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Constructive dismissal occurs following a fundamental breach of contract by the employer, which cannot then rely on that contract in the future. Therefore, if an employee can show that they have been constructively dismissed, they may not be bound by post-terminatk restrictions in the contract, such as restrictive covenants preventing the employee from contacting the employer's clients. If an employee wants to avoid contractual restrictions - perhaps because they are joining a competitor - they might assert constructive dismissal

Constructive dismissal is far more difficult to prove than employees often think. First they must prove a fundamental (rather than minor) breach of contract by the employer. The employee must also show that their decision to terminate their employment was in response to the breach and not, for example, because they had been offered a more attractive job. An employment tribunal will also need to satisfy itself that the employee did not delay too long in ( resigning. A tribunal will usually expect an employee to have tried to resolve the complaint through the grievance procedure before jumping ship.

Constructive dismissal is not a claim in itself, but if a claimant who has resigned demonstrates that they have, in effect, been dismissed they can go on to claim unfair resigned in response to a fundamental breach of contract by the employer. The Employment Rights Act 1996 essentially says that if the employee terminates their contract in circumstances in which they are entitled to do so without notice because of the employer's conduct, that termination constitutes a dismissal Sometimes that conduct will be the breach of an express term of the contract of employment, such as the right to be paid a certain amount on a certain date. More commonly, it will be that the employer's behaviour has breached the term of mutual trust and confidence that is implied into all contracts of employment. The term basically requires employers to refrain from conducting themselves in a manner that is likely to destroy or seriously damage the relationship of trust and confidence between employer and employee. Examples of such conduct may include isolating the employee, humiliating them in front of others and falsely accusing the employee of misconduct.

Constructive dismissal occurs where an employee terminates their employment in response to their employer's treatment of them. Although there has been no ctual dismissal, the treatment is sufficiently bad that the employee is entitled to regard themselves as having been dismissed.