Constructive Dismissal: Do You Need to Exhaust the Grievance Process?
Regarding constructive dismissal, the concept is straightforward: an employer’s actions are so unreasonable or harmful that an employee feels they have no option but to resign. However, what’s unclear is whether an employee must exhaust every stage of their organisation’s grievance process before making a claim. As recent UK case law illustrates, the answer isn’t as simple as it might seem, and it highlights a fundamental shift in how we view employee rights within the workplace.
A Fresh Look at Grievance Exhaustion
Imagine this: you’re a dedicated schoolteacher who has endured aggressive and intimidating behaviour from your headteacher. You follow the correct procedures—you file a grievance, follow the process, and hope things will improve. But after the second stage of the grievance process, you realise that the outcome won’t change, and you feel utterly let down. Frustrated and worn down, you decide it’s time to leave. But here’s the catch: can you bring a constructive dismissal claim even though you didn’t complete the grievance process?
According to the Employment Appeal Tribunal (EAT), the answer is yes. The recent case of Nelson v. Renfrewshire Council provides a new perspective on constructive dismissal in the UK. It challenges the idea that employees must go through every internal channel before resigning and making a claim. Instead, this case directs attention back to what matters: the employer’s behaviour and the damage it causes to trust within the employment relationship.
The Case of Nelson: Breaking It Down
In Nelson v. Renfrewshire Council, Ms. Nelson, a schoolteacher, filed a grievance against her headteacher, accusing them of aggressive behaviour that other staff members had seen. The school's grievance procedure included two internal steps and a final appeal to the local council. Nelson’s grievance was dismissed at both internal stages, so she resigned and subsequently filed a claim for constructive dismissal, arguing that her employer had fundamentally breached the implied term of mutual trust and confidence.
The employment tribunal initially ruled against Nelson, stating that she should have completed all grievance stages. However, the EAT overturned this decision, focusing on two key points:
- Exhaustion of the Grievance Process Is Not Required:
The EAT concluded that an employee doesn’t have to go through every stage of a grievance process before making a constructive dismissal claim. What truly matters is whether the employer’s actions were likely to destroy trust and confidence, not whether the employee completed each step. Simply put, failing to finish the grievance process doesn’t prevent someone from claiming they’ve been mistreated. - The Right Test Is Likelihood, Not Actual Damage:
The tribunal made the mistake of assessing whether the trust relationship had already broken down. However, the EAT clarified that the correct test was whether the employer’s conduct would likely destroy that trust. The distinction here is subtle but significant: it’s about the probability of damage, not necessarily evidence of it.
This case reinforces the idea that constructive dismissal hinges on whether the employer’s behaviour has reached a level likely to harm the employee-employer relationship irrevocably. The decision underlines that employees have the right to walk away before they’ve exhausted every stage of a grievance process.
What This Means for Employers
It’s easy for employers to assume that a robust grievance process will serve as a shield against claims of constructive dismissal. However, this case underscores that it’s not about simply having a grievance process in place; it’s about whether that process is fair, unbiased, and capable of addressing employee issues. Employers should consider this a call to action to closely examine their internal grievance processes.
Here are three practical tips to help mitigate the risk of constructive dismissal claims:
- Prioritise Fairness and Transparency from the Start
When an employee raises a grievance, handling it with integrity is essential. Ensure impartial investigations, genuinely listen to employee concerns and demonstrate a clear commitment to resolving the issue fairly. If an employee senses any bias or indifference, they may start considering resignation long before the process ends. - Act Promptly to Resolve Issues
Grievance processes are like a slow-release remedy: the longer issues remain unresolved, the more likely they will worsen. Tackle grievances head-on, swiftly, and with sincerity. Addressing problems at the earliest opportunity demonstrates care and can prevent escalation, fostering trust and a sense of security. - Know What’s at Stake Beyond the Tribunal
Resolving grievances isn’t just about dodging legal claims. It’s about protecting your organisational culture and reputation. Although relatively rare, constructive dismissal cases can significantly impact how your company is perceived. A claim like this sends a powerful message about your workplace environment—ensure it’s positive.
By fostering a culture of fairness and transparency, employers can protect themselves from the risks associated with constructive dismissal. Employees who feel heard and respected are more likely to resolve their issues internally rather than seeking recourse through legal channels.
A Quick Word on Compensation
So, what’s to stop employees from skipping grievance stages and going straight to a claim? Compensation plays a role here. The Acas Code of Practice allows for up to a 25% reduction in compensation if an employee doesn’t engage with the grievance process. While this might not deter an employee from resigning, it can affect the value of their claim.
That said, employees should weigh the pros and cons of engaging with the grievance process. A higher compensation claim could be at stake, but equally, the process could bring resolution and relief from workplace difficulties.
Conclusion: Focus on Trust, Not Processes
Today’s employees expect more than just a salary — they expect respect, fairness, and an environment where they feel valued. Trust is central to this. While grievance processes can help resolve disputes, they’re no substitute for real, respectful treatment.
The takeaway is clear: instead of worrying about whether your process ticks every box, focus on how you treat your people. Create an environment where grievances are unlikely to arise. When you prioritise trust, you’re not just avoiding claims but building a workplace where people want to stay.
Concentrating on trust rather than rigid processes can ensure a positive workplace culture and reduce the likelihood of grievances ever reaching the point of a constructive dismissal claim. After all, in the end, it’s about making your workplace somewhere people genuinely want to be.
About the Author
I’m Karl Wood, founder of WINC HR Strategy and Solutions. With over 25 years of experience helping organisations transform their HR practices worldwide, I’ve worked across the US, UK, Europe, and Asia Pacific, partnering with industry leaders to create inclusive, resilient, and high-performing workplace cultures. I’m passionate about finding innovative ways to tackle complex workforce challenges and implement strategies that foster growth, flexibility, and employee engagement.
If you’re ready to rethink your approach to leadership or explore the latest in HR strategy, I invite you to connect with me on Medium for more insights on the evolving world of work. Let’s continue the conversation — reach out anytime for advice, discussions, and collaboration!
