When can a Jersey employee sue my business for constructive dismissal?

Under Jersey law constructive dismissal is where you, the employer, fundamentally breaches the employee’s contract of employment in some way.

The employee would then, in turn, have to resign his or her employment as a result of such breach, and not be deemed to have accepted the breach in any way.

What actually is constructive dismissal?

In the simplest of terms, a constructive dismissal claim is where your employee deemed your actions to have breached the employment contract so fundamentally that the employee is left with no other choice but to resign. The correct legal terminology for this type of claim is actually ‘constructive unfair dismissal’ as it falls under the category of unfair dismissal.

In what ways can my business be seen to have breached the employment contract?

Generally, Jersey constructive dismissal claims involve either a breach of express or implied terms. In essence the employee will be seeking to prove there has been for example a breach of the implied term of mutual trust and confidence in the contract of employment. This term underpins all employment relationships; it is where you, as an employer, deliberately and without good reason have acted in a way to destroy such trust.

What does the employee have to prove?

The employee must prove a fundamental (rather than minor) breach of contract by the employer, and the employee must also show that their decision to terminate their employment was in response to the breach.

Four basic elements must be present:

• The employer must be in breach of the contract of employment.
• The breach must be fundamental i.e. a repudiatory breach.
• The resignation must be a response to that breach.
• The employee must not delay too long in resigning following the breach. If he or she does then the tribunal may find that the breach has been waived.

It is not enough for the employee to show that you, the employer, has behaved unreasonably. There must be a fundamental breach to claim Jersey constructive dismissal.

Examples of a fundamental breach by employers which could lead to Jersey constructive dismissal include:

• Forcing a cut in salary or other benefits.
• Making it untenable for the employee to work by reason of your unreasonable attitude (this has to be serious enough).
• Imposing a disciplinary or performance process that is grossly unfair and disproportionate.
• Changing your employee’s role or duties without good reason.
• Suspending your employee without good reason.

Does the employee need to raise a grievance before resigning?

This will depend on the facts of the case in question. Constructive dismissal cases have been successful where the grievance process has been exhausted prior to resignation. But equally, a significant number have been unsuccessful because of a claimant’s failure to resign immediately.

What impact may this have on my business?

While claims can be difficult for the employee to prove, the potential impact to your business is not to be underestimated. Not only will a claim for Jersey constructive dismissal take up management time and associated costs, there is also the possibility of a substantial award being made against your business (both for wrongful dismissal and unfair dismissal) should the employee win the case. There is also the reputational impact such a claim may have on your business.

A Jersey employment tribunal will usually expect an employee to have tried to resolve the issue through the business’ grievance procedure before the employee claims Jersey constructive dismissal. Equally, they will expect you, as an employer, to take such issues seriously and ensure that a thorough and impartial investigation of such a grievance is carried out. Whilst a claim for constructive dismissal can be difficult to prove, there are many examples of Jersey employment law cases where employers have failed to spot basic warning signs and/or neglected to follow the correct procedures.