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Constructive dismissal compensation is a complicated subject, but it is a situation that often enables you, as an employee, to negotiate a decent settlement agreement.
In this article, we outline some of the many pitfalls which tend to thwart employees who want to negotiate a fair exit package deal, and how to overcome them.
What is constructive dismissal?
The term is actually short for constructive unfair dismissal and is a certain type of unfair dismissal, the difference being that in constructive dismissal the employee feels forced to resign, or leaves voluntarily, rather than actually being formally dismissed by their employer.
It can be very difficult to prove in court because employment tribunals believe that it is only in extreme circumstances that someone feels forced to leave employment.
The classic extreme example is not being paid your wages, or being physically assaulted.
There are so many permutations of what could constitute constructive dismissal but they all involve having your working life made so difficult that you feel you have no option but to leave.
Negotiating better redundancy pay is often the first thing on your mind when you are made redundant. This is especially the case when you feel singled out unfairly for redundancy and therefore the standard severance package does not seem like a fair outcome.
One thing to analyse is the way that your employer selected you for redundancy because, if for some reason it just doesn’t seem right, it may have been underhand.
This article discusses whether and how you can negotiate a better redundancy payment than what may be on offer, and get the payment made as part of a settlement agreement.
Be sure to also read our more general guide on how to negotiate a settlement agreement as well as our page about how much money you should get. If you want a detailed estimate of how much you could get in a settlement agreement, try our settlement agreement calculator.
Note that a redundancy situation does not always lead to a settlement agreement. If your employers are confident that they have conducted a fair process (see below) they may decide simply to proceed to dismiss you without any kind of exit package.
If the redundancy is fair, employers need not pay any more than statutory redundancy pay unless a contractually binding policy is in place which sets out the amount to be paid.
If it is unfair then you are within your rights to ask for an increased settlement package. We have created a unique letter builder tool which tailors a legal letter to you case depending on the yes/no answers you provide (this currently sits on our sister website called Lex).
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