Constructive Dismissal

Recently Kevin Keegan, a former top international football player, former manager of English Football team won a £ 2 million ‘constructive dismissal’ claim against Newcastle United on grounds of breach of contract of employment. Keegan resigned just eight months after his return to Newcastle United, claiming that he was forced to sign players he had not even seen. Removal of his right on player transfers amounted to breach of employment contract or a constructive dismissal case.


Constructive dismissal cases may be uncommon in countries like India but in countries like the UK, Germany where special laws like ‘Employment Rights Act, 1996’ safeguard employees against such unfair actions of employer, the awareness levels are pretty high. Although in India there are employment laws to protect employees but the tricky part comes where employee has to prove that the dismissal was unfair. The fundamental breach of contract may be due to unilateral contract alteration by employer, forcing employees to do something originally not a part of the terms of employment, unsupportive attitude, false accusations, and harassments or bullying by employer etc.

The issue of ‘constructive dismissal’ gathers significance in India particularly due to three phenomena’s. One, social media revolution is sweeping India rapidly and any action of company could immediately come in public glare and scrutiny. This became evident when Infosys’s ‘iRACE’ (Infosys Role and Career Enhancement) rolled-out last year came under heavy attack from employees on internet and even the official blog was inundated with hundreds of articles. Infosys, a much revered company in India, has long been known for its best HR practices and has been one of the most sought after employer among the Indian students. Some of its initiatives like employee learning initiatives have been path-breaking and a role-model for others to emulate and it has been continuously on the list of best employers nationally and globally. Despite all these laurels, the company came under a volley of criticism for ‘iRace’, which was supposed to be a career architecture that aligns talent management activities with client priorities, business focus and employee aspirations, that outpoured very quickly in public. Secondly, in age of RTI, employers need to be more transparent & accountable for their actions, as awareness levels are rising and public scrutiny has much more teeth than before. And thirdly, when managing human resources is undergoing transition in India, more than anything else ‘constructive dismissal’ issue emphasizes on the importance of treating employees fairly, with respect and in good faith.