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Understanding the 2-Year Service Requirement in Constructive Dismissal Cases


In the intricate landscape of employment law, the concept of constructive dismissal looms large. It’s a term that carries weight for both employers and employees alike. But what exactly does it entail, and how does the 2-year service requirement impact an employee’s ability to claim constructive dismissal? Let’s delve into the depths of this legal labyrinth and explore its implications.

The Legal Framework

  1. Constructive Dismissal Defined:

  • Constructive dismissal occurs when an employee resigns due to their employer’s conduct, even though the employer did not explicitly dismiss them.

  • The key element is that the employee’s resignation is in response to a fundamental breach of their employment contract by the employer.

  1. The 2-Year Service Requirement:

  • By law, an employee typically gains statutory protection against unfair dismissal after completing two years of continuous service with the same employer.

  • Before this threshold, an employer can lawfully terminate an employee’s contract without demonstrating a fair reason or following formal procedures.

  1. The Breach of Contract Test:

  • The landmark case of Western Excavating (ECC) Ltd v Sharp settled the question of whether unreasonable employer conduct alone is sufficient for constructive dismissal.

  • The Court of Appeal firmly established the breach of contract test as the standard. In practice, this means that for an employee to claim constructive dismissal:

  • There must be a breach of contract by the employer (or an anticipatory breach).

  • The breach must be repudiatory, justifying the employee’s resignation.

  • The resignation must be in response to the breach.

  • The employee should not unreasonably delay resigning after the breach.

  1. Implied Terms and Mutual Trust:

  • Courts recognize that various forms of unreasonable conduct by the employer constitute a breach of the implied terms of the employment contract.

  • The implied term of mutual trust and confidence is crucial. Employers must not act in a way that damages the relationship of trust between them and the employee.

  • Constructive dismissal cases often involve a cumulative series of incidents over time, rather than a single breach.

Precedent Cases

  1. Omilaju v Waltham Forest London Borough Council:

  • This case clarified the concept of the “last straw” in constructive dismissal.

  • Even if the last action by the employer doesn’t directly breach the contract, the cumulative effect of a series of incidents can amount to a breach.

  1. Mahmud v BCCI SA:

  • The court held that certain forms of unreasonable conduct by the employer constitute a breach of the implied terms of the employment contract.

  • The employer’s actions damaged the mutual trust and confidence, leading to constructive dismissal.

Understanding the 2-year service requirement in constructive dismissal cases is crucial. Employees must navigate the delicate balance between their rights and the practical realities of employment relationships. Seek legal advice to ensure you’re well-informed and protected.


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Can Canko

Employment, Contracts and Commercial Law

  • 17 years of legal experience

  • +500 case litigated (solo) globally

  • 276 appeals

  • 153 mediations

  • +$15bn transactional experience

  • Civil and common law qualifications

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