'Constructive' Dismissal

If an employer significantly changes a fundamental term of employment without the employee's agreement, the employee may be entitled to consider that the employer has fundamentally breached the contract of employment (again, that is so even if there is no written contract). For example, if the employer were to reduce the rate of pay without the employee's agreement, that could be considered "constructive dismissal". In those cases, the employee may then accept that the contract has been brought to an end and may sue the employer for wrongful dismissal.

This is an area of law that is fairly complicated and we highly recommend that employees who feel they have been "constructively dismissed" seek legal advice before acting. There are difficult legal issues around whether the change imposed by the employer constitutes constructive dismissal and as to how the employee may discharge his or her obligation to mitigate losses. We do not recommend that any employee should assume constructive dismissal has taken place without obtaining advice.