Have I Been Constructively Dismissed?

Knowing when you've been treated unfairly at work isn't always easy, especially if you feel you’ve had no choice but to resign. In New Zealand, when you're forced to quit because of something your employer did or didn’t do, you may have been constructively dismissed.

What Is Constructive Dismissal?

Constructive dismissal happens when an employee resigns because of their employer's actions, rather than by choice. It’s treated as if the employer dismissed the employee, even though technically, the employee quit.  The key issue is:

Did you really resign freely, or were you pushed into it by your employer’s behaviour?

In New Zealand, constructive dismissal is covered under the Employment Relations Act 2000, which protects employees from being unfairly forced out of a job. Section 103(1)(a) of the Employment Relations Act 2000 says that a personal grievance can be raised for:

"a dismissal of the employee, including a constructive dismissal"

The law recognises three main situations where resignation counts as constructive dismissal. 

1. When the Employer gives an ultimatum.  

This happens when your employer says something like “If you don’t like it, you can leave,” or “Resign, or we’ll make things worse.”  Even if it’s not in writing, this can amount to constructive dismissal.

An example of this might be that you are told you must accept a demotion or a pay cut, or leave. You resign instead. That’s not a true resignation, it’s pressure from the employer.

A recent successful Mathews Walker case saw an employer tell a farm worker that he needed to find another job as soon as possible and if he didn’t there would be a disciplinary action.  The authority found that it was reasonably foreseeable that the employee would resign rather than, as suggested, engage in an investigation that ‘had no reasonable indication of being justified or fairly conducted.’  They concluded that the employee was constructively dismissed and remedies were awarded.  Click here for details of the determination.  

2. When you are forced to resign due to the employer’s behaviour

If your employer’s behaviour is so bad that you can’t reasonably stay, this might be constructive dismissal. This could include bullying or harassment, unsafe working conditions, not paying you properly, or ignoring serious complaints.  The employer doesn’t have to say you should leave, it’s more about their behaviour making your job impossible to continue.

A recent successful Mathews Walker case was based on a ‘breach of duty’ by the employer.  A husband and wife were employed on a rural property.  The husband was physically assaulted at work by a colleague.  The employer accepted the assault was serious and unacceptable and indicated the assailant would leave immediately.  The employer then changed this outcome allowing the assailant to remain.   The affected employee and his wife felt they had no other choice but to resign.  The authority found that the employer had breached their duty by failing to provide a safe workplace after a serious assault, failed to consult on decisions directly affecting employee safety, and loss of trust by reversing the decision of removing the assailant.  Overall their conduct was found to have made continued employment untenable and resignation reasonably foreseeable.  

3. When the employer breaches the employment agreement or treats you unfairly

Employers have to act in good faith. That means they must be honest, fair, and communicate with you properly.  If they break your employment agreement or treat you unfairly, without discussing changes, for example, this could justify resignation. Examples of this type of constructive dismissal might include sudden changes to your hours or duties without agreement, being excluded from meetings or key work functions, or pay or benefits being cut without consultation.  

A recent successful Mathews Walker case saw a cafe assistant’s employer renege on a verbal agreement regarding her start time, causing her to resign.  The employer then reinstated her agreed start time and the employee agreed to stay.  The employer then removed one of the employee’s regular shifts with little notice causing her to resign again and claim constructive dismissal.  The authority found that the employer’s conduct repudiated the employment agreement through changing the terms and conditions of employment by removing a shift she had consistently worked for more than 9 months.  This was a breach of the contract as they failed to advise her of the change to her roster ‘at least one week in advance’ and the Authority found that the employee had been constructively dismissed.   Click here for details of this determination. 

What Should I Do If I Think I’ve Been Constructively Dismissed?

Get Legal Advice Early

Speak to an employment advocate as soon as possible. These cases can be tricky to prove, and timing is important.

Raise a Personal Grievance

You must raise a personal grievance within 90 days of the dismissal (your resignation date). This is a formal complaint that starts a legal process.

Gather Evidence

You’ll need to show that your employer acted in a way that made it impossible for you to stay and your resignation wasn’t really your free choice.  Evidence might include:

• Emails, texts, or meeting notes, 

• Your employment agreement, 

• Notes of incidents, dates, and people involved, and/or

• Complaints you made and any responses

FAQs

Is it still constructive dismissal if I didn’t tell my boss I was unhappy?

Yes. While it helps to raise issues first, it’s not required if the behaviour was serious or ongoing. It can strengthen your case if you did speak up.

 Can I claim constructive dismissal if I signed a resignation letter?

Yes, if your resignation was pressured or not truly voluntary.

 How long do I have to raise a personal grievance?

You must raise it within 90 days of resigning. That’s why getting legal help early is key.

 Can I still get a payout or compensation?

Possibly. If your case is successful, you may receive lost wages (what you would’ve earned if still employed), compensation for emotional harm, and/or legal costs in some cases. 

 What if I’ve already started a new job?

That’s okay. You can still raise a grievance as long as it’s within 90 days of your resignation. Your new job doesn’t affect your rights.

Being forced out of your job isn’t fair, and it isn’t always legal. If you believe you were pushed to resign, you might have been constructively dismissed.  Get in touch today for a free consultation.  MathewsWalker.co.nz | 0800 612 355

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