Constructive dismissal, also known as constructive discharge or constructive termination, is when an employee terminates his or her contract of employment. The employee is put into this position due to the employer’s behavior. The employer's behavior must be so deplorable that termination of employment was the reasonable consequence.
Essentially, the employee feels he or she has no choice but to quit. The prime reason this occurs is usually as follows:
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- The employee notices a breach in contract.
- The employee, due to the breach, feels that he/she must leave, or the employer does not want him/her around.
- The employee has done nothing to show that he/she wanted the breach the contract (such as a sudden demotion, sudden pay decrease, etc.).
Keep in mind that when constructive dismissal occurs, these claims must be proven to be true to obtain damages. An employee cannot simply claim constructive dismissal without proof.
Other reasons that constructive termination may be claimed include but are not limited to the following:
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- Bullying, harassment, degrading behavior
- Forcing an employee to work in dangerous conditions
- Forcing the employee to accept conditions that are not in his/her contract
How Does Constructive Dismissal Affect My Company?
Constructive dismissal can affect your company in several ways.
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- First, you have to assess whether or not the employee has a right to file for constructive termination or discharge at the time of his/her resignation. Was the employee put into a position by the company where the natural consequence was resignation?
- Second, if an employee falls under the constructive discharge category, the employee will likely file for and be awarded unemployment benefits. So, the company has to be prepared to deal with the claim and the resulting impact on the company's insurance.
- Finally, constructive discharge can affect the image of a company. Breaches in contract, work conditions, and harassment are all very serious things. They all could result in other employees resigning or taking their claims further—to the Department of Fair Employment and Housing or the California Labor Commissioner.
It is important to take steps to correct the unwanted behaviors and conditions to make sure that your business, and its name, are protected.
How We Can Help
As a business, it is essential to know what laws and regulations apply to your company and employees. For example, what is required of you as the employer to provide lawful employment? Do you know the answer? This is where we can help.
Simas & Associates, Ltd., represents employers throughout the state of California in all business needs, both big and small. Like you, Simas & Associates, Ltd., understands that the legal necessities of running a business can be overwhelming. Contact us online, or call us at 888-999-0008, for your free consultation.