What is the difference between Unfair Dismissal and Constructive Dismissal?

This article seeks to give an overview of the differences between Unfair Dismissal and Constructive Dismissal.

Basic Differences

The main difference between the two is how the employee has left their former employment. The charge of unfair dismissal requires an employer to have dismissed an employee on grounds that were unreasonable and therefore unfair. The employment can end in the form of a notice coming to an end, when an employee is terminated without notice or when a fixed-term contract comes to an end. The claim will be that the employer has either failed to follow a reasonable procedure or that the reason for dismissal is not fair. There are five fair reasons for dismissal due to misconduct, poor performance, redundancy, breach of a statutory restriction or some other substantial reason.

The charge of constructive dismissal requires an employee to resign his post because the actions of the employer have made it intolerable for the employee to continue working for them ie there is a serious breach of their contract of employment. Although there is no actual dismissal, the actions of the employer are sufficiently bad that the employee regards themselves as having been dismissed.

Constructive dismissal is more difficult to prove than unfair dismissal as it is usually more obvious if an employer has dismissed someone unfairly, for example, if the employer dismissed without following their procedures for poor performance. An employee who has resigned on the grounds of an intolerable work environment is more subjective and therefore more difficult to prove. Examples would be harassment or bullying, changing terms and conditions of employment without consent, falsely accusing an employee of misconduct.

Length of Service

Both unfair dismissal and constructive dismissal require the employee to have completed two years service to make a claim but there are some dismissals that are considered automatically unfair and the employee doesn’t need any length of service to make a claim eg pregnancy or maternity leave, whistleblowing, membership of a trade union.

Difference in Remedies

Constructive dismissal is not a claim in itself but would be treated as an unfair dismissal and/ or wrongful dismissal by the tribunal. The remedy for constructive dismissal would be made up of a basic award and a compensatory award.

The basic award is calculated by reference to your period of continuous service, your age, and your weekly pay. Further compensatory award, that is ‘just and equitable’ would be based on the severity of the actions by the former employer awarded to the employee up to a maximum statutory amount.

Should unfair dismissal be proved, the tribunal may make an order of reinstatement for an employee to re-take the position they formerly held and for the employer to compensate any loss of earnings from the date an employee was dismissed.

A tribunal can also make an order of re-engagement, where an employee is returned to a similar role as their previous position, again with any loss of earnings to be reimbursed to the employee.

If, however, an employee that has been unfairly dismissed and does not want to return or cannot return to work for their former employer, they would be awarded a basic award and additional compensation instead depending on the facts of the case.

Similar Process

Despite their differences in cause and outcome, both unfair dismissal and constructive dismissal require the same process.

There is a similar deadline for both to be presented before an employment tribunal of three months minus a day from dismissal or resignation.

Before any application to the employment tribunal can be made, a former employee must attempt early conciliation through the independent body of ACAS, which will in effect ‘stop the clock’ on the time limit set.

It is strongly advised that legal advice be sought before the employment tribunal process begins. Our Team can provide you with expert legal guidance, tailored to your situation. If you want to start a conversation about your legal needs, contact Liz Watt or Neil at 01905 900 919, or email them via liz@bradleyhayneslaw.co.uk or neil@bradleyhayneslaw.co.uk respectively.