Constructive Dismissal
A situation where an employee resigns because their employer's conduct was so unreasonable that they felt they had no choice but to leave.
Even if you didn't fire the employee, you can be sued for "Unfair Dismissal" if you forced them out. Common triggers include cutting wages without agreement, bullying, or demoting staff without process. The burden of proof lies with the employee, but awards can be up to 2 years' salary.
Frequently Asked Questions
If the Workplace Relations Commission (WRC) finds in favour of the employee, the maximum award is up to two years' gross remuneration (salary). While awards are usually based on actual financial loss (the time they were out of work), the risk of a robust five-figure payout usually outweighs the cost of getting proper HR advice before changing an employee's terms.
It can be, if the reduction is significant and unilateral. If you cut an employee’s contracted hours by 50% without their agreement or a clause in their contract allowing for "Short-time," this constitutes a fundamental change to their terms of employment. They may resign and claim that you effectively destroyed their contract, entitling them to claim for financial loss under the Unfair Dismissals Acts.
It is difficult but possible. For a successful claim, the employee must prove that your conduct as an employer was so unreasonable that it breached the essential bond of trust and confidence, leaving them no choice but to resign. However, the WRC generally expects the employee to have exhausted internal Grievance Procedures before resigning. If they walk out without telling you why or giving you a chance to fix it, their case is significantly weaker.