Constructive Dismissal - 
a Breach of Contract in Employment

In employment law, the law of contract forms the basis for employment. A constructive dismissal would occur when one party to the contract, in most cases the employer, unilaterally makes changes to the working conditions or terms of employment without the agreement of the other party, namely the employee.

The two most common breaches leading to these dismissals are related to:

  • a reduction in pay, and
  • some unilateral form or type of demotion.

When these unilaterally changes affect the employee, to such an extend that the employee has little or no choice but to resign, then the employee can file a complaint. Under such cases the employee has a legal right to seek legal compensation from the employer as he or she could claim wrongful dismissal.

Constructive dismissal is considered a form of employment termination. If an employee resigns from his or her job because of the actions on the part of the employer, then it may be viewed as a legitimate complaint.

However, when claiming under this form of dismissal the employee would need to show that:

  • There was a serious breach of contract committed by the employer (not paying you for work done, or demoting you without reason)
  • You were forced to accept the changes in your employment contract without your agreement
  • You were faced with bullying, harassment or violence against you by fellow workers
  • Making you work under dangerous conditions
  • You had little or no choice but were forced to leave because of that serious breach
  • Your behaviour has not shown that you have accepted or condoned your employer's change in working conditions.

Dealing with This Dismissal

In employment law a constructive dismissal is seen as the employer having rejected the employment contract, and as such, the employee can claim financial compensation for the employer's breach of contract.

The amounts for damages or compensation may usually be centred and calculated around what is considered to be reasonable notice given in common law.

Filing a complaint is not as clear-cut as it may seem, as there are specific legal requirements that would need to be met in order for the claim to be successful.

Timing is also very important and claims should be filed as soon as possible after the breach has occurred. Therefore, it is advisable for the plaintiff to first contact an employment lawyer or labour relations consultant to determine the merits of the claim.

If you as an employee feel that you may have a case, then you should seek legal advice immediately.

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