When an employee feels they’ve been forced to resign due to their employer’s actions, it may lead to a constructive dismissal claim. Central to this type of claim is the breach of contract test. This article explains what the breach of contract test is, how it applies to constructive dismissal cases, and what employees and employers need to know.
What is Constructive Dismissal?
Constructive dismissal happens when an employee resigns because their employer has seriously breached their employment contract. Instead of being fired, the employee feels they have no choice but to leave due to the employer’s actions.
Understanding the Breach of Contract Test
To succeed in a constructive dismissal claim, the employee must show that the employer breached a fundamental term of the employment contract. This breach is often called a repudiatory breach.
Key Examples of Repudiatory Breaches:
Non-payment of wages
Unfair treatment, such as bullying or harassment
Unlawful changes to contract terms, like reducing pay or hours without agreement
Failing to provide a safe working environment
The breach must be serious enough to justify the employee’s resignation.
How to Apply the Breach of Contract Test
The breach of contract test in constructive dismissal cases looks at whether:
The employer’s actions fundamentally broke the trust and confidence between the employer and employee.
The breach was serious enough to make the employment relationship untenable.
For example:
If an employer suddenly demotes an employee without explanation, this could be seen as a breach of trust and confidence.
If an employer delays paying wages multiple times, it could signal a serious breach of contract.
Time is Critical
If you believe there has been a breach of contract, you must act quickly. Continuing to work after the breach may suggest that you’ve accepted the situation, weakening your case for constructive dismissal.
Top Tip:
Resign as soon as possible after the breach if you intend to make a claim. Always seek legal advice first.
Proving Your Case
To win a constructive dismissal claim, the employee must prove:
The employer’s breach was serious.
The resignation was a direct response to that breach.
The claim was filed within the legal time limit (usually 3 months from resignation).
What Can Employers Do?
Employers should:
Maintain clear communication with employees.
Resolve workplace disputes promptly.
Avoid making changes to contracts without proper consultation.
Provide a safe and respectful work environment.
The breach of contract test is central to any constructive dismissal claim. Employees must demonstrate that their employer seriously breached the terms of their contract, making their position untenable. Employers, on the other hand, should take steps to prevent workplace disputes and breaches.
If you’re unsure about your situation, consult a specialist employment lawyer to discuss your options.
Frequently Asked Questions
Q: Can I claim constructive dismissal if I resigned due to stress?A: It depends. You need to show that your stress was caused by a serious breach of contract by your employer.
Q: What is the time limit for filing a constructive dismissal claim?A: You must file your claim within 3 months from the date of your resignation.
Q: Do I need legal advice to resign due to constructive dismissal?A: Yes, it’s highly recommended to seek advice before resigning to ensure you have a strong case.
