Partner Article

Booted out of employment? Let the employer sweat

Employers worry about the prospect of constructive dismissal claims.

In fact successful unfair constructive dismissal claims are quite rare, especially in well run businesses because underlying any claim for constructive dismissal has to be a breach of contract on the part of the employer – and no ordinary breach of contract.

This has to be a fundamental breach of contract which, as the expression goes, goes to the root of the contract. The employer’s conduct has to demonstrate that the employer no longer feels constrained by the fundamental terms of the employment bargain.

The most common form constructive dismissal claim (though not the only one) arises out of an alleged breach of the implied term of mutual trust and confidence. However, the test is a high hurdle to overcome. The employee must show that the employer has without reasonable and proper cause, conducted itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. One can see from this definition that there are three legs to a complete defence:

• “reasonable and proper cause”,
• the employee’s reaction was unreasonable
• the conduct was not intended to undermine the relationship of trust and confidence

Accordingly, for example, giving a blunt but fair annual appraisal does not amount to constructive dismissal because there is reasonable and proper cause. Failing to give a pay rise following a year of poor performance equally does not cause a constructive dismissal for the same reason. Employees who flounce out of meetings taking umbrage at innocuous comments do not have claims.

However, dealing with individuals inconsistently in terms of remuneration or discipline without proper reason can give rise to claims on the basis that dealing with employees fairly also involves dealing with them consistently.

Article written by Hamish Cameron Blackie of Goodyear Blackie Herrington LLP, a member law firm of UK200group.

This was posted in Bdaily's Members' News section by UK200Group .