Difficulties with constructive dismissal

Implications of claiming constructive dismissal

Employees may sometimes seek to use a constructive dismissal claim to argue that post-termination restrictive covenants are no longer enforceable. However, the courts will scrutinise the circumstances carefully, particularly where the employee’s conduct suggests that the claim is being used as a means of avoiding contractual restrictions.

Where an employee cannot establish a genuine constructive dismissal, the employer may be able to enforce the restrictions and seek an injunction to prevent conduct that breaches them. The employer must satisfy the applicable legal requirements for injunctive relief, including demonstrating that damages would not be an adequate remedy in the circumstances.

Case must be put in writing before resignation

An employee considering a constructive dismissal claim should clearly document the employer’s alleged breach and raise the concerns through the appropriate grievance procedure where practicable. The timing and content of any grievance may be important evidence in a subsequent claim. We assist employees in setting out their complaints clearly and assessing their legal position before taking the significant step of resigning.

Reasons why constructive dismissal claims are rare

Constructive dismissal claims can be difficult to establish. Resigning in response to an employer’s conduct may bring salary and other employment benefits to an immediate end, leaving the employee without an income while the claim is pursued. Although compensation may be available if the claim succeeds or settles, the financial uncertainty and burden of proving constructive dismissal can make this route difficult in practice.

Best advice – do not resign

Resignation should not be treated as the automatic response to an employer’s alleged breach. Where possible, employees should obtain legal advice before resigning, as doing so may affect their employment rights, income and ability to pursue a claim.

However, remaining employed is not always the best option, and an employee who resigns may still have a valid constructive dismissal claim. The key issue is whether the employer has committed a sufficiently serious breach of contract and whether the employee resigns in response to that breach without affirming the contract. An ordinary unfair dismissal claim may be available if the employer dismisses the employee, subject to the applicable statutory requirements.

We can help employees assess their options before taking action, understand the risks of resignation and develop a strategy to protect their position.