What is constructive unfair dismissal? – Introduction.

Chris Brunt is a Gibraltar employment lawyer, a Barrister and an Acting Solicitor who will consider all unfair dismissal cases on a “no win no fee” basis.

To start, let’s look at how Gibraltar’s Employment Act defines constructive dismissal. Section 64(2)(c) of Gibraltar’s Employment Act states:

‘…an employee shall be taken to be dismissed by his employer if .. the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer’s conduct.’

Notice that the employee is entitled to resign without giving notice even if the employee gives notice. From the legislation, you can see that this situation arises as a result of the employer’s conduct.

How then does the employer’s conduct allow an employee to contractually take such a drastic step as resigning from their employment and then claiming that their employer has constructively dismissed them?

The employer’s conduct that allows a potential claim for constructive dismissal is conduct that is serious and significant and which is fundamental to the extent that it goes to the heart of the employment contract, or conduct that demonstrates that the employer no longer intends to be bound by its terms anymore. In such circumstances, the employee is entitled to resign in response to the breach.

A fundamental term that goes to the heart of the employment contract

The employment contract can be express, for instance, terms contained in a document or written contract, they can be oral, or implied. They can even be imported into contracts by custom and practice, something an employer should be wary of especially if the only express terms recorded are in the ETB Terms of Engagement document. (See later posts on implied terms/terms imported into the employment contract by custom and practice).

Anyhow, what is a fundamental term, a breach of which would be a repudiatory breach of contract? It is a breach that is important and which goes to the root of the employment contract. For example, an employee contractually agrees to undertake work for an employer and an employer contractually agrees to pay the employee for that work. If the employer did not pay the employee this would be a serious and not trivial breach that went to the heart of the contract. This would allow an employee to resign and claim that the conduct of the employer was so serious that it allows them to take the position that the employer had for all practical effect dismissed them by failing to keep to the terms of their agreement.

Employees must act quickly if they are considering taking such a drastic step as resigning. This is because by delaying too long they may be taken as having accepted (or waived) the employer’s breach and any subsequent claim in the Gibraltar Employment Tribunal for constructive unfair dismissal would likely fail as a result. Though it’s fair to assume that if the breach was not being paid wages (as in the example above), it is not likely that they would continue to delay for any length of time!

With serious breaches, however, please note, that an employee can state that they are working under protest and that they are not accepting the employer’s breach. But this strategy has limitations and is a matter of fact and judgment by a tribunal as to whether the employee working under ‘protest’ has ‘protested’ too long without taking action, and has therefore waived the employer’s breach forgoing the right to successfully claim they have been constructively unfairly dismissed, that is should the employee later decide to resign and bring a claim against their employer for constructive dismissal.

Finally, there is a fine line between what an employment tribunal will consider is a fundamental term in the employment contract, which could potentially allow a claim for unfair constructive dismissal to succeed, and a term in the employment contract that is not fundamental and which does not allow an employee to successfully argue the employer has constructively dismissed them. It is therefore vital that you seek advice before you resign.

Is constructive dismissal always unfair dismissal?

No, is also important to realise that just because an employment tribunal finds that an employee has been constructively dismissed by their employer, this does not necessarily mean that the dismissal was unfair. This is discussed in the following post.

In later posts, in order to complete this article on Constructive Dismissal, we will explore the following:

Q. If an employee claims they have been constructively dismissed is it necessarily unfair dismissal?

Q. What are the challenges an employer faces defending a claim from an employee who alleges that they have been constructively dismissed?

Q.What does an employee have to prove to establish their claim,

Q. Why are employees’ claims for constructive dismissal in the Gibraltar Employment Tribunal rarely successful?

Chris is an Employment Law Barrister and Acting Solicitor of the Supreme Court of Gibraltar who specialises in Employment Law.

Are you an employer looking to reduce the risks of resignation and a subsequent claim from an unhappy employee for unfair constructive dismissal? Or perhaps defending a claim for unfair constructive dismissal? Please contact me at Phillips Barristers and Solicitors to see if I can assist your business.

Or perhaps you are an employee who feels that your employer has seriously breached the terms of your working arrangement. A constructive dismissal claim is a high-risk strategy and you should seek legal advice before taking any action. Contact me at Phillips Barristers and Solicitors, 292 Main Street, Gibraltar, GX11 1AA. Tel (+350) 200 73900, or email me at chris.brunt@phillips.gi for a free 30-minute consultation to discuss how I may assist you.

Contact me for a free 30-minute consultation at Phillips Barristers & Solicitors, 292 Main Street, Gibraltar, GX11 1AA, call me on 200 73900 or email me at chris.brunt@phillips.gi for advice to employers on reducing your businesses’ exposure to an unfair dismissal claim – Or if you are an employee to evaluate your prospects for a claim for unfair dismissal?

All cases are considered on a “no win no fee” basis.


All opinions are my own and are provided for information only and do not constitute legal advice. Please note that the information and any commentary on Gibraltar law contained in this article are provided free of charge for information purposes only. Every reasonable effort is made to make the information and commentary accurate and up to date, but I do not accept responsibility for its accuracy and or for any consequences of relying on it. The information and commentary do not, and are not intended to, amount to legal advice to any person on a specific case or matter. You are strongly advised to obtain specific, personal legal advice about your case or matter and not to rely on the information or comments on this site https://www.employmentlawgibraltar.com/

Related Posts