Protecting Your Business Against Constructive Dismissal Claims

Protecting Your Business Against Constructive Dismissal Claims

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Businesses operating on a smaller scale tend to constantly make changes to their company when they are starting out. They have to do that for a number of reasons. Their client base might have changing demands, the economic conditions may be shifting at an early stage and then of course there is the advent of advancing technologies to consider. A lot of factors come into play, forcing small businesses to make changes, which they might or might not have predicted.
Protecting Your Business Against Constructive Dismissal Claims

The thing with such a drastically changing landscape in the working environment can affect the roles and responsibilities of your employees. With these changes, it can sometimes become difficult to ensure that your employees are assured of their position, their pay grade and they have the adequate level of responsibilities within the company. The problem comes when someone in the workforce feels the need to file for a constructive dismissal claim.

What is Constructive Dismissal?

Constructive dismissal is the sort of situation where an employer does not terminate the job of an employee. Hypothetically, the employer in this situation makes the work place unsuitable for the employee they want to leave. That could be done by changing certain terms in the employee’s contract, changing their responsibilities without warning or simply constituting to bullying in any form. There are a number of ways in which an employer can make the conditions unbearable for the employee and force them to consider resignation.. Since the resignation under such circumstances cannot be considered voluntary, the courts will consider this as termination.

What is Constructive Dismissal Claim?

A constructive dismissal claim takes place when the employee is forced to leave the workplace because of certain changes being made to the responsibilities of the employee by the employer. The employee has to provide strong proof of a significant breach in the contractual agreement made by the employer for having created such circumstances. It is a very difficult claim for the employer to prove and get the decision in their favour but once that does happen, it can entail a lot of serious consequences for the employer. The damages that the employer can become liable to pay for — due to the wrongful dismissal claims and for unfair dismissal claims after 12 months of employment — can become surmountable.

Circumstances Under Which Employees Can File for Constructive Dismissal Claims

There are mainly two types of scenarios in which employees can file for constructive dismissal claims:
1. Intolerable workplace:
The work place has become intolerable for the employee to be able to work in any longer or the employer has started treating the employee in a manner where there is no other choice for the  employee but to leave. This could include any sort of bullying, harassment or other sort of behaviour inappropriate for a workplace.

  1. Unilateral change of certain terms of employment:
    A unilateral change in terms is the sort of change that the employer makes a significant change in the terms of the agreement with the employee without prior consent. This sort of change has to be significantly detrimental to the employee to qualify as a means to file claims. The primary way to see whether or not it is such a change is to determine whether any reasonable person would consider the change in terms affected the essential terms of their employment.

Prevention of Constructive Dismissal Claims

As a small business owner, there are a few ways in which you can ensure that you leave no levee for the people in your company’s employ to file constructive dismissal claims against your company.

  • Make sure that you have a healthy and respectful working environment in your company that is free of any sort of bullying, hostility and harassment;
  • Ensure that the changes which you have to make in the company and are affecting the employees in your company are completely legitimate and for the betterment of the company and subsequently for them as well;
  • Talk to your employees before implementing any significant change in the company that will affect their roles and responsibilities;
  • When offering an employee a different position in the company, make sure that the responsibilities the new position entails and the compensation they will receive are adequate for the employee;
  • If you absolutely have to make a unilateral change in your company, make sure that your employers are given the due notice before implementing that change;
  • Make sure that the terms of agreement in the employment contract clearly state beforehand that you have the right to implement unilateral changes.

Always try to treat your employees with the utmost respect and honesty. Your good faith and trust in them and their abilities will only be reflected by the employees in their willingness to perform better for the company. Of course, making significant changes is something that is very likely to happen in a small company. The process is complex when you have to take all the possible legal ramifications of discrepancies into account.

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