An employment contract can be terminated or discharged in a number of ways, namely, by mutual agreement, by notice, by payment in lieu, or even by constructive dismissal, etc. Different ways of terminating the employment contract will often affect the parties’ respective obligations, rights and entitlements upon termination.
When an employer’s conduct might amount to a repudiation or fundamental breach which goes to the root of the employment contract, it might amount to a constructive dismissal despite resignation of the employee. As to what amounts to a fundamental breach, it will often depend on the circumstances of each case and the terms of the employment contract. For example, if an employee is threatened that he would be dismissed unless he resigns, the Court may hold such resignation to be constructive dismissal. However, as established in the UK authority Sheffield v Oxford Controls [1979] ICR 396, if the resignation is motivated by other factors, such as the offer of financial benefits or a reference letter, the termination may be a voluntary resignation, notwithstanding that the employee was told either to resign or be dismissed.
