Financial Compensation In The Case Of Constructive Dismissal

What is constructive dismissal?

Constructive dismissal is widely defined as “a situation in the workplace, which has been created by the employer, and which renders the continuation of the employment relationship intolerable for the employee – to such an extent that the employee has no other option available but to resign.” It is therefore clear from the definition that constructive dismissal is never voluntarily or willingly, an employee who resigns for other reasons cannot claim constructive dismissal. In such cases, the onus is on the employee to prove that he/she had no other option but to resign as there was no other way of resolving the matter. While some argue that there are grey areas and subjectivity in such matters, it is possible to prove constructive dismissal. Although these conditions may vary slightly in various parts of the world, the basis remains the same. Some examples of constructive dismissal may be; bullying or discrimination against an employee, disregard for an employee’s concerns or grievances and making unreasonable changes to working patterns or the place of work without prior agreement. Of course, many other examples of constructive dismissal exist, as the context and elements in each case do differ.

To improve your chances of winning a constructive dismissal case, you must be able to show that:

  • The employment conditions had become so intolerable that you, as the employee, could not continue and had no other option but to resign
  • The intolerable conditions are truly what forced you to resign
  • There was no other alternative for you at the time than to resign to avoid having to be in such a workplace and be subjected to the treatment
  • The intolerable conditions must have been caused by the employer
  • The employer must have been in control of the circumstances

Employer obligations

One of the major concerns in the case of constructive dismissal, especially from the employee’s side and having to make a living, is the financial aspect. While those that are fortunate enough to have some knowledge about forex markets can dabble in that in the interim, the harsh reality of having to make ends meet while searching for a new job exists. This is also why some people have been turning to forex or stock trading as an alternative source of income or investment option. Given the current global conditions and the higher unemployment rate in most parts of the world, finding a new job can take some time. It is mostly for this reason that if an employee does win the case and the situation is confirmed as a case of constructive dismissal by law, then the employer will have to financially compensate the employee. As previously noted, it is important to check which regulations apply in your country, as these may differ across the globe.  In some cases, an employer may be obligated to financially compensate the employee by paying them a salary for three months post-employment. In other cases, the employer may have to pay the employee out and cover the remaining month of the contract. For example, if the employee was under a 2-year contract and the constructive dismissal claim was made 18 months into the term, then the employer would have to pay him/her out for the remaining 6 months of the contract agreement.

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