Constructive dismissal and demotion

There are a number of scenarios which might give rise to constructive dismissal, demotion of an employee being one of them. However, it should be noted that in cases of constructive dismissal, demotion of an employee does not always amount to a serious breach of contract allowing the employee to resign.

For an employee to claim constructive dismissal, demotion by their employer should have occurred without any disciplinary proceedings. A brief example can illustrate this point.


Employee A is employed as an assistant manager of a retail store. They have been employed for over five years. Employee A’s old service manager leaves and is replaced by Employee B. Employee B doesn’t like Employee A as they consider him to be too friendly with their colleagues. Employee B does not dismiss Employee A but demotes them without any forewarning or disciplinary procedures being followed.

Employee B’s actions are likely to amount to a fundamental breach of contract which will entitle Employee A to resign and claim constructive dismissal. Had Employee B followed the disciplinary procedures correctly and given Employee A adequate notice of the demotion, it may not have enabled Employee A to resign and claim constructive dismissal.

However, Employee B’s reasons for demoting Employee A could be subject to a challenge.

If you have a case similar to Employee A’s, you may have a constructive dismissal case. However, you should seek legal advice before resigning from your post. It may be that you may have to raise a grievance with your employer before resigning and claiming constructive dismissal.

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