Constructive Dismissal vs Unfair Dismissal

Both are claims in the Employment Tribunal, but they arise in different circumstances. Understanding which applies to your situation is essential before filing an ET1.

Overview

Unfair dismissal and constructive dismissal are frequently confused. Unfair dismissal applies where the employer actively dismisses the employee — the question is whether the dismissal was procedurally and substantively fair. Constructive dismissal is where the employee resigns in response to a repudiatory breach of contract by the employer — the question is whether the employer's conduct was serious enough to justify resignation. Both claims are brought in the Employment Tribunal under the Employment Rights Act 1996, and both require two years' continuous service (unless the reason is automatically unfair).

Side-by-Side Comparison

Unfair Dismissal

Time: 3 months less 1 day from effective date of termination (extended by ACAS Early Conciliation)

Pros

Straightforward where the employer has clearly dismissed — no need to prove a repudiatory breach
Employer must show a potentially fair reason (capability, conduct, redundancy, SOSR, statutory restriction)
Compensation includes basic award (like redundancy pay) and compensatory award (up to £115,115 for 2025/26)
Reinstatement or re-engagement is also available as a remedy (rarely ordered in practice)

Cons

Requires 2 years' continuous service (unless automatically unfair reason applies)
Employer may have followed a fair procedure even if the dismissal was unfair in substance
Compensatory award is subject to reduction for contributory fault and Polkey reduction

Best For

Employees who have been told they are dismissed (including dismissed for redundancy) and believe there was no fair reason or the procedure was flawed.

Constructive Dismissal

Time: 3 months less 1 day from the date of resignation (extended by ACAS Early Conciliation)

Pros

Available where the employer has not formally dismissed but has made the employment untenable
Covers serious failures: removing pay, demoting without consent, bullying, failure to address harassment, changing role fundamentally
If successfully argued, the employee is treated as dismissed and can claim unfair dismissal
Also gives rise to a claim for wrongful dismissal (contractual damages)

Cons

Much harder to prove than unfair dismissal — must show a clear repudiatory breach
Employee must resign promptly — delay (affirmation of the breach) will defeat the claim
Employer can argue the resignation was for other reasons
No income during the period between resignation and tribunal — financial risk is higher

Best For

Employees in situations of sustained harassment, bullying, unlawful demotion, serious breach of the implied duty of trust and confidence, or where the employer has unilaterally varied a fundamental contractual term.

Key Differences

AspectUnfair DismissalConstructive Dismissal

Who terminates the contractThe employer terminates — the employee is dismissedThe employee resigns — but treats themselves as dismissed by reason of the employer's breach

What must be provedThe reason for dismissal was not a potentially fair reason OR the procedure was unfairThe employer committed a repudiatory breach; the employee resigned in direct response to it; the employee did not affirm the contract after the breach

DifficultyEasier to establish the factual premise (dismissal is usually clear)Significantly harder — repudiatory breach is a high threshold

ResignationNot relevant — employee did not resignMust have resigned promptly after the breach — delay = affirmation = claim defeated

RemedyBasic award + compensatory award (up to £115,115); reinstatement/re-engagementSame remedies — but financial risk during unemployment before tribunal is greater

Service requirement2 years (unless automatically unfair reason)2 years (same)

Our Recommendation

If you have been told you are dismissed, bring an unfair dismissal claim. If you resigned because of your employer's conduct, you may have a constructive dismissal claim but must act quickly — do not delay resigning once the repudiatory breach has occurred, and do not delay in contacting ACAS and a solicitor. In practice, many constructive dismissal claims also include discrimination or whistleblowing allegations, which do not require two years' service and should always be considered.

Related Guides

Official Resources

GOV.UK: Dismissal →ACAS: Constructive dismissal →