Practical Guide to Constructive Dismissal (UK)

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Also note: This is not legal advice.

Introduction

Constructive dismissal is a legal concept that employers in the UK must understand, as failing to do so can lead to costly and time-consuming legal action. Constructive dismissal occurs when an employer changes the terms of an employee’s employment without their consent - this could include reducing pay, changing working hours, or adjusting job roles. If an employee believes they have been constructively dismissed they may choose to resign and bring a claim of unfair dismissal against their employer.

To avoid such claims, employers need to make sure that changes to the terms of an employee’s employment are agreed in advance with ample time given for consideration; communicated transparently and consistently to all employees; reasonable and necessary; and not used as a way to avoid redundancies. The potential financial implications of a successful constructive dismissal claim should also be taken into account - as compensation awarded for unfair dismissal claims can amount up to two years’ salary or even more in some cases.

At Genie AI we understand how complex the rules around constructive dismissal can be, which is why we provide free templates on our community template library so anyone can draft high quality legal documents without paying a lawyer. Our team is dedicated to helping people understand these rules better, should you wish to access our library today you can do so without needing an account with us - we just want everyone who needs it have access this essential information! Read on for our step-by-step guidance on understanding constructive dismissal if you think you might need it.

Definitions (feel free to skip)

Employment Rights Act 1996: A UK law which gives employees rights in the workplace and protection from unfair dismissal.

Equality Act 2010: A UK law which prohibits discrimination on the basis of protected characteristics, such as age, gender, disability, and race.

Working Time Regulations 1998: A UK law which sets out the rights of workers concerning working hours and rest breaks.

Regulations: Rules or laws that must be followed.

Mediation: A process in which a third-party helps two or more people who are in conflict reach an agreement.

Reassign: To change someone’s job or role within a company.

Compliance: Abiding by rules or laws.

Transparent: Open and honest.

Entitlements: Benefits that a person is entitled to by law.

Reinstatement: The process of returning someone to their job after they have been dismissed.

Financial Award: A payment of money as a result of a legal judgement.

Prepare: To get ready.

Contents

• Understand What Constitutes Constructive Dismissal
• Research relevant employment laws
• Understand employee rights
• Familiarize Yourself with Employment Law
• Research relevant laws
• Become familiar with regulations
• Take Steps to Address the Problem
• Meet with the employee
• Attempt to resolve the problem
• Follow the Proper Procedure for Dismissal
• Ensure the dismissal is in compliance with the law
• Document the reason for dismissal
• Document Everything
• Keep records of emails, letters, and other conversations
• Document the dismissal process
• Consider Legal Advice
• Speak to a lawyer
• Understand your rights as an employer
• Provide Notice of Termination
• Draft a letter of termination
• Notify the employee
• Handle the Exiting Process
• Ensure the employee’s entitlements are paid
• Provide references or testimonials if applicable
• Be Prepared for a Legal Challenge
• Understand the potential outcomes
• Prepare a legal defense
• Handle the Aftermath of Constructive Dismissal
• Document the process
• Follow up with relevant parties

Get started

Understand What Constitutes Constructive Dismissal

• Understand the definition of constructive dismissal. Constructive dismissal is when your employer has made a significant change to your job, such as a major demotion or a change in pay, without your agreement and without reasonable notice.
• Learn about the legal definitions of constructive dismissal. Research relevant employment laws and consult a legal expert, if necessary, to understand what constitutes constructive dismissal in the UK.
• Understand that constructive dismissal does not have to be intentional on the part of your employer in order for it to be legally valid.
• Check whether or not the changes to your job amount to a breach of contract between you and your employer.

Once you have completed this step, you should have a clear understanding of what constitutes constructive dismissal and be able to move on to researching relevant employment laws.

Research relevant employment laws

• Read up on the Employment Rights Act 1996, which covers the basics of employee rights and outlines the key elements of constructive dismissal
• Research other relevant employment laws, such as the Unfair Dismissal Act and the Equality Act, to further understand the legal implications of constructive dismissal
• Make sure your research covers any relevant changes or updates to the laws, as well as any local laws or policies in your jurisdiction
• Once you have a thorough understanding of the applicable laws and regulations, you can move on to the next step.

Understand employee rights

• Research and understand the laws that protect employees from unfair dismissal, including the Employment Rights Act 1996, the Unfair Dismissal Act 1977 and the Equality Act 2010.
• Familiarize yourself with the criteria for constructive dismissal, including that the employer has breached a fundamental term of the contract, the employer’s action has breached the implied trust and confidence between the parties, and the employee had no other reasonable alternative but to resign.
• Understand that if an employee feels they have been constructively dismissed, they must be able to show that they had a valid reason to leave their job, and that their employer was at fault.
• Review any evidence that can be used to support the claim of constructive dismissal, such as emails, letters, or performance reviews.
• Once you have a thorough understanding of employee rights and the legal criteria for constructive dismissal, you can move on to the next step.

Familiarize Yourself with Employment Law

• Understand the basics of employment law in the United Kingdom
• Read up on the Employment Rights Act 1996 and other relevant laws
• Read through case law to understand how the courts have interpreted the relevant laws
• Understand employee rights and responsibilities in the workplace
• Learn about the types of employment contracts and their implications
• Familiarize yourself with the legal implications of constructive dismissal
• Research the requirements for constructive dismissal to be considered a fair dismissal
• When you have a good understanding of employment law, you can move on to researching relevant laws for constructive dismissal.

Research relevant laws

• Research the laws, regulations, and rights related to constructive dismissal, such as the Equality Act 2010, Unfair Dismissal Act 1996, and Working Time Regulations 1998.
• Make sure you understand the concept of constructive dismissal in the UK.
• Familiarize yourself with the process of filing a constructive dismissal claim.
• Make sure you know what type of evidence you will need in order to successfully make your claim.
• Check to see if you are eligible for a constructive dismissal claim.
• Once you have done your research and are confident in your understanding of the relevant laws and regulations, you can move on to the next step.

Become familiar with regulations

• Read up on the UK’s Employment Rights Act 1996, which covers the legal aspects of constructive dismissal
• Become familiar with the definitions of constructive dismissal, unfair dismissal, and wrongful dismissal
• Understand the differences between the three types of dismissals, including the conditions and criteria for each
• Research the ACAS Code of Practice on Discipline and Grievance, and how it applies to constructive dismissal cases
• Understand the rights of both employers and employees in a constructive dismissal case
• Know the potential outcomes and remedies for each type of dismissal

How to know when you can check this off your list and move on to the next step:

• When you feel confident in your understanding of the regulations and can answer questions about constructive dismissal, unfair dismissal, wrongful dismissal, and the ACAS Code of Practice on Discipline and Grievance.

Take Steps to Address the Problem

• Identify the underlying cause of the problem, such as poor performance or unacceptable behavior
• Discuss the issue with the employee in a private, non-confrontational setting
• Document the conversation, including any steps the employee has agreed to take in order to address the problem
• Make reasonable efforts to resolve the issue, such as offering additional training or support
• Monitor the employee’s progress and discuss any further steps that may be necessary

You can check this off your list and move on to the next step once you have identified the underlying cause of the problem, discussed the issue with the employee, documented the conversation, and made reasonable efforts to resolve the issue.

Meet with the employee

• Arrange a meeting with the employee to discuss the situation.
• Make sure to provide the employee with appropriate notice of the meeting and the topics to be discussed.
• Ensure the meeting is held in a private setting and the employee is given the opportunity to discuss the situation.
• Clearly explain the issues and concerns that have been identified.
• Encourage the employee to provide their side of the story and ask questions to ensure that the full facts are understood.
• Record the details of the meeting accurately.

You will know when you can move on to the next step when you have heard the employee’s side of the story and have a clear understanding of the facts related to the situation.

Attempt to resolve the problem

• Assess the situation and determine if any disciplinary action is needed
• Talk to the employee and take all their comments into consideration
• Try to address the issue with the employee before making a decision about dismissal
• Explain to the employee the reasons for the potential dismissal
• Offer the employee a chance to improve their performance
• Consider whether the issue can be resolved through mediation or other alternative dispute resolution methods
• Once the issue has been resolved, document the steps taken to resolve it and the outcome
• Once the problem has been resolved, check it off the list and move on to the next step.

Follow the Proper Procedure for Dismissal

• Find out if your business must follow certain procedures when dismissing employees.
• Ensure that you follow the correct procedures when dismissing an employee, such as:

• Providing the employee with the appropriate notice period.
• Offering the employee the opportunity to appeal against the dismissal.
  • Make sure that you have a written record of the dismissal procedure that was followed.
  • Have a fair and unbiased assessment of the employee’s situation.

You will know that you have successfully completed this step when you have followed the correct procedures for dismissal, have a written record of the dismissal procedure, and have had a fair and unbiased assessment of the employee’s situation.

Ensure the dismissal is in compliance with the law

• Check the UK employment laws to ensure the dismissal is in line with those laws
• Check to make sure the dismissal does not contravene any equal opportunities or anti-discrimination laws
• Make sure the dismissal is not a breach of contract
• Ensure the dismissal is reasonable and fair
• Once you are certain the dismissal complies with the law, you can move on to the next step.

Document the reason for dismissal

• Take detailed notes of any relevant information that may have contributed to the dismissal, such as misconduct or poor performance
• Collect witness statements, emails, or other documentation that support your decision
• Make sure the documentation is factual and objective, rather than subjective or biased
• Draft a formal letter of dismissal that explains the reason for dismissal in line with the documented evidence
• When the letter is complete, sign the letter and provide a copy to the employee
• Keep a copy of the signed and dated letter for your records
• You will know you have completed this step when you have the signed and dated letter of dismissal in your possession.

Document Everything

• Ensure the dismissal letter is dated and signed by both parties
• Make a note of any conversations relating to the dismissal, and ensure that any relevant documents are copied and stored
• Take note of the date, time, and place of any meetings
• Include a list of any witnesses to the dismissal
• Keep copies of any emails and letters sent or received relating to the dismissal
• Document any warnings or notices that have already been given, and any decisions made
• Make sure all documents are kept in a secure place

When you can check this off your list and move on to the next step:

• Once you have documented all of the above steps and have copies safely stored, you can move on to the next step.

Keep records of emails, letters, and other conversations

• Make sure to keep all emails, letters, and other conversations related to the dismissal process in a safe place.
• Save them as digital copies or hard copies.
• If you are sending emails, letters, or other conversations, make sure to keep records of the date, time, and subject.
• When you have gathered all the records of emails, letters, and other conversations, you can check this off your list and move on to the next step.

Document the dismissal process

• Make sure to document each stage of the dismissal process in writing, including the reasons for dismissal, any warnings issued, and other relevant details.
• Include any meetings that took place, details of what was discussed, and any agreed-upon actions.
• Ensure that any written records are signed and dated.
• If a settlement agreement is reached, ensure this is documented in writing, signed, and dated.
• When you have all the documentation in place, you can check this step off your list and move on to the next step.

Consider Legal Advice

• Research local firms or solicitors who specialize in employment law
• Contact them and arrange a consultation to discuss your circumstances
• Prepare a list of questions to ask the solicitor during your consultation
• Ask for advice on what your rights are under constructive dismissal law
• Ask for advice on the steps you should take to make a claim
• Make a decision on whether to pursue a claim and follow the lawyer’s advice
• Once you have discussed the legal options available to you and decided on a course of action, you can move on to the next step of speaking to a lawyer.

Speak to a lawyer

• Research and find a qualified lawyer who is specialized in employment law
• Ask for a consultation to discuss your legal options in the context of constructive dismissal
• Ask for a cost estimate for their services, and ensure you are comfortable with their rates
• When you have found a lawyer and agreed on a rate, you can check this off your list and move on to the next step.

Understand your rights as an employer

• Understand the legal definition of constructive dismissal in the UK
• Learn the legal requirements for employers when dealing with constructive dismissal
• Ensure you are familiar with the relevant laws and regulations, such as the Employment Rights Act 1996
• Research best practices for handling constructive dismissal cases in the UK
• Once you have taken the time to read up on the relevant laws and regulations, you will have a thorough understanding of your rights as an employer in relation to constructive dismissal.

Provide Notice of Termination

• Provide the notice of termination in writing to the employee and make sure to keep a copy for yourself
• Include the date when the employment is to end, any outstanding payments or entitlements due, and the reason for the termination
• Make sure the employee is aware of the right to appeal the decision
• Ensure that the notice period you give meets the legal requirements
• When the notice period has been served, you’ll know you can check this step off your list and move on to drafting a letter of termination.

Draft a letter of termination

• Determine the reasons for termination, such as poor job performance, misconduct, or any other valid reason.
• Prepare a draft of the letter of termination, including the employee’s name, the termination date, and the reason for the termination.
• Have the letter of termination reviewed by a legal professional before it is issued to the employee.
• Obtain the employee’s signature on the letter of termination.

You’ll know you can check this off your list and move on to the next step when you have obtained the employee’s signature on the letter of termination.

Notify the employee

• Give the employee a copy of the letter of termination and explain the reasons for the dismissal
• Arrange a meeting with the employee to discuss the dismissal and answer any questions they may have
• Allow the employee to have a companion with them at the meeting to provide support
• Explain the employee’s rights to redundancy payments, notice pay and other entitlements
• Ask the employee to sign the letter of termination to confirm they have received it
• Keep a copy of the signed letter for your records
• You have now notified the employee of their dismissal and can move on to the next step of handling the exiting process.

Handle the Exiting Process

• Establish the exit date and ensure the employee leaves the premises on that date.
• Collect the employee’s company property (e.g. keys, laptop, etc.).
• Ensure the employee has received their final payslip, including any holiday pay or notice pay due.
• Process the employee’s P45 and notify HMRC of their leaving date.
• Issue the employee with a letter of termination and/or settlement agreement, if applicable.
• Confirm the employee’s exit arrangements in writing.

Once all of the above tasks are completed, you can move on to the next step: Ensuring the employee’s entitlements are paid.

Ensure the employee’s entitlements are paid

• Calculate the employee’s final wages, deductions, and entitlements such as holiday pay, sick pay, and pay in lieu of notice
• Request the employee’s bank details to arrange payment of their wages and entitlements
• Ensure payment of the employee’s final wages and entitlements is completed on or before their last day of employment
• Once payment has been made, provide the employee with a written statement of their income and deductions for the tax year
• Check off this step when payment of wages and entitlements is complete and the employee has received their statement of income and deductions.

Provide references or testimonials if applicable

• Ensure that references or testimonials are obtained from relevant former employers, colleagues, or other qualified persons.
• Make sure the references or testimonials address the employee’s performance, conduct, and other relevant aspects.
• Ask the employee to sign a consent form allowing you to obtain the references or testimonials.
• Once obtained, review the references or testimonials to make sure they are accurate and appropriate.
• When you have reviewed the references or testimonials and verified their accuracy, you can check this step off your list.

Be Prepared for a Legal Challenge

• Research the law surrounding constructive dismissal in the UK
• Familiarize yourself with the legalities of constructive dismissal, including any relevant case law
• Carefully document the entire process of dismissing the employee
• Make sure all steps in the dismissal process are fair and in line with UK law
• Seek legal advice if necessary
• When you have completed all the steps and obtained legal advice if necessary, you can be confident that you are prepared for a legal challenge.

Understand the potential outcomes

• Understand the definition of constructive dismissal under UK law
• Be aware of the potential outcomes of a constructive dismissal case, including dismissal of the claim, financial compensation, reinstatement of the employee to their former position, or a combination
• Be aware of the potential risks of a constructive dismissal case, including potential damage to the employer’s reputation, potential legal costs, and the potential for a protracted legal dispute
• Understand the potential legal costs of a constructive dismissal case
• Understand the potential timeframe for a constructive dismissal case
• Understand the potential for a resolution of the case without a court ruling

When you can check this off your list and move on to the next step:

• When you have a thorough understanding of the potential outcomes and risks associated with a constructive dismissal case under UK law.

Prepare a legal defense

• Research UK law on constructive dismissal and the possible defenses available
• Seek legal advice from an employment lawyer on the best course of action to take
• Prepare evidence to support your defense, such as documents, emails and other relevant materials
• Consider whether any alternative dispute resolution, such as mediation or arbitration, would be beneficial
• When you have a strong legal defense prepared, you can move on to the next step.

Handle the Aftermath of Constructive Dismissal

• Review any documentation related to the constructive dismissal and ensure it complies with UK law
• Review any documentation related to the employee’s dismissal and ensure it complies with UK law
• Make sure any reference materials you have prepared are accurate and compliant with UK law
• Contact a lawyer to ensure that the dismissal was handled in a legally compliant manner
• Respond to any correspondence from the employee and/or their legal representative in a timely manner
• Keep records of all correspondence related to the dismissal
• Monitor the workplace atmosphere to ensure that employees are not adversely affected by the dismissal and that the dismissal does not lead to any form of discrimination or harassment

You will know that you can check this off your list and move on to the next step when you have completed all of the above steps and ensured all documentation is accurate and legally compliant.

Document the process

• Gather all evidence of the process, including any emails, notes or memos that relate to the dismissal
• Make sure to keep a record of any legal advice you may have received from your solicitor
• Draft a detailed letter of dismissal, and include any relevant legal information
• Once the letter of dismissal is complete, send it to the employee via mail or email
• Give the employee a copy of the letter of dismissal and any other evidence of the process
• Once the letter of dismissal has been sent and the employee has been given a copy, you can check this step off your list and move onto following up with relevant parties.

Follow up with relevant parties

• Provide notice in writing to the employee that they have been dismissed constructively
• Inform the employee of their right to appeal the decision
• Contact the relevant trade union or employee representative to inform them of the dismissal
• Keep a record of all communications and copies of all relevant documents
• Contact the relevant government departments or agencies to inform them of the dismissal
• Ensure that any other relevant parties, such as pension providers, are notified of the dismissal
• When all required steps have been taken, confirm in writing that the dismissal has been completed
• Make a note of the date of dismissal in the employee’s personnel file
• When all required steps have been taken, you can check this off your list and move on to the next step.

FAQ:

Q: What is the difference between UK and US collective bargaining laws?

Asked by Sally on April 5th 2022.
A: In the UK, collective bargaining is seen as a process of negotiation between employers and trade unions to agree on terms and conditions of employment such as pay, hours of work, holidays, etc. It is regulated by the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA). In the US, collective bargaining is regulated by the National Labor Relations Act 1935. The process is similar in both countries, but there are some differences in terms of which types of employees are protected by collective bargaining laws, the scope of negotiations that can be conducted, and enforcement mechanisms. For example, in the US employers must bargain in good faith with their employees while in the UK there is no such obligation.

Q: What happens if an employer refuses to bargain in good faith?

Asked by David on June 10th 2022.
A: Refusing to bargain in good faith is a violation of labor law in the US and can lead to legal action being taken against an employer. The National Labor Relations Board (NLRB) can impose penalties if an employer is found to have violated labor law by refusing to bargain in good faith. Penalties may include back pay for employees affected by the violation, a cease-and-desist order against the employer, or other sanctions depending on the severity of the violation.

Q: How can collective bargaining benefit employers?

Asked by John on September 1st 2022.
A: Collective bargaining can benefit employers in many ways. It can provide a platform for employers to negotiate with employees over terms and conditions of employment which are mutually beneficial for both parties. It can also help prevent industrial disputes from escalating as employers and employees can work together to come to an agreement. In addition, collective bargaining agreements often provide employers with greater certainty over their costs as well as improved employee morale and loyalty due to improved working conditions resulting from collective bargaining agreements.

Q: What are some common topics included in collective bargaining agreements?

Asked by Mary on October 15th 2022.
A: Common topics that are included in collective bargaining agreements include wages, hours of work, vacation time and holidays, health benefits, safety provisions, job security provisions, grievance procedures and dispute resolution procedures. Depending on the particular industry or sector in which an employer operates some additional items may also be included such as overtime pay, shift scheduling and pension plans.

Q: Is collective bargaining mandatory for all employers?

Asked by Elizabeth on December 10th 2022.
A: No, collective bargaining is not mandatory for all employers but it may be required depending on which sector or industry an employer operates within. For example, some jurisdictions require certain industries to engage in collective bargaining while others may not have such requirements. It is also important to note that even if collective bargaining is not mandatory it can still be beneficial for employers as it can help them remain competitive while providing their employees with improved terms and conditions of employment that are beneficial to both parties.

Q: Does collective bargaining apply to non-unionized workplaces?

Asked by Matthew on March 25th 2022.
A: Yes, collective bargaining does apply to non-unionized workplaces although it may take different forms than that which occurs between unions and employers. In non-unionized workplaces collective bargaining typically occurs between management and employees directly or through a representative such as a human resources department. Non-unionized workplaces may also engage in informal discussions or negotiations around specific topics such as wages or hours of work that do not necessarily constitute formal collective bargaining but still provide opportunities for employees and employers to come to mutually beneficial agreements regarding terms of employment.

Q: What are the advantages of collective bargaining for employees?

Asked by William on August 17th 2022.
A: Collective bargaining provides employees with numerous advantages including improved job security due to job protection clauses being incorporated into agreements; increased wages due to wage increase clauses; improved working conditions due to health and safety clauses; better benefits packages due to negotiations around health care coverage; and improved dispute resolution procedures that provide more efficient ways for resolving disputes between employees and management without going through lengthy court proceedings or expensive arbitration processes. Collective bargaining also provides employees with a platform for having their voices heard which can lead to greater job satisfaction overall.

Example dispute

Constructive Dismissal Lawsuit:

• To raise a successful lawsuit regarding constructive dismissal, the plaintiff must be able to demonstrate that their employer has breached the implied terms of their employment contract.
• The plaintiff must also be able to prove that their employer has taken an action which has either resulted in a significant change of their working conditions, or that they have been subjected to a behaviour which is offensive, intimidating or humiliating.
• The plaintiff is responsible for proving that the employer has breached the implied terms of the contract through their action or behaviour, and that the employee felt they had no choice but to resign as a result.
• To win their case, the plaintiff must be able to demonstrate that they have suffered financial losses as a result of the constructive dismissal. This can include lost wages, bonuses, or other compensation.
• Depending on the circumstances, the plaintiff may be able to seek monetary damages to compensate for their losses. This may include compensation for lost wages, bonuses, and other compensation.
• Another option is for the plaintiff to seek an injunction, which would require the employer to take steps to reinstate the employee in their former role or provide an equivalent role.
• It is also possible for the plaintiff to seek a settlement from the employer in exchange for dropping the lawsuit. This could include a payment to cover the plaintiff’s losses or a formal apology.
• If the case is successful, the court may also order the employer to pay the plaintiff’s legal costs.

Templates available (free to use)

Advice On Constructive Dismissal Letter To Employee
Et1 Claiming Constructive Dismissal
Et3 Defence For Sexual Harassment And Constructive Dismissal
Et3 Form Defence Against Employee Constructive Dismissal Claim
Wording For Et1 Sexual Harassment And Constructive Dismissal

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