Constructive dismissal: Overview, definition and example
What is constructive dismissal?
Constructive dismissal occurs when an employee is forced to resign due to their employer’s actions or behavior, which make it impossible for them to continue working under the original terms of the contract. It’s not about the employee voluntarily quitting, but rather about being pushed to leave because of severe changes in the work environment, such as a breach of contract, a toxic work culture, or a significant reduction in job responsibilities.
Why is constructive dismissal important?
Constructive dismissal is important because it protects employees from being unfairly forced out of their job due to the employer’s actions. It ensures that employers cannot simply make an employee’s working conditions intolerable and then claim the employee resigned voluntarily. Understanding constructive dismissal can help both employers and employees know their rights and avoid potential legal disputes.
Understanding constructive dismissal through an example
Imagine an employee is demoted without warning or explanation, and their responsibilities are significantly reduced. The employee might feel that the changes violate the terms of their original employment contract. If the employee resigns due to these changes, they might claim constructive dismissal, arguing that they were forced to leave because the employer fundamentally altered the terms of their employment.
Another example might be if an employer repeatedly fails to address workplace harassment or allows a toxic environment to persist. If the employee leaves because the employer’s inaction made it impossible to stay, this could be seen as constructive dismissal.
An example of a constructive dismissal clause
Here’s how a constructive dismissal clause might look in an employment contract:
"If either party makes a material breach of this Agreement, including but not limited to significant changes in duties, pay, or working conditions, the employee may consider the contract to have been effectively terminated and may resign with full entitlement to severance, compensation, or damages."
Conclusion
Constructive dismissal is a crucial concept in employment law, protecting employees from being forced out of their job due to changes or conditions imposed by their employer. It ensures that employees are not unfairly pressured into resigning and that their rights are upheld. Understanding constructive dismissal is essential for both employers and employees to avoid conflicts and ensure fair treatment in the workplace.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.