Constructive Dismissal

Successfully representing a client against a well known insurance and financial services group in a claim for unfair constructive dismissal.

Our client was one of the company’s top sales consultants with a substantial remuneration package. The client’s bonus structure depended to a large extent upon a system of points which was an internal control measure to identify potential risks to customers. Our client was required to attend a disciplinary hearing with her employer but no disciplinary action was required or taken. However, prior to the disciplinary hearing points under the internal control system were added to her score increasing her risk factor to the highest level. The employer would not remove the points and, as a consequence, the client’s quarterly bonuses were significantly affected and so was her pension and an annual travel award. The client tried, unsuccessfully, to resolve the matter internally with her employer but had no success and therefore resigned on the basis of constructive dismissal.

The Tribunal held that the employer’s refusal to provide an explanation for the recording of the points and/or the repeated refusal to remove them, notwithstanding assurances by the employer that the matter would be resolved, was a breach of the implied term of trust and confidence. It was held that the employer had a duty to clearly explain how the points were allocated and which scale was used and that it was a breach of trust and confidence not to do so. Furthermore, once allocated there had been a complete failure on the part of the employer to explain how long the points were likely to last and how they could be removed.

The Tribunal upheld our client’s claim following a hearing and found that the employer had breached the implied term of trust and confidence by its actions, that the employee had resigned in response to the breach and had acted promptly in doing so. A significant financial settlement was negotiated for our client following the outcome of the Tribunal hearing.