A recent decision of the Workplace Relations Commission in April 2023 (Greg Clarke v Rentokil Initial Limited ADJ00036509) sets out a useful summary of the law in respect of constructive dismissal.
What is Constructive Dismissal?
Section 1 (b) of the Unfair Dismissals Act defines ‘dismissal’ for the purposes of the Act in circumstances where:
(b)the termination by the employee of his contract of employment with his employer, whether prior notice of the termination was or was not given to the employer, in circumstances in which, because of the conduct of the employer, the employee was or would have been entitled, or it was or would have been reasonable for the employee, to terminate the contract of employment without giving prior notice of the termination to the employer
Section 6(1) of the Act provides that a dismissal of an employee shall be an unfair dismissal unless there were substantial grounds justifying the dismissal.
Tests for Constructive Dismissal
In order to succeed in a claim of constructive dismissal under the Act, an employee must demonstrate that his decision to resign from his/her employment resulted from either a repudiatory breach of his contract of employment by the employer or such unreasonable behaviour by the employer that he could not fairly be expected to put up with it any longer.
(1) Was there a repudiatory or fundamental breach of the employee’s contract of employment?
To amount to a repudiatory breach, the employer’s breach has to constitute a fundamental or basic breach of the employment contract. If an employee decides to repudiate the contract by resigning, the employee should do this in a timely manner as continuing to work may be taken to amount to an affirmation.
The test by which a repudiatory breach of contract can be identified was set out by Lord Denning M.R. in Western Excavating Limited (ECC) v Sharp [1978] IRLR 332as follows:
“If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance.”
(2) Was the employer’s behaviour such that it was reasonable for an employee to resign?
The second question asks whether the employee is entitled to terminate his employment because of the actions of his employer. The Workplace Relations Commission must look at the conduct or behaviour of both parties. Crucially the Workplace Relations Commission often looks at the events leading up to the termination of the complainant’s employment.
When is it reasonable for an employee to resign?
The Workplace Relations Commission look at whether a threshold has been crossed so as to damage the relationship to such an extent that it was reasonable for an employee to resign.
The Act places a high burden on an employee in a constructive dismissal case. In order to succeed in such a claim, the employee must establish that the employer’s unreasonable behaviour was such that he was justified in believing that he could not continue any longer in that employment.
An employee must alert the employer to his situation by availing of the grievance procedure, where one exists, in order to allow the employer an opportunity to rectify the problem before resigning. A failure to invoke the employer’s grievance procedure can be fatal to a complaint of constructive unfair dismissal.
An employee is normally expected to be able to demonstrate that having brought a concern to his employer’s attention that he gave the employer a reasonable opportunity to address those concerns before resigning.
CaseLaw Learning Tip
This case is a timely reminder to employees to try and exhaust a company’s grievance procedure before resigning. In some cases it may be fatal to the claim if the employee doesn’t lodge a formal complaint or grievance as an employer may not be aware of any concern/issues the employee has unless they are brought to their attention.
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