The recent decision of the Labour Court to set aside a Workplace Relations Commission (WRC) determination in a constructive dismissal case serves yet again to underline the complexity associated with this area of employment law. Explaining the rationale behind its decision, the Court pointed out that a complainant in such scenarios ‘faces a high bar’ in establishing that it is reasonable to resign in response to an employer’s alleged unreasonable conduct and/or breach of contract. In this case the Court reminded parties that the ‘complainant is expected to exhaust all internal procedures available’, to give the respondent employer ‘an opportunity to address any reasonable concerns before resigning’.

Having previously reviewed the case evidence, the WRC’s Adjudication Officer (AO) noted that he ‘had to think very carefully prior to making a decision’. In this case, Catering Assistant Mary Walshe resigned further to receipt of a final disciplinary warning, opting not to avail of the respondent’s appeal process. She explained that ‘there was no point in going through that degrading process again when it was unlikely that the Directors decision would have been overturned’. The AO accepted this logic. However, the Labour Court did not, finding that as the: ‘complainant was informed in writing of her right to appeal but chose not to do so, she cannot be said to have exhausted the internal procedures available to her before resigning’, thus failing to meet the aforementioned ‘high bar’ (Walshe v Get Fresh Vending Ltd. UDD2142).

A Constructive Dismissal

A ‘constructive dismissal’ is a scenario where it is deemed reasonable for an employee to resign. This resignation is attributable to the employer's conduct and may include a unilateral and fundamental change to the employee’s terms and conditions. Section 1 of the Unfair Dismissals Act defines constructive dismissal as: ‘The termination by the employee of his contract of employment … 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’.

In practice, constructive dismissal claims tend to arise where there is:

• A serious breach of contract (such as not paying or demoting an employee without reason);
• Forcing one to accept unreasonable changes to employment conditions (e.g. changing one’s shift pattern);
• Allowing bullying or harassment behaviour to go unchecked;
• Making one work in dangerous conditions;
• Making false accusations, such as fraud or misconduct.

The key precedent for such scenarios dates back to 1978, when the UK Court of Appeal (in Western Excavating EEC Ltd. v Sharp I.R.L.R. 72) based its determination on the ‘contract’ and the ‘reasonableness’ tests. The ‘contract test’ is one where the employer’s conduct constitutes 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 that contract. The ‘reasonableness test’ assesses the conduct of the employer and whether the conduct is so unreasonable that the employee cannot fairly be expected to tolerate it and is justified in leaving.

The application of these tests to constructive dismissal claims is now normal. For example, in 2018 the Labour Court (in Cedarglade Ltd. v Hliban – UDD1843) confirmed these criteria when determining whether a resignation constituted a constructive dismissal:

1. The ‘contract test’ focused on whether the employer’s conduct amounted to a repudiatory breach of the contract of employment, showing that the employer ‘no longer intends to be bound by one or more of the essential terms of the contract’.
2. The ‘reasonableness test’ focused on 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’.

Burden of Proof

In contrast with standard unfair dismissal claims, case precedent confirms that in a constructive dismissal case, the employee bears the burden of proof. As noted above, this can be a high threshold to meet. For example, not only must one show that the employer's behaviour was unreasonable, but one must also show that their decision to resign was a reasonable one in the circumstances. This was evident from the (seminal and frequently relied upon) Berber v Dunnes Stores 2009 E.L.R. 61 Supreme Court judgement, where it was held that the conduct of the employer must be unreasonable and without proper cause and its effect on the employee must be judged objectively, reasonably and sensibly in order to determine if it is such that the employee cannot be expected to put up with it.

Using The Procedure

Related thereto, as noted above, it is normally - but not always – expected that for a claim to succeed the employee must have exhausted internal procedures prior to resigning. For example, in Conway v Ulster Bank (UD474/1981), the Employment Appeals Tribunal held that: ‘the claimant did not act reasonably in resigning without first having substantially utilised the grievance procedure to attempt to remedy her complaints. An elaborate grievance procedure existed but the claimant did not use it. It is not for the Tribunal to say whether using this procedure would have produced a decision more favourable to her but it is possible’. This requirement subsequently featured in many Tribunal determinations, serving to confirm that a claimant’s failure to explore resolutions under a respondent’s grievance procedure can contribute to their claim not being well founded – see Zabiello v Ashbrook Facility Management Ltd. UD1106/2008; An Employee v An Employer (UD1421/2008).

Indeed, the point was well emphasised in Travers v MBNA Ireland Ltd (UD720/2006), where the Tribunal held that: ‘the claimant did not exhaust the grievance procedure made available to him by the respondent and this proves fatal to the claimant’s case .. In constructive dismissal cases it is incumbent for a claimant to utilise all internal remedies made available to him unless good cause can be shown that the remedy or appeal process is unfair’. A decade on, in Barry v HSE (2016 27E.L.R. 268), the Tribunal was still emphasising this point, when its decision focused on the fact that the claimant did not give her employer an opportunity to deal with her complaint.

Likewise, in WRC decisions, this consideration tends to be consequential. For example, in 2017 an AO held that ‘prior to an involuntary resignation/departure an employee must exhaust all reasonable attempts to resolve their complaints and grievances with their employer. As an initial step an employee must inform their employer of the issues causing those complaints and grievances. Making the employer aware of them allows the respondent to address those concerns. There is no evidence that this initial step was undertaken in any real way by the complainant prior to his departure, despite the existence of a formal Grievance Policy, known to the Complainant (ADJ-00003817). Much more recently, in 2020, a WRC’s AO held that a Chartered Physiotherapist ‘did not take the time to formalise a grievance prior to her departure’. Hence, it was adjudged that ‘it was unreasonable for her to leave’ (ADJ-00023518).

However, where the procedure is invoked, the employer’s obligation to activate it is an imperative. For example, in 2020 the Labour Court found that the employer failed to follow its own procedure in dealing with a complaint and concluded that it undermined an explicitly stated core element of the contract of employment, amounting to a repudiatory breach of that contract and an unfair (constructive) dismissal (G4S Secure Solutions v Charana UDD2022). Shortly thereafter, the Court endorsed this requirement, in the Rehab Group v Roberts (UDD2026) case, finding it ‘clear that the behaviour of the Respondent in not dealing with a complaint by the Complainant was unreasonable behaviour such that it was reasonable for the Complainant to resign from her employment’.

Constructive Dismissal Complexity

However, the aforementioned complexity associated with constructive dismissal scenarios is apparent from the fact that such claims don’t necessarily fail because one doesn’t use the grievance procedure. That is, each case must be assessed on its own facts (see Allen v Independent Newspapers 2002 13 ELR 84; Moy v Moog Ltd. 2002 13 ELR 261; Monaghan v Sherry Bros. 2003 14 ELR 293). Related thereto, in 2020 the Labour Court pointed out that in constructive dismissal cases it must examine the conduct of both parties and in normal circumstances a complainant invoking the ‘reasonableness test’ in furtherance of a claim must also act reasonably by providing the employer with an opportunity to address whatever grievance they may have. That is: ‘they must normally demonstrate that they have pursued their grievance through the procedures laid down in the contract of employment before resigning’ (Office and Industrial Cleaners v Connolly UDD2015).

Notably, in this case the Court considered the decision in the aforementioned Allen v Independent Newspapers case, where it was held that it was reasonable for the complainant in the (Allen) case not to have faith in her employer’s ability to effectively address her grievances. However, in the UDD2015 case, the Court was not satisfied that there were factors present which might have led the complainant to believe she would not be afforded fair procedure by the respondent

Avoiding Constructive Dismissal

In conclusion, to minimise the prospect of a successful constructive dismissal claim, employers should ensure that staff are aware of and can avail of the organisation’s grievance and related appeals’ procedures. This is important as a means of showing a willingness to address an employee’s concerns. Other components - for protective purposes – that are worthy of consideration, may include:

1. engaging a senior member of management with no prior involvement in a case to investigate the employee’s concerns;
2. showing an openness to mediation for the resolution of any differences;
3. asking the employee to reconsider their resignation decision (and where relevant, to (re)consider usage of the internal procedures) and
4. enabling access to the organisation’s Employee Assistance Programme.

These options may well prove beneficial, as evidence of an employer's willingness to engage with the employee, for the purpose of addressing grievances and the maintenance of the employment relationship.