Constructive dismissal is when an employee resigns in response to their employer’s conduct.
There are many things which can give rise to a constructive dismissal situation, obvious examples include:
- Asking employees to do something illegal;
- Being abusive toward employees;
- Failing to pay employees on time without good reason.
Ultimately, if an employee can prove that they have been constructively dismissed, they can be awarded damages for breach of contract or (if they have more than 2 years’ service) they can also claim compensation for unfair dismissal which could amount to as much as 1 year’s pay.
The "Last Straw"
Constructive dismissal can be based either on one serious act (such as the examples listed above), or it can be based on a series of acts or failings which, taken together, amount to a fundamental breach of contract.
The final act complained of is referred to as the “last straw”.
Where an employee relies on the last straw argument, they will need to demonstrate that there was a series of events leading up to the last straw.
If the series of events are few and far between it will often undermine their case.
The last straw does not need to be as serious as the previous acts complained of, but it must be more than trivial.
Examples could include:
- Failing to acknowledge or deal with an employee’s grievance;
- Showing favouritism when dealing with holiday requests;
- Unreasonably taking disciplinary action against an employee.
Importantly, the employee must resign within a reasonable period of the last straw relied on.
If they wait too long, they could be seen as having effectively agreed to the employer’s behaviour.
Key Advice to Employers: Keep Records
Last straw arguments will frequently refer to a series of events which could go back over many weeks, or sometimes, years.
It is crucial that employers keep clear and accurate records relating to interactions with employees, not only at significant times (e.g. disciplinary hearings) but also during events which could seem relatively innocuous at the time (e.g. pay reviews).
Remember that employees may be entitled to see any documents that you create and you should always bear in mind how the document would look to an Employment Tribunal.
Many last straw cases concern allegations that employers have failed to deal with grievances or complaints raised.
It is essential that employers take action when employees raise issues.
If an employer can demonstrate that they listen to their employees and offer to remedy issues raised then even if no formal action is taken (e.g. if the employee decides not to pursue a formal grievance) it will help to undermine the employee’s case if they subsequently pursue a claim based on the last straw argument.