Companies often receive claims they constructively dismissed an employee if and when they vary a certain position or change compensation, for example.
Sometimes companies see claims of constructive dismissal only because employees are looking for an exit package or some compensation for various personal reasons.
Employers cannot fall victim to baseless claims made only for the purpose of compensation.
To avoid exploitation from a series of baseless claims, companies must engage with the relevant legal concepts that govern their employment relationships and effectively assess their legal interests and those of employees.
Skillful negotiations can help resolve such problems with minimal cost and litigation if and when treated early. Allowing such claims to escalate to litigation can not only lead to further costs but allow for other employees to advance similar claims.
Risk management also has an important role to play in avoiding costly constructive dismissal litigation. Such legal matters often arise when employees feel wronged or uncertain about their future within the business. Companies should consistently and thoroughly review their employment contracts, employee handbooks and workplace policies to appropriately set expectations and manage their employment relationships.