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Understanding the Breach of Contract Test 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 breach of contract test 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 Breach of Contract Test:

  • The breach of contract test is the cornerstone of constructive dismissal claims.

  • It requires the employee to prove that they resigned because of a breach of contract by the employer.

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

  • The employee’s 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. Western Excavating (ECC) Ltd v Sharp:

  • This landmark case 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.

  • 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. 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.


Understanding the breach of contract test in constructive dismissal cases is crucial. 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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