This form of resignation can have serious consequences for your business. As such, it’s important to understand your legal standing in the event it occurs.
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Or you can read this guide, where we take you through the current Irish laws and how your business can approach the issue.
What is constructive dismissal?
It’s when an employee resigns without providing notice due to a business committing a serious breach of the employment contract.
Despite the term, no “dismissal” takes place during the process. It’s simply about the actions of an employer undermining a relationship with an employee.
It will reach the point where a member of staff will feel they have no alternative but to resign from their role.
The employee will, effectively, consider themselves as having faced an unfair dismissal. This can result in a claim to the Workplace Relations Commission.
The law on constructive dismissal developed to prevent employers avoiding unfair dismissal claims by effectively forcing the employee to resign through some inappropriate behaviour.
There are no statistics for an average payout for constructive dismissal in Ireland but the emotional and time costs of a constructive dismissal scenario are likely to far outweigh the financial costs.
The maximum payout for a constructive dismissal claim is two years’ salary.
The grounds for constructive dismissal
So what would your business have to do to warrant this? There are some common examples:
- Reducing pay without an agreement with the employee.
- Demoting a member of staff without providing a good reason.
- Making a claim of poor performance with no proof.
- Forcing an employee to work in a dangerous situation.
- Ignoring bullying or harassment.
Whatever the breach is it has to be serious enough to warrant a resignation. Each case will be determined on its facts by the Workplace Relations Commission.
The constructive dismissal process differs from other types of unfair dismissal. Employees who make a constructive dismissal claim must prove that they had no option but to terminate their contract and that their decision to leave was reasonable.
In a standard unfair dismissal claim, the onus is on the employer to prove that their decision to dismiss an employee was fair and reasonable.
As it’s not a normal voluntary resignation, the employee must consider that the only option in the circumstances is a termination of the employment contract.
An example is if a business deliberately places an impossible workload on an employee, forcing them to resign.
The employee can then make claims against the business. If there are consequent issues in relation to unpaid salary a wrongful dismissal claim may come about.
Constructive dismissal after maternity leave
Businesses must respect the rights of all employees and offer a fair working life—including for any staff on maternity leave.
If your business decides to hand job responsibilities to another staff member while an individual is away on maternity leave then the employee may have a claim for constructive dismissal.
As it can be difficult to prove, they may ask for assistance from a solicitor or union.
You should receive a letter from the staff member prior to any legal action, in which they’ll explain their reasons for resigning.
If you receive such a letter, than you can hold a meeting with your employee to try and reach an amicable resolution.
An employee’s qualifying period
A member of staff must have 12 months of continuous service with your business to make a claim for unfair dismissal.
An employee will have to make a claim within six months of their termination of their contract with you. This time limit may be extended to 12 months in certain circumstances.
But employees can consider their contract with your business over if:
- They consider your conduct a breach of their contract.
- Your conduct suggests you’re undermining the relationship of confidence and trust necessary to sustain an employment contract.
- The behaviour of your business is unreasonable.
If the employee can demonstrate that their employer’s behaviour undermines the relationship of confidence and trust necessary to sustain an employment contract, the employee may consider bringing a claim to the Workplace Relations Commission.
The difference between constructive and unfair dismissal
There’s often some confusion for businesses when dealing with these two terms.
It’s important to understand the difference in the event you need to defend your case. Constructive dismissal arises when the employee terminates the employment contract without notice due to a serious breach of contract by the employer.
Unfair dismissal, however, is when you remove an employee from their job without complying with the principles of natural justice and fair procedures as set out in the Unfair Dismissals Acts 1997 - 2015.
