Constructive dismissal can be a distressing situation for everyone involved. There are many examples where an employee may feel they have been left no choice by their employer other than resignation. If they can prove that their employer’s actions are behind them resigning, they might have a claim for constructive dismissal.
Where an employee does have a claim, there could be financial compensation. Read on to see how much an employee might be entitled to.
What constitutes constructive dismissal?
Constructive dismissal is a situation in which an employee feels they are forced to leave a business because of something the employer has done, or not done, that leaves them no option to continue their work. They are not actually dismissed, but rather resign because they cannot see another way to resolve the situation at work.
Examples might include harassment or bullying by one or several other employees, acting unlawfully or asking an employee to do something unlawful, changing pay or working conditions without consultation or notice, and not allowing the right to appeal such a a change. This list is not exhaustive. In the event that your situation is considered to be constructive dismissal, you may be entitled to financial compensation.
How is compensation for constructive dismissal calculated?
There are employment laws that determine how and when a claim can be made. An employee must have worked for their employer for a minimum of two years, for example. If you do not have two years’ service, there might still be a case for wrongful dismissal. Constructive and unfair dismissal cases are treated differently, and constructive dismissal claims can be far higher than the earnings in a notice period alone in an unfair dismissal case. The tribunal has far more flexibility to determine the amount payable to the employee.
The two parts to a constructive dismissal payout
The basic award takes into account factors such as how long you have worked for the employer, your age, your basic salary and so forth. There is a cap at 20 years’ service, and the amount you would receive varies from one to five weeks’ pay for every year served, depending on your age.
There is also a compensatory element, which is far more flexible. It takes into account how much money you have lost as a result of the situation with your employer, and how long it might take you to find another similar role. When determining this figure, the tribunal might take into account other financial elements such as pension contributions or commission if appropriate, although discretionary bonuses would not usually be covered. They will take into account other ‘perks’ including a car allowance.
Reductions in compensation
There might be occasions when a tribunal will not award the full basic and/or compensatory amount. There would need to be evidence that the employee was at least in part a contributory factor in the termination of the contract.
Sometimes, the most difficult element is proving the severity of the breach of contract was sufficient to justify your notice.
The government website gives a detailed overview of constructive dismissal. If you have further questions about a constructive dismissal claim, https://www.employmentlawfriend.co.uk/constructive-dismissal contact Employment Law Friend or a similar specialist.
We recommend seeking professional legal advice before handing in your notice, to discuss your options and run through your next steps. You might be able to agree a figure for financial compensation with your employer in exchange for your resignation, or you may be left with no option but to take your employer to a tribunal hearing.