Constructive Dismissal
Constructive dismissal occurs when an employer fundamentally breaches the employment contract and the employee resigns in response to that breach. Common examples include unilaterally cutting pay, demoting without cause, bullying, or undermining an employee's authority. The employee must resign promptly after the breach; if they continue working without protest they may be found to have accepted the new terms.
To bring a constructive dismissal claim at an Employment Tribunal, the employee must have at least two years' continuous employment. The breach must be of a fundamental term — either an express contractual term or the implied term of mutual trust and confidence. Resigning 'without prejudice' or citing the breach explicitly in the resignation letter helps preserve the claim. The employee must not delay excessively; continuing to work for several months without protest is often treated as affirmation of the new terms. Compensation is calculated in the same way as unfair dismissal: a basic award (based on age and length of service) plus a compensatory award capped at the lower of £115,115 or 52 weeks' pay (2025/26 figures). ACAS Early Conciliation must be attempted before lodging a tribunal claim.