Constructive Unfair Dismissal vs Actual Unfair Dismissal

Constructive unfair dismissal and actual unfair dismissal are often confused and misinterpreted.

Whether an employee has been constructively unfairly dismissed or unfairly dismissed very much depends on whether they have resigned as a result of a fundamental breach of the employment contract or whether the employee’s employment contract has been terminated by their employer.

Unfair dismissal

In order for an employer to show that the dismissal is fair they must be able to satisfy the following:

• The reason for dismissal was for a potentially fair reason.
• They acted reasonably in treating that reason as a sufficient reason for dismissal.
• A dismissal was procedurally fair.

The following are potentially fair reasons for dismissal:

• Capability or qualifications, i.e. an employee who is unable to do their job properly
• Conduct i.e. theft.
• Redundancy 
• Breach of a statutory duty or restriction. This is where an employer would be breaking the law if they continued to employ an individual.  For example where a driver loses their licence.
• Some other substantial reason (SOSR). This could include a personality clash between two employees or even where an employee is sent to prison.

Constructive Unfair Dismissal

Constructive dismissal is when an employee has no option but to leave their employment against their will because of their employer’s conduct. There must be fundamental breach of the contract of employment. For instance where:

• An employer fails to pay the employee their salary
• An employer suddenly demotes an employee.

In most circumstances, it is advisable to raise a grievance in order to try and resolve any issues.

If matters are not resolved, it is advisable for an employee, who feels that there has been a fundamental breach of their contract of employment, to resign immediately as an employer may argue that by continuing to work, the employee accepted the treatment.