Constructive Dismissal

Constructive dismissal arises where you terminate your contract of employment, with or without prior notice, due to the conduct of your employer. Your employer’s conduct, however, must have been such that it would have been reasonable for you to terminate your contract without giving notice.

In a constructive dismissal claim, the employee must demonstrate that they are justified in their decision and that they had no option but to terminate their contract.

Constructive dismissal in Ireland occurs when an employee resigns due to an employer’s serious breach of contract or unreasonable conduct, effectively forcing them out, making the resignation a “forced” resignation rather than a free choice, and is claimed under the Unfair Dismissals Acts. In order to succeed  an employee must prove the employer’s actions (like pay changes, demotion, or a hostile environment) were so unreasonable or breached the contract so fundamentally that they had no reasonable alternative but to resign, often requiring the employee to have first used internal grievance procedures. 

Resigning and claiming Constructive Dismissal should never be taken lightly and should in almost all situations be a last resort.

Key Principles

  • Employer’s Conduct: The employer’s behaviour (action or inaction) must be a significant breach of contract or so unreasonable it destroys trust and confidence, making the job untenable.
  • Employee’s Action: The employee must resign because of this conduct, feeling they have no choice.
  • Burden of Proof: The employee bears the burden of proving their resignation was justified, unlike in direct unfair dismissal where the employer must justify the dismissal.
  • Last Resort: Employees should generally exhaust all internal complaints/grievance procedures before resigning, otherwise, the claim may fail. 

Examples of Employer Conduct

  • Unilateral changes to pay, hours, or job role.
  • Unreasonable demotion or significant reduction in status.
  • Harassment, bullying, or creating an intolerable work environment.
  • Breach of the implied term of mutual trust and confidence. 

How to Claim

  1. Document Everything: Keep records of the employer’s actions and your attempts to resolve issues.
  2. Use Grievance Procedures: Follow company procedures to raise the issues formally.
  3. Seek Legal Advice: Before resigning, consult an employment law solicitor to assess your case, as proving constructive dismissal is challenging.
  4. File a Claim: Make a claim for unfair dismissal (constructive) with the Workplace Relations Commission (WRC). 

In essence, the court asks: “Would a reasonable person in the employee’s position have felt compelled to resign?”. 

Conclusion 

The general rule is that before an employee can bring a constructive dismissal claim, they must have used the internal grievance procedure, and even if there is no grievance procedure, they should have raised their grievance with their employer so as to give the employer an opportunity to avail of it.

Even then, the employee must be able to show that the actions of the employer were so intolerable as to justify the employee resigning.

There may be times when the actions of the employer go beyond being intolerable and become oppressive or in breach of contract. There may be times where the employee, because of the actions of the employer being so bad that they, can resign without going through the grievance procedure but they will be an absolute minority of cases.

From reviewing decisions of the WRC, it is quite evident in relation to constructive dismissal cases that the numbers of complaints which are won by employees are extremely limited. The main reason these cases are lost is because the employee has not gone through the grievance procedure.

Before any employee considers resigning, they should obtain advice. They need to understand and check out whether the actions of the employer will be judged to be so intolerable as to allow them to resign. They need to make sure that they comply fully with the internal grievance procedures.