Constructive dismissal, also known as constructive discharge or constructive termination, refers to a situation in which an employee is effectively forced to resign from their job due to the employer's actions or behaviour, creating an intolerable work environment. In this scenario, the employer doesn't directly fire the employee but makes the conditions at work so unbearable that the employee has no choice but to resign.
The key element of constructive dismissal is that the resignation is not voluntary but rather a response to the employer's actions or changes in the employment conditions.
Constructive dismissals are broken down into three different categories:
Resign or I'll fire you: This category occurs when your employer gives you an ultimatum between resigning and being fired. However, such conversations are rarely in writing, making it challenging to provide evidence for your claim.
If your employer has presented you with this ultimatum, it's essential to try to get evidence of the conversation. Consider sending a text or email referring to the discussion, asking for clarification or additional information. This will help confirm that you were put in such a difficult position, and it gives your employer a chance to correct any misunderstandings.
Coercion: The second category involves your employer engaging in conduct with the clear intention of coercing you to resign. However, proving your employer's intent in such situations can be difficult.
To raise a personal grievance under this category, you'll need to show that your employer's actions were aimed at forcing you to resign. In reality, arguing your constructive dismissal under the third category might be more successful.
Breach of duty: This category arises when your employer's breach of duty becomes the reason for your resignation. However, there are specific legal requirements for this category:
Breach: Your employer must have significantly breached their duties, which could involve breaching the employment agreement, minimum entitlements, or the Employment Relations Act 2000.
Note that the breach of duty must be the direct reason for your resignation, and you should be able to pinpoint the event that led you to feel there was no other option but to resign.
To succeed in this category, you need to show a significant and sustained breach of duty. Smaller breaches may not justify your resignation, and the law expects you to give your employer a chance to remedy the situation before taking such a step.
Regarding cases of bullying and harassment, remember that the personal grievance is against the company, not the individual involved. You'll need to formally raise your concerns with your employer to provide them an opportunity to address the issue. Many successful constructive dismissal claims stem from an employer's failure to investigate these concerns rather than the harassment itself.
The law requires that you had no other option but to resign, which means you should explore alternative steps before making your decision. Ask yourself:
- Have you filed a formal complaint about the issues leading to your desire to resign?
- Have you given your employer the chance to rectify the situation?
- If you're still employed, could you seek legal representation to mediate the matter?
Good faith works both ways, requiring both parties to be active in maintaining the employment relationship. Engaging in difficult conversations about your employment conditions may be necessary, but having a supportive representative can make a significant difference in achieving your goals.
The bottom line is, you should only resign when you genuinely believe there's no other option available.