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What is Constructive Dismissal?

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  • Written By: Jessica Ellis
  • Edited By: Bronwyn Harris
  • Last Modified Date: 06 December 2016
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Constructive dismissal is a legal term used to describe a situation in which a worker has left his or her job because of an employer's illegal behavior or actions. In a situation where an employer refuses to alter or correct illegal or unlawful behavior, an employee may have no choice but to leave work as the employer is breaching his or her contract, making the job technically invalid. There are extensive rules and regulations regarding constructive dismissal; those considering leaving a job under this law may wish to consult a lawyer to ensure that the process is legal and valid in the region.

When a person signs an employment contract, he or she is agreeing to abide by company rules, perform the specific duties of a job, and accept the terms of compensation. It is important to remember that, just as an employee is responsible for sticking to the terms of the contract, so is the employer responsible for following rules, paying wages, and abiding by laws and company policy. Constructive dismissal is usually the result of an employer refusing to stick to his or her side of the deal, thereby potentially nullifying the contract.

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There are many reasons an employee may resign under constructive dismissal laws. If an employer refuses to pay wages or suddenly unlawfully lowers wages, harasses employees in a sexual, physical, or verbal manner, forbids earned vacations, or sabotages employee work, he or she may cause the constructive dismissal of employees. Other breaches include refusing to provide safe working conditions, forcing a sudden change of job hours and location, or wrongly accusing an employee of misconduct.

Though laws may vary, constructive dismissal can generally be applied to one breach of a contract or a series of breaches, though some courts require that an employee leave his or her job within a short time frame of the latest breach. Otherwise, it can be argued that the employee was content to stay in the job under an employer's unfair conditions and was not motivated by a specific breach of contract.

Constructive dismissal lawsuits can result in high damages if proven. In some areas, employers may be forced to pay employee wages and compensate for the employee's loss of money while searching for a new job. Some courts may order guilty employers to pay attorney fees for the plaintiff, as well as a damages for emotional distress, as well as punitive damages meant merely to punish an employer for behaving unlawfully. Since the company may be held responsible for these damages, any employees who contributed to the creation of an unlawful situation also stand a good chance of being fired.

Since laws regarding allowable circumstances and time limits vary, it is extremely important to get legal counsel when planning a constructive dismissal lawsuit or fighting against one. Since there are so many gray areas where concrete proof is not possible, it is also important to get documentation of everything that may help prove or disprove a case. Dealing with a constructive dismissal suit can be difficult for all involved, causing feelings of resentment, frustration, and even depression. Some legal experts suggest visiting a counselor to help deal with the distressing issues surrounding this type of trial.

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