Navigating and Preventing Constructive Dismissals: A Guide for Line Managers
As a line manager, one of your crucial responsibilities is to ensure a productive and harmonious work environment for your team. However, there may be situations where an employee feels compelled to resign due to intolerable working conditions, leading to a concept known as "constructive dismissal." Understanding this legal concept and its implications is crucial for line managers to minimise the risk of such situations and maintain a motivated and engaged workforce. In this blog, we will delve into constructive dismissals, explore their causes, and provide practical guidance on how to prevent and address them effectively.
Understanding Constructive Dismissals
Constructive dismissal occurs when an employee is compelled to resign because of their employer's conduct or actions that breach the terms of their employment contract, making it untenable for them to continue working. Even though the employee technically resigns, the law treats it as a termination of employment by the employer. This distinction is essential because it exposes organisations to potential legal liabilities and damages.
The Law
It is important that Line Managers understand the law that underpins constructive dismissals. The legislation that enables employees to bring a claim against their employer for constructive dismissal is the Employment Rights Act 1996. This law gives employees the right not to be ‘unfairly dismissed’, and as a constructive dismissal is treated the same as if the employer had dismissed them, the law applies to constructive dismissals in the same way. To be eligible for protection under this law, employees need to have accrued at least 2 years of service.
Causes of Constructive Dismissals
Several factors can contribute to a situation that may be considered constructive dismissal. Here are a few common scenarios to be aware of:
1. Breach of contract:
If the employer unilaterally alters essential terms of the employment agreement without the employee's consent, such as reducing pay, changing job responsibilities, or relocating without reasonable justification, it can create a situation leading to the employee not being able to continue in their job.
2. Harassment and discrimination:
Employees who experience persistent harassment, discrimination, or a hostile work environment may feel compelled to resign if the matter has not been dealt with when reported. It is vital to address such issues promptly and provide a safe and inclusive workplace for all employees.
3. Unreasonable working conditions:
When an employer fails to address serious health and safety concerns, denies reasonable requests for accommodations, or persistently creates an oppressive work environment, it may lead to an employee being unable to attend work.
4. Breach of mutual trust and confidence:
One of the most common reasons given for constructive dismissal is that of breach of trust and confidence. If the employer undermines or erodes the relationship of trust and confidence between themselves and the employee, it may create a situation where the employee no longer feels they can continue working for the organisation.
5. Last Straw:
Sometimes a string of not-so-serious happenings might accumulate over time until one day it is too much for the employee to cope with. The final act in itself might not be sufficient to amount to a repudiatory breach of contract, but as a ‘ast straw’ event, a judge may be persuaded that the employee has reached a tipping point and a cumulative series of events amounts to a breach of contract entitling them to resign relying on the totality of the employer’s acts.
Whatever the reason given for a claim of constructive dismissal, it is notoriously difficult for an employee to prove that their only course of action was to resign. Therefore, it is important to note that if a Line Manager is involved in a dispute that is leading towards the employment relationship deteriorating significantly, it is unlikely to be too late to make things right again. If no attempt is made and the employment relationship is irreparably damaged, this is when the organisation is at risk of the employee resigning. Should this happen, the employee should be given an appropriate amount of time to ‘cool down’ and then a new attempt to address the issue should be made before the resignation is accepted and the employee is processed as a leaver. This will help the judge to see that there was an alternative for the employee other than resigning and any subsequent claim from an eligible employee would therefore be weakened.
Preventing and Addressing Constructive Dismissals
To minimise the risk of constructive dismissals and foster a positive work environment, line managers can take the following proactive steps:
1. Effective communication:
Maintain open lines of communication with your employees, fostering a culture of trust and transparency. Encourage them to share any concerns or grievances they may have, and address them promptly and impartially.
2. Fair treatment:
Ensure all employees are treated fairly and consistently, without favouritism or bias. Implement clear policies and procedures for performance management, promotions, and disciplinary actions.
3. Policies and training:
Develop comprehensive policies and procedures that address harassment, discrimination, and other workplace issues. Provide regular training to employees and managers to promote awareness and understanding of their rights and responsibilities.
4. Promptly address concerns:
When an employee raises a concern or lodges a complaint, take immediate action to investigate and resolve the issue. Maintain confidentiality, provide appropriate support, and ensure there are no repercussions for the employee.
5. Grievance procedure:
If all informal attempts to resolve the issue are unsuccessful then the Line Manager can encourage the employee to submit a formal grievance so that the matter can be reviewed by a different, and often more senior, manager.
6. Seek legal advice:
If you suspect a situation may be heading towards a constructive dismissal claim, consult with your organisation's HR or legal department or seek external legal counsel. They can provide guidance on mitigating risks and addressing potential legal issues.
Conclusion
Constructive dismissals can have serious repercussions for both employees and organisations, leading to legal disputes, damaged reputation, and low employee morale. As a line manager, your role is crucial in preventing and addressing such situations. By fostering a supportive and inclusive work environment, maintaining open lines of communication, and addressing concerns promptly, you can mitigate the risk of constructive dismissals and create a productive and engaged team.
Case Law
If you are interested to learn more about how a claim for constructive dismissal is decided on in the Employment Tribunal - here are some past cases that you can search and read about: