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What is constructive discharge ?

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What is constructive discharge ?

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What is constructive discharge ?

  1. 1. What is Constructive Discharge? Constructive Discharge: Everything You Need to Know
  2. 2. What is Constructive Discharge? • Constructive discharge occurs when an employee resigns after experiencing unbearable working conditions that caused their resignation. • The negative working conditions must be such that a reasonable person would not continue working and thus the resignation is treated as a dismissal by the employer.
  3. 3. What is Constructive Discharge?
  4. 4. What is Constructive Discharge? • Employee who has been constructively discharged may be able to file a complaint against the employer as if the employer had wrongfully terminated their employment.
  5. 5. Constructive dismissal • In employment law, constructive dismissal, also called constructive discharge or constructive termination, occurs when an employee resigns as a result of the employer creating a hostile work environment.
  6. 6. Constructive Dismissal • Since the resignation was not truly voluntary, it is, in effect, a termination. • For example, when an employer places extraordinary and unreasonable work demands on an employee to obtain their resignation, this can constitute a constructive dismissal.
  7. 7. Constructive Dismissal
  8. 8. Constructive Dismissal • The exact legal consequences differ between different countries, but generally a constructive dismissal leads to the employee's obligations ending and the employee acquiring the right to make claims against the employer. • The employee may resign over a single serious incident or over a pattern of incidents. Generally, a party seeking relief must have resigned soon after one of the constructive acts.
  9. 9. Constructive Dismissal
  10. 10. How Can an Employee Prove Constructive Discharge? • Constructive discharge can be difficult to prove but is similar to proving wrongful termination and workplace discrimination claims. • The Equal Employment Opportunity Commission or EEOC provides three main factors in determining whether a constructive discharge occurred:
  11. 11. How Can an Employee Prove Constructive Discharge?
  12. 12. How Can an Employee Prove Constructive Discharge? • The existence of discriminatory or retaliatory behaviour against the employee in the workplace. • Whether such behaviour was so intolerable to a reasonable person. • Whether the employee was forced to resign or retire because of such behaviour.
  13. 13. The existence of discriminatory or retaliatory behaviour
  14. 14. Whether such behaviour was so intolerable to a reasonable person
  15. 15. Whether the employee was forced to resign or retire because of such behaviour
  16. 16. How Can an Employee Prove Constructive Discharge? • Depending on the state, there may be other considerations such as how many incidents occurred and their severity. • Time between the intolerable behaviour and the resignation is also relevant.
  17. 17. Changes to the employment relationship • Typically, the first way to claim constructive dismissal involves an employer making substantial changes to the employment contract, such as: • a demotion; • altering the employee’s reporting structure, job description or working conditions; • lowering an employee’s compensation; • changing hours of work; • imposing a suspension or leave of absence; and • relocating the employee’s workplace. • In addition, failure on the part of an employer to provide employment standards (e.g. overtime pay, vacation pay, etc.), can result in a constructive dismissal.
  18. 18. Changes to the employment relationship Demotion altering the employee’s reporting structure
  19. 19. Lowering An Employee’s Compensation
  20. 20. Changing Hours Of Work
  21. 21. Imposing A Suspension Or Leave Of Absence
  22. 22. Relocating The Employee’s Workplace
  23. 23. Toxic Work Environments • An employee may also be able to claim a constructive dismissal based on an employer’s conduct, rather than a change to a specific or implied term of the employment contract. • An example of this kind of constructive dismissal is a “toxic work environment”. In this regard, if a work environment is so poisoned that a reasonable person wouldn’t be expected to return, then constructive dismissal is likely.
  24. 24. Toxic Work Environments
  25. 25. Toxic Work Environments • A toxic work environment is classically defined as unjustified criticism as well as vague and unfounded accusations of poor performance, especially where authority and respect with co-workers had been seriously undermined and compromised. • Another example of toxic work environment is where the employer fails to prevent workplace harassment.
  26. 26. Toxic Work Environments
  27. 27. What Conditions can Cause Constructive Discharge? • It is important to note that intolerable conditions can be created by other employees similarly situated to the employee making a claim of constructive discharge. • It is not necessary that the conditions were created solely by a supervisor or authority figure in the workplace; the failure of the employer to correct or stop the condition may create the liability for the discharge.
  28. 28. What Conditions can Cause Constructive Discharge? • The following are examples of working conditions that can cause employees to claim a constructive discharge: • Bullying in the workplace either by one or more co-workers or supervisors. • Illegal discrimination such as discrimination based on race, sex, ethnicity, religion, or place of origin. • Sexual harassment. • Hostile work environment.
  29. 29. Bullying in the workplace
  30. 30. Illegal discrimination such as discrimination based on race, sex, ethnicity, religion, or place of origin
  31. 31. Sexual harassment
  32. 32. Hostile Work Environment
  33. 33. What Conditions can Cause Constructive Discharge? • Dramatic and intolerable changes to the employees hours, pay or responsibilities. • Retaliation after an employee has made a valid complaint, reported some wrongdoing, or engaged in whistle blowing on the employer. • Intolerable humiliation of the employee. • The terms of the employment contract were breached and such breaches created such intolerable conditions.
  34. 34. Dramatic and intolerable changes to the employees hours, pay or responsibilities
  35. 35. Retaliation after an employee has made a valid complaint, reported some wrongdoing, or engaged in whistle blowing on the employer
  36. 36. Intolerable humiliation of the employee
  37. 37. Typical causes • The person causing the dismissal does not need the authority to dismiss, as long as they acted in the course of employment.
  38. 38. Typical causes • Constructive dismissal is typically caused by:- • unilateral contract changes by the employer such as: deliberate cuts in pay or status (even temporary), • persistent delayed wages, • refusal of holiday, • withdrawal of car, • suspension without pay (or even on full pay), • dramatic changes to duties, hours or location (beyond reasonable daily travelling distance), or • breach of contract in the form of bullying
  39. 39. Persistent Delayed Wages
  40. 40. Refusal Of Holiday
  41. 41. Suspension Without Pay
  42. 42. Typical causes • Ignoring Complaints, • Persistent Unwanted Amorous Advances, • Bullying And Swearing, • Verbal Abuse (Typically Referring To Gender, Size Or Incompetence, • Singling Out For No Pay Rise, • Criticising In Front Of Subordinates, • Lack Of Support (e.g. Forcing To Do Two Peoples' Jobs),
  43. 43. Ignoring Complaints
  44. 44. Persistent Unwanted Amorous Advances
  45. 45. Bullying And Swearing
  46. 46. Verbal Abuse
  47. 47. Singling Out For No Pay Rise
  48. 48. Criticising In Front Of Subordinates
  49. 49. Typical causes • failure to notify a woman on maternity leave of a vacancy which she would have applied for if she had been made aware of it, • refusal to confirm continuity, • revealing secret complaints in a reference (even ones required by a regulator, or • breaches such as: behaviour which is arbitrary, capricious, inequitable, intolerable or outside good industrial practice, • conduct that undermined trust and confidence (i.e. offering an incentive to resign to avoid performance managing capability), • refusal to look for an alternative role due to workplace stress, • disproportionate disciplinary penalty, • employer tricks employee into resigning
  50. 50. Failure To Notify A Woman On Maternity Leave
  51. 51. Refusal To Confirm Continuity
  52. 52. Disproportionate Disciplinary Penalty
  53. 53. Employer Tricks Employee Into Resigning
  54. 54. What Remedies are Available for an Employee Who was Constructively Discharged? • If an employee is successful in a claim for constructive discharge, they may entitled to the following relief: • Reinstatement of their former position • Removal of another employee or supervisor responsible for the intolerable conditions • Money damages • Lost wages • Attorneys fees
  55. 55. Reinstatement
  56. 56. Removal of another employee
  57. 57. What Remedies are Available for an Employee Who was Constructively Discharged? • Constructive discharge claims are complicated and difficult to prove. If you are suffering intolerable working conditions, contact a local employment lawyer before resigning to ensure the best way to handle the situation so that your future claim is more successful. • Different states have varying factors and elements. Consulting an employment lawyer can help you understand what is required and how to prove your claim. A lawyer can prepare your case and represent you in settlement negotiations and in court.
  58. 58. Constructive discharge claims are complicated and difficult to prove
  59. 59. Constructive Discharge: Were You Forced to Resign? • If you were forced to quit your job because of intolerable working conditions, you may be able to sue.
  60. 60. Constructive Discharge: Were You Forced to Resign? • If you quit your job because of intolerable work conditions or treatment, in certain circumstances, your resignation may be considered a termination. • A resignation under these circumstances is called a “constructive discharge” or “constructive termination.” If you were constructively discharged from your employment, the law will typically treat you as if you were fired. • This means that you have certain rights that are typically not available to employees who quit their jobs, including the right to receive unemployment benefits and to file a wrongful termination lawsuit against your employer.
  61. 61. Constructive Discharge: Were You Forced to Resign?
  62. 62. History of Constructive Discharge • Constructive discharge is a legal concept that was first developed by the National Labor Relations Board (NLRB) in the early days of the labor union movement in the United States. • Today, the concept of constructive discharge applies to union and non-union employees alike. However, it was originally developed in the 1930s to stop efforts by employers to discourage employees from unionizing or forcing union employees to resign from their positions.
  63. 63. History of Constructive Discharge
  64. 64. Employer Efforts to Discourage Unionization • Some employers stubbornly opposed efforts by their employees to form unions to collectively negotiate for higher pay rates, more benefits, and better working conditions. • These employers used a variety of measures, including physical violence, to discourage employee unionization. In some cases, employees ended up leaving their jobs rather than suffering such abuse at the hands of their employers.
  65. 65. Employer Efforts to Discourage Unionization
  66. 66. Forced Resignations • Forced Resignations • Along the same lines, instead of openly discouraging union activity, some employers created intolerable working conditions with the specific intention of forcing employees to resign. • Employers often retaliated against employees who had made efforts to form unions. When these employees were forced to resign because of intolerable working conditions, they sued, relying on the constructive discharge provision adopted by the NLRB in the National Labor Relations Act (“the Act”). The U.S. Supreme Court allowed these employees to sue, holding that an employer violates the Act when it “purposely creates working conditions so intolerable that the employee has no option but to resign.”
  67. 67. Forced Resignations
  68. 68. Constructive Discharge for Non-Union Employees • Although the concept of constructive discharge arose out of the union movement, courts have extended it to situations involving non-union employees as well. • Although the rules differ in some ways, the standard for what qualifies as a constructive discharge is similar: when an employee quits his or her job because the working conditions are intolerable, the resignation is legally regarded as a termination.
  69. 69. Constructive Discharge and Discrimination • The U.S. Supreme Court has extended the legal concept of constructive discharge to cases brought under Title VII of the Civil Rights Act and the Age Discrimination in Employment Act (ADEA), the federal laws that prohibit discrimination and harassment in employment based on certain protected characteristics. And, many state courts also recognize the concept in similar types of cases under state laws. • If you were harassed or discriminated against because of your gender, race, religion, sex, nationality, age or disability, and it caused you to quit your job, you may be able to file a wrongful termination lawsuit even if you technically quit or resigned.
  70. 70. Constructive Discharge and Discrimination
  71. 71. What Constitutes “Intolerable Working Conditions?” • To successfully argue that you were constructively discharged under federal antidiscrimination laws, you must show that the harassment or discrimination created such intolerable working conditions that you were forced you to quit your job.
  72. 72. What Constitutes “Intolerable Working Conditions?”
  73. 73. What Constitutes “Intolerable Working Conditions?” • It won’t be enough to show that your supervisor treated you badly or that you were no longer happy at work. • Instead, you must show that the working conditions imposed on you were “objectively” intolerable, meaning that the working conditions were so bad that the average person in your situation would also have been compelled to resign.
  74. 74. What Constitutes “Intolerable Working Conditions?” • In practice, this is a very high standard that is often difficult to meet. In general, even basic discrimination claims (such as a woman receiving lower pay than a man in the same job) will not meet this standard. • The resigning employee must prove that the employer engaged in especially egregious conduct, such as physically harassing the employee, demoting him or her in a humiliating way, or the like.
  75. 75. The resigning employee must prove that the employer engaged in especially egregious conduct
  76. 76. What is Constructive Discharge? • People quit their jobs for a number of reasons. Often, life circumstances change, or the job just isn’t the right fit. • In the case of constructive discharge, a work environment becomes so hostile and intolerable an individual is forced to quit.
  77. 77. Constructive Discharge
  78. 78. Is constructive discharge illegal? • Is constructive discharge illegal? Yes. • According to the Equal Employment Opportunity Commission (EEOC), “discriminatory practices… also include constructive discharge or forcing an employee to resign by making the work environment so intolerable a reasonable person would not be able to stay.” Does this sound like what has happened to you?
  79. 79. What Constitutes Intolerable Working Conditions? • A person who is forced to quit due to intolerable working conditions may have been subject to unlawful harassment or discrimination. This can include but is not limited to:
  80. 80. What Constitutes Intolerable Working Conditions? • Sexual Harassment • Sex or Gender Discrimination • Pregnancy Discrimination • Religious Discrimination • Age Discrimination • Race Discrimination • Disability Discrimination • Consistent Workplace Bullying, Humiliation, Badgering, or Harassment
  81. 81. Age Discrimination
  82. 82. Race Discrimination
  83. 83. Disability Discrimination
  84. 84. Religious Discrimination
  85. 85. Pregnancy Discrimination
  86. 86. What Constitutes Intolerable Working Conditions? • If proven, any of these types of intolerable working conditions may meet the lawful requirements of constructive discharge. In addition, there are other circumstances that may meet the conditions, including: • A reassignment to menial work • Pay or hour decreases without adequate justification • Demotions, job responsibility removal without reason, and forced retirement
  87. 87. A reassignment to menial work
  88. 88. What Constitutes Intolerable Working Conditions? • Sometimes, people believe they have grounds for filing a case based on certain behaviours, such as mean looks or whispering between co- workers and/or supervisors. • Although uncomfortable, these behaviours are not likely to support a constructive discharge. Also, if you believe that someone may feel a certain negative or hostile way towards you for whatever reason, that does not in and of itself constitute constructive discharge.
  89. 89. The Burden of Proof • The burden of proof when it comes to constructive discharge is on the employee. • In order to establish constructive discharge, the environment must be truly intolerable not simply uncomfortable. • Typically, there needs to be some evidence that shows that the employee contacted their supervisor, a company human resources professional, or other senior leaders or bosses regarding the ongoing intolerable working conditions.
  90. 90. The Burden of Proof
  91. 91. The Burden of Proof • Further, the employee will need to show that the employer failed to take action to address the intolerable conditions. • Lastly, the hostility must be directed at you based on a protected status such as age, sex, race, religion or because you engaged in protected activity such as complaining about harassment, filing a worker’s compensation claim, or whistle blowing. Generalized hostility (“my boss yells at me”) will not support an unlawful constructive discharge or termination.
  92. 92. The Burden of Proof
  93. 93. The Burden of Proof • A legal claim needs to be filed promptly before the statute of limitations runs out. That is why it is important to contact an employment law attorney as soon as possible after you are forced to quit and you feel you may meet the requirements for constructive discharge. • If you were forced to quit due to discriminatory actions, such as the ones listed above, it is critical to know that the U.S. Supreme Court ruled in 2016 that the clock on the statute of limitations starts when the employee gives notice, not when the last discriminatory incident occurred.
  94. 94. The Burden of Proof
  95. 95. Constructive Discharge and Unemployment Benefits • When someone has to resign due to intolerable working conditions, this may be considered a termination in the eyes of the law. • This means that you may be entitled to unemployment benefits, among other potential compensatory damages. If you can prove you had no reasonable alternative but to leave your employment because of the hostile environment, in the eyes of the law it is not entirely unlike being fired because of sex, race, age, or other discriminatory practices.
  96. 96. Constructive Discharge and Unemployment Benefits
  97. 97. Constructive Discharge and Unemployment Benefits • Florida unemployment eligibility requirements also specifically say that “You must have lost your job through no fault of your own, so you must not have quit for personal reasons or been terminated for malicious misconduct (poor job performance does not disqualify you).” • This “personal reasons” phrase does not include the circumstances that would equate to constructive discharge.
  98. 98. Constructive Discharge and Unemployment Benefits
  99. 99. Constructive Discharge and Wrongful Termination • The circumstances surrounding a case for constructive discharge can make the issue seen in the eyes of the laws as a case for wrongful termination. • This type of claim may have to be filed with the Equal Employment Opportunity Commission (EEOC).
  100. 100. Constructive Discharge and Wrongful Termination
  101. 101. Constructive Discharge and Unemployment Benefits • Retaliation may include a change in duties, discriminatory practices, harassment, etc. This could potentially form the basis for a claim of unlawful termination, often referred to as wrongful termination.
  102. 102. Equal Employment Opportunity Commission (EEOC).
  103. 103. Applicability Of "Constructive Dismissal" Under Indian Laws • The recent advancement in technology has led to a new era of artificial intelligence and robotics. While there may not be a need for debate on its benefits, there is a real threat that robots are poised to replace both blue collar and white collar jobs. • Employers need to be well prepared to rationalize their workforce, including massive reduction in work force (RIF)
  104. 104. There Is A Real Threat That Robots Are Poised To Replace Both Blue Collar And White Collar Jobs
  105. 105. There Is A Real Threat That Robots Are Poised To Replace Both Blue Collar And White Collar Jobs
  106. 106. Laws governing RIF • India has a system of federal and state specific labour laws. • Employment termination provisions are covered in the Industrial Disputes Act 1947 (The ID act) • Model Standing orders of the Industrial Employment (Standing Orders) Act 1946 and the state specific statues applicable to shops and commercial establishments, in addition to the employment contract.
  107. 107. Laws governing RIF
  108. 108. Concept of ‘Retrenchment’ • Retrenchment is defined as 'termination by the employer of the service for any reason whatsoever, otherwise than as punishment inflicted by the way of disciplinary action. • Retrenchment excludes • Voluntary Retirement • Retirement on reaching the age of superannuation • Non-renewal of the contract upon expiry • Continued ill health.
  109. 109. Concept of ‘Retrenchment’
  110. 110. Concept of ‘Retrenchment’ • The Supreme Court of India has observed that the right of employers to retrench is inherent in the right of employers to manage their business. • However, this is subjected to compliance with the conditions of retrenchment prescribed under law
  111. 111. Concept of ‘Workmen’ • Employees who are categorized as ‘workmen’ are generally entitled to greater protection by law. • A workmen is any person employed to do any manual, unskilled, skilled, technical, operational. Clerical, or supervisory work for hire or reward. • Employees acting in a managerial, administrative or supervisory capacity are not considered as workmen (Section 2 of the ID act) • Persons who are not ‘workmen’ may however continue to be governed by state specific legislation applicable in case of shops and commercial establishments.
  112. 112. Concept of ‘Workmen’
  113. 113. Government Permission for employment termination • The legal requirement with respect to the termination of service are more onerous if more than 100 workmen are employed. • Factories with a minimum of 100 workmen are required to obtain prior permission of the labour authorities in order to terminate its workmen. Such an application should mention the reason behind the intended termination.
  114. 114. Government Permission for employment termination
  115. 115. Government Permission for employment termination • In addition to the afro mentioned requirement of obtaining permission for labour authorities, the law also requires to serve three months notice to the workmen, indicating the reason for the termination. The termination can take place only after the expiry of the notice period.
  116. 116. Government Permission for employment termination
  117. 117. Government Permission for employment termination • Any retrenchment of a workmen without the permission or in contravention of the order refusing permission will be deemed to be illegal and inoperative in law, in addition to penal consequences that the employer shall be liable to as per the ID act.
  118. 118. Government notification for employment termination • In cases of both factories with less than 100 workmen and commercial establishments, the employer is required to notify the labour authorities of the employment termination.
  119. 119. Indian Judiciary’s position on an RIF • Courts in India have taken the view that an employer has a right to reorganize its business; however, such a right should be exercised in a bonafide manner and not with the ulterior objective of victimizing employees.
  120. 120. Consequences of employment termination on frivolous grounds • The law prescribes certain requirements for a valid termination of employment. Any non-compliance of the mandatory prerequisites would render termination invalid and illegal. In such cases, the courts may direct the employer to reinstate the employees with continuity and payment of back wages.
  121. 121. Consequences of employment termination on frivolous grounds
  122. 122. Unfair Labour Practice • The law also prohibits the employer from committing an unfair labour practice (Section 25 T of the ID act). • Unfair labour practices include discharging or dismissing a workmen by the way of victimization, in bad faith or for patently false reasons.
  123. 123. Unfair Labour Practice
  124. 124. Unfair Labour Practice • Such practices are punishable with the imprisonment for a term of up-to six months/ and or a fine of at least 10,000 Indian rupees (approx $ 150) (section 25 U of the ID act).
  125. 125. References •Constructive dismissal https://en.wikipedia.org/wiki/Constructive_dismissal •Constructive Dismissal and Wrongful Termination https://employment.findlaw.com/losing-a-job/constructive-dismissal-and-wrongful- termination.html •Constructive Discharge Claim https://www.investopedia.com/terms/c/constructive-discharge-claim.asp •Constructive Discharge: Were You Forced to Resign? https://www.nolo.com/legal-encyclopedia/constructive-discharge-were-you-forced-resign.html •Employment & labour law in India https://www.lexology.com/library/detail.aspx?g=fa2fb547-5828-419a-bd3b-4ef01b612643 •Employment downsizing and reduction in force in India http://www.nishithdesai.com/fileadmin/user_upload/pdfs/NDA%20In%20The%20Media/News%2 0Articles/Employment_downsizing_and_reduction_in_force_in_India.pdf •How to Prove Constructive Discharge https://www.wikihow.com/Prove-Constructive-Discharge •What is Constructive Discharge? https://www.thebalancecareers.com/what-is-constructive-discharge-2061654
  126. 126. Thanks…

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