Recent decisions of the Labour Court have reconfirmed the high bar to be reached by employees when making a claim for constructive dismissal. This month, Rachael Evans breaks down the key employment law issues and considerations that arise when addressing constructive dismissal claims - from both an employer and employee perspective.

1. What is constructive dismissal?
2. Who bears the burden of proof in constructive dismissal cases?
3. In what circumstances will an employee resignation be considered to be a constructive dismissal?
4. If an employee does not submit a grievance prior to their resignation will their constructive dismissal claim automatically fail?
5. When will a resignation without a formal grievance still meet the threshold for demonstrating a constructive dismissal?
   
   

Q. What is constructive dismissal?

Constructive dismissal under Section 1 of the Unfair Dismissals Act is defined as:

"The termination by the employee of his contract of employment with his 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…"

In short, a constructive dismissal case may arise where the employee felt their employer's conduct was so untenable that they had no option but to resign or, again as a result of employer conduct, the employee has suffered a repudiatory breach of their terms and conditions of employment.

Q. Who bears the burden of proof in constructive dismissal cases?

Unlike unfair dismissal claims, the burden of proof in the context of constructive dismissal claims lies with the employee. So, in order to shift this burden to their employer, an employee must be in a position to demonstrate that their conditions and treatment in the workplace were so intolerable and intractable that they had no other reasonable option but to involuntarily resign.

The burden of proof in such cases is an onerous one, in that the employee must prove not only that the employer's behaviour was unreasonable, but also that the employee's response in resigning was reasonable.

Before embarking on this course of action it is important that the employee exhausts all other avenues, in particular any existing internal harassment or grievance procedures.

Q. In what circumstances will an employee resignation be considered to be a constructive dismissal?

Recently the Labour Court in its decision in Cedarglade Limited v Tina Hliban (UD/17/45, ADJ-00006881) outlined two situations in which an employee resignation may amount to a situation of constructive dismissal:

(i) Where the employer’s conduct amounts to a repudiatory breach of the contract of employment and in such circumstances the employee would be “entitled” to resign from his position. This situation requires the employer to be 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", as held in Western Excavating (ECC) Ltd v Sharp ([1978] IRL 332).

(ii) An additional reasonableness test asks whether the employer "conducted his or her affairs in relation to the employee so unreasonably that the employee cannot fairly be expected to put up with it any longer and, if so, she is justified in leaving".

In another recent Labour Court case (Kaydee Cosmetics Limited v Elizabeth Blake (UD 18/49)), the employee alleged that her treatment by the employer was so oppressive that she could not reasonably be expected to tolerate it. However, in dismissing her complaint, the Labour Court found that, although there were tensions in the employment relationship, these were being addressed by the employer – albeit imperfectly. Significantly, the Labour Court found that the employer's behaviour had not been oppressive, as alleged, and no fundamental breach of the employment contract had taken place.

Q. If an employee does not submit a grievance prior to their resignation will their constructive dismissal claim automatically fail?

Not necessarily. Each case will be confined to its particular facts. However, an employee's failure to engage with internal procedures, for example a grievance procedure, before taking the nuclear step of resigning, will be a significant factor in the WRC's assessment of the reasonableness of the employee's behaviour.

The EAT in Conway v Ulster Bank (UD474/1981) outlined that it is unreasonable for an employee to resign without having first substantially utilised the employer's grievance procedure in an attempt to remedy the complaint. Similarly in O'Gorman v Glen Tyre Company Limited(UD2314/2010)it was noted that it is crucial in a constructive dismissal case that the claimant informs the employer fully of the complaints being made against it and that the employer be given an opportunity to resolve the issues.

Q. When will a resignation without a formal grievance still meet the threshold for demonstrating a constructive dismissal?

In Cedarglade the Labour Court accepted that there can be situations where a failure to give prior formal notice of a grievance will not be fatal (for examples of these cases, see Liz Allen v Independent Newspapers [2002] 13 ELR 84, Moy v Moog Ltd [2002] 13 ELR 261 and Monaghan v Sherry Bros [2003] 14 ELR 293). Situations where the employer does not have a grievance procedure, or where the employee had never been made aware of the existence of the employer's grievance procedure will be relevant in the WRC's assessment of whether an employee is reasonably expected to raise a grievance prior to resignation.