dismissal was orchestrated, a breach that went to the root of the employment contract and the employee’s claim succeeded.
How to avoid constructive dismissals
One of the best ways to avoid this outcome is to understand how your business can breach an employee’s contract.
Poor employer behaviour can occur in many ways—the best approach you can have to running your business is to treat all staff members fairly.
You should also respect the various employment laws in Ireland, which regulate areas like health & safety, data protection and working time.