When an employee has been fired or sacked, it’s generally understood that the employer has ended their employment. When an employer asks an employee to resign, with a threat that if they don’t they will be sacked, most people would guess they’ve been fired or sacked, too. In employment law the real legal test though is whether the employee has been dismissed or not.
A dismissal is deemed to occur in the following circumstances:
a) The employer terminates the employment with or without notice; or
b) A fixed term contract expires and is not renewed; or
c) There is a constructive dismissal (which is when the employee resigns in response to a fundamental breach of contract by the employer. The employee must resign swiftly as a result of the breach and not have affirmed the contract).
If the employee resigns in other circumstances there is no dismissal.
If the employer and the employee mutually agree to end the employment no dismissal arises. The parties could enter into a settlement agreement, for example.
An employee must have been dismissed to be able to bring a claim for unfair dismissal. Generally, an employee also needs to have at least two years’ continuous service to bring an unfair dismissal claim.
There is a similar definition of dismissal for redundancy pay purposes. An employee must have been dismissed to be entitled to a statutory redundancy payment and there is a two years’ eligibility requirement as well.
Where an employee uses clear words of resignation it will generally be found that the employee, not the employer, has terminated the employment contract. However, when a resignation is forced, an employment tribunal could find that it was the employer that terminated the contract. Each case though will depend on its facts.
It may not be so significant whether it’s the employer or the employee that terminates the contract. The employer could have terminated the contract or the employee might have resigned as a result of a fundamental breach by the employer.
Trying to force a resignation or threatening the employee could constitute a breach of the implied term of trust and confidence entitling the employee to resign and claim constructive unfair dismissal.