Constructive Dismissal in Employment Law

Introduction

Employment law recognizes constructive dismissal as a reason why an employee may seek legal action against their employer. Constructive dismissal, which is also known as constructive termination, is whereby an employee resigns due to their employer’s conduct or misconduct. If an employer creates a harsh working environment such that employees are compelled to quit, the employer is said to be in a repudiatory breach. A hostile working environment includes sexual harassment, bullying, and substantial pay cuts. Constructive termination is classified as unfair dismissal since resignation did not occur out of the employee’s volition. If an employee believes they have been unfairly dismissed, they can present their case before an industrial tribunal, which will rule on the matter.

Case Summary

Mr. McConnell and Mr. Richmond are two salesmen who work for Goold Pearmak Limited Company. They received compensation in the form of a salary and commission until 1992 when the company came under new management. Soon after this, the two employees realized that their pay had been reduced significantly. They spoke to their manager about the issue, but the situation did not improve. One of the employees presented his complaints before one of the company’s top managers, Mr. Maloney, but was dismissed. The salesmen also asked to be allowed a meeting with the company chairman; the request was not granted. The workers then informed their employers that they would claim constructive dismissal unless the employers were prepared to negotiate favorable terms with the employees. Mr. Maloney later offered a salary increase, but it was not enough to cover the employees’ deficits. The employees once again tried to meet with the chairman but were unsuccessful, which led to their resignation. The two salesmen won their constructive termination case in the industrial tribunal court. When the employers appealed, the appeal tribunal upheld the initial verdict.

Basis for Winning

Mr. McConnell and Mr. Richmond won because they could prove all the elements of constructive termination. A constructive dismissal claim necessitates an employee to demonstrate that their employer violated a fundamental term of the contract of employment. In this case, a contract had not been signed between the company and its workers. However, the tribunal ruled that in the absence of a written contract, the terms of the contract would be implied. For instance, the court maintained that employees have the right to a channel for raising grievances; this right is implied in the contract of employment. The company did not provide a clear channel of grievance. Additionally, the employers dismissed their employees’ grievances when raised. Consequently, the tribunal determined that this constituted a breach on the part of the employers. By failing to hear out their salesmen’s complaints, the company was in repudiatory breach.

Aside from proving breach of contract, employees are required to show that they informed their employer of the situation and gave them enough time to act. The law stipulates that employees should provide their employers with sufficient time to remedy a breach. Mr. McConnell and Mr. Richmond gave the company ample time to act after raising the issue. Initially, they asked their manager to intervene, but nothing changed; they continued to receive low compensation for their labor. Next, one of the employees met with Mr. Maloney who dismissed their concerns. They also tried speaking with the chairman, but their request was denied. The two salesmen won at the tribunal court because they gave their employers over a month to resolve the matter. The law allows workers to terminate the contract if their employer does not remedy a breach of the contract given sufficient time to do so. Thus, the two employees won because they could substantiate their claim.

Fairness of the Outcome

The outcome was just but only to a certain extent. It was fair because the employers had breached the employment contract and failed to undertake any action even when given enough time to act. However, the ruling dismissed the claim that the employees had overextended their stay at the company. Employment law holds that employees should leave their place of employment within a reasonable time after issuing a notice of constructive criticism. Failure to do so would mean that the employees can no longer claim constructive dismissal.

The ruling was unjust because Mr. McConnell and Mr Richmond remained at work for three more weeks after submitting their claim of constructive dismissal. The court ruled that the employees prolonged their employment due to frustration and because they were hopeful that they would get an opportunity to present their grievances before the chairman. It was unjust for the appellate court to rule that the employees’ continued stay was not a valid defense for the employers.

Conclusion

In conclusion, an employee can claim constructive termination against their employer. If a worker informs their employer of an issue that makes it impossible for them to work and the employer takes no action, a court would rule that the employee was unfairly dismissed. Constructive termination relieves an employee of their duties because their work environment does not allow them to perform these responsibilities.

References

‘Dismissal: Your rights’ (Gov.uk, n.d.) Web.

Christo Bester, ‘The weakest link: Dismissals’ 2019(19016) Farmer’s Weekly 29

Edward Lazear, ‘Compensation and incentives in the workplace’ (2018) 32(3) Journal of Economic Perspectives 195

KL Kubjana and ME Manamela, ‘To order or not to order reinstatement as a remedy for constructive dismissal’ (2019) 40(2) Obiter 325

Lee Suk Ling and Guru Dhillon, ‘Managing employment dismissals in Malaysia and England–A legal guide (2018) 52 Jurnal Pengurusan 103

Mirjana Popovic, ‘Globalization and challenges of the modern world-constructive dismissal’ (2018) 264

Philippa Collins, “The inadequate protection of human rights in unfair dismissal law’ (2018) 47(4) Industrial Law Journal 504

Video Voice-over