Resigning after not being paid properly could be a constructive dismissal...

A constructive dismissal occurs when an employee is made to feel as if leaving their job is their only option.

This occurs most commonly when an employer provides their employee with the “choice” to either resign or be dismissed.

A couple of other situations where a constructive dismissal might arise are:

1. An employer follows a course of conduct with the deliberate and dominant purpose of coercing the employee to resign; or
   
   
2. A breach of duty by the employer leads the employee to resign.

A recent Employment Relations Authority decision confirmed that the second situation, relating to an employer breaching their duty, includes situations where the employer fails to fairly pay their employee for their work.

The underpayment must be so severe that the employee’s resignation would be a foreseeable consequence of it.

The Authority decided the ex-employee was being paid well under the minimum wage, despite working 6 days a week (which was more than what his employment agreement stipulated).

This underpayment, as well as having to deal with an offensive remark from his boss, drove him to resign and look for another job.

According to the Authority, the underpayment amounted to a constructive dismissal because it was so severe that it caused the ex-employee to resign.

While the boss’s offensive remark certainly added to the ex-employee’s unhappiness, the remark itself could not have caused the resignation as the ex-employee admitted that he would have stayed at the job had he just been paid fairly.

If you find yourself in a similar situation, it pays to talk to a legal professional with experience in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.