However, where an employer commits a serious breach of an express or
implied term of the contract of employment (known as a “repudiatory
breach”), then the employee will have the option to either:
- accept the breach and continue their employment; or
- resign in response to the breach.
the employee chooses to resign, they will be treated as being
constructively dismissed - which means that although they resigned,
their resignation is construed in law as being a dismissal by their
The consequence of this is that the employee may have a claim arising from that constructive dismissal.
they choose to resign without notice, then they will be able to bring a
claim against the employer for the pay which the employee would have
earned over the period of notice which the employer would have had to
give them if the employer had ended the employment – known as a wrongful
Also, because in law the employee is deemed to
have been dismissed, they may be entitled to bring other claims, in the
same way they would have been able to if the employer had actually
dismissed them – for example, if at the time their employment ends, the
employee has worked for their employer for at least two years, then they
will be able to bring a claim in the employment tribunal for unfair
The duty of trust and confidence
Constructive dismissal claims often arise out of an alleged breach by the employer of the implied duty of trust and confidence.
is a term which is implied into every employment contract and it places
a duty on the employer not to conduct themselves in a way which is
calculated or likely to destroy or seriously damage the relationship of
trust and confidence between the employer and employee, unless the
employer has reasonable and proper cause for behaving in that way.
an employer breaches this duty, this will constitute a repudiatory
breach of the contract of employment and the employee will then have the
option, if they so choose, of resigning and bringing a claim arising
from that constructive dismissal.
Some examples of conduct by
employers which the courts and employment tribunals have said amounts to
a breach of the implied term of trust and confidence include:
- suspending an individual from work without reasonable or proper cause
- fundamentally changing the nature of an employee’s position or role and doing so without the employee’s agreement
- making false or unjustified allegations against the employee
- imposing a final written warning with justification
- reducing an employee’s pay without their consent
- unlawfully discriminating against the employee
- raising performance issues while the employee is on sick leave
- publicly reprimanding an employee, and
- imposing an excessive workload that could foreseeably cause mental or physical injury.
Upton-Hansen Architects v Gyftaki
mentioned above, where an individual is constructively dismissed, then
because the law treats the employee’s resignation as a dismissal, this
means that if the employee has two years’ service or more, they can
bring a claim of unfair dismissal.
In an unfair dismissal claim,
once it has been decided by the employment tribunal that the employee
was dismissed, the employer than has to satisfy the tribunal that the
reason for that dismissal was one of the potentially fair reasons set
out in the Employment Rights Act 1996 – namely (a) conduct or (b)
capability or (c) redundancy or (d) that continuing to employ the
individual would have placed the employer in breach of a statutory duty
or (e) the employer had some other substantial reason for dismissing the
The recent case of Upton-Hansen Architects v Gyftaki
serves as an important reminder to employers of the steps they need to
take to defend an unfair dismissal case which arises out of an
allegation by the employee that they have been constructively dismissed.
Architects suspended Ms Gyftaki and she resigned from her employment in
response. Ms Gyftaki claimed that the act of suspending her amounted to
a breach of the implied term of trust and confidence and she brought an
employment tribunal claim, stating that she had been constructively
dismissed and that that dismissal was unfair.
What this case
demonstrated was that when drafting a defence to an employment tribunal
claim of constructive dismissal, the employer not only needs to set out
why its conduct should not be regarded as having been in breach of the
employee’s contract. The employer also has to be ready for the tribunal
deciding that in fact the employer’s conduct was in breach of the
employment contract and so the defence also needs to argue that the
reason for the employer’s conduct was one of the five potentially fair
reasons for dismissal mentioned above. If the employer’s defence does
not do this, then if the tribunal decides that the employee was
constructively dismissed, it will then also inevitably conclude that the
dismissal was an unfair one.
The lesson to be learnt
defending a constructive unfair dismissal claim can be a difficult task
- an employee is unlikely to leave their job and then risk the time and
expense associated with bringing an employment tribunal claim unless
they have significant cause to do so.
There are two particular lessons employers can learn from the Upton-Hansen case:
suspending an employee from work, carefully consider whether there is
reasonable and proper cause to suspend – is it the most effective
response to the situation you’re facing?
- if you do find yourself
having to draft an employment tribunal response to a claim of
constructive unfair dismissal, then make sure your defence includes all
the necessary elements. Firstly, argue that the conduct which the
employee relies upon to establish a breach of the contract wasn’t
actually a breach. Secondly, argue that even if the constructive
dismissal can be established, the dismissal was nonetheless for one of
the potentially fair reasons and also argue that your conduct was a
reasonable way for you to behave.
In the words of Bon Jovi (and whether you’re keen on that band or not)….you’ve gotta have a reason.