How to Limit Exposure to Constructive Dismissal Claims
There are a number of things that can occur in an employment relationship that will give an employee a right to claim constructive dismissal. Successful constructive dismissal claims can be costly for companies, particularly in the case of employees who have long service with the company or who are in senior management or executive roles. Companies have to pay employees who have been constructively dismissed the same amount of compensation they would pay to an employee who was fired without cause.
There are a number of things that companies can do to reduce the risk of a successful constructive dismissal claim. The strategies vary according to the circumstances that lead to the constructive dismissal. The most common events giving rise to constructive dismissal claims are demotions or changes in duties; reductions in compensation; and hostile work environments.
Here are suggestions for strategies that will reduce the likelihood of an employee succeeding with a constructive dismissal claim:
DEMOTION OR REDUCTION IN DUTIES:
DECREASE IN COMPENSATION: