Employment Contracts Affect Constructive Dismissal Claims
When it comes to hiring a new employee, employment contracts are important tools that can help you hammer out all the key details of your budding working relationship. Whether you’re hiring for an entry-level position or filling a highly-skilled executive position, having solid legal documentation can protect both you and your employee. Employment contracts can provide a clear understanding of salaries, benefits, protections, and other key terms that will govern your workplace relationship. It can also help to deter misunderstandings, prevent disagreements, and avoid litigation in the future.
While employment contracts can provide peace of mind, they are not a guaranteed defence against constructive dismissal claims. In order for a claim to succeed, you must be able to demonstrate that your employer has committed a serious breach of contract. A serious breach is one that causes you to lose a substantial benefit that you have been promised under the contract. This could include a reduction in wages (often more than 10 per cent), a demotion, or a change to your schedule and duties that would significantly impact your job performance.
A significant change in working conditions may also lead to a constructive dismissal claim. The change must be substantial enough that it would force you to quit your job and could not be reasonably remedied. For example, if your employer changes the hours you work from day to night shift without giving you a reason, this would be a significant change and could be grounds for a constructive dismissal claim. Similarly, if your employer cuts your salary by more than 10 per cent, this might be grounds for a claim of constructive dismissal.
How Do Employment Contracts Affect Constructive Dismissal Claims?
Another factor that can affect your ability to make a constructive dismissal claim is the timing of the breach. In some instances, if you continue to work for an extended period after the Breach, this can amount to affirmation of the Breach and therefore weaken your claim.
An implied contract may also exist where an employer gives assurances that they will not fire an employee without good cause. This is usually only the case for senior managers and professionals, but it could apply to employees who have been promised job security in exchange for their full-time commitment or as part of a probationary period. This could be in the form of policies that state that the company will only fire people for “good reasons” or as part of a progressive discipline policy.
Constructive dismissal can be an incredibly stressful situation for both parties involved. It can take a toll on an employee’s self-esteem and confidence, especially if it leads to a financial crisis since you may not receive any severance pay or unemployment benefits. Leaving your job on bad terms can also harm your reputation in the industry, and you might have a difficult time finding a new role because of this black mark on your resume.
It’s always a good idea to have a lawyer review your employment contract and work conditions before you sign any documents. This will ensure that you are fully aware of any potential risks and have a lawyer’s advice on the best course of action for your unique situation.