Calculate your constructive dismissal settlement

Possibly, but the legal test is specific. Constructive dismissal requires a fundamental breach of your employment contract by your employer, and you must resign in direct response to it. Common examples include a unilateral cut to your pay or hours, demotion without your consent, sustained bullying or harassment, or serious damage to the trust and confidence that underpins the employment relationship. The key word is fundamental. Not every difficult working situation meets the legal threshold. Getting advice before you resign is the most important step, because a solicitor can assess whether what you are experiencing is likely to qualify.

Because your position is strongest while you are still employed. Before you resign, a solicitor can assess whether the breach is serious enough to support a claim, advise you on how to document what is happening, and in many cases open without prejudice discussions with your employer. That can result in a negotiated settlement where you leave on agreed terms with a financial package, without the risk and delay of a tribunal claim. If you resign first, without that preparation, you have fewer options and less leverage.

If you continue working for a significant period after the event you say forced your resignation, a tribunal may find that you accepted the breach and carried on under the contract, which would undermine your constructive dismissal claim. There is no fixed time limit and it depends on the circumstances, but it is one reason acting promptly matters. Raising a formal grievance is often an important step to show you have not accepted the situation.

For a standard constructive dismissal claim under ERA 1996 s.95(1)(c), you need at least two years of continuous employment. However, if the conduct that forced you to resign was connected to a protected characteristic (such as your sex, race, disability, or age), a protected disclosure, pregnancy or maternity leave, or trade union membership, you may have additional claims that carry no qualifying period and can be worth significantly more. A solicitor will look at all potential heads of claim, not just the constructive dismissal route.

A constructive dismissal claim is valued on the same basis as unfair dismissal. The basic award is calculated using your age, weekly pay (capped at £751 from April 2026), and years of service. The compensatory award covers your actual financial loss and is capped at £123,543 or 52 weeks' gross pay, whichever is lower, under ERA 1996 s.124. If your employer failed to follow a fair grievance or disciplinary process, a tribunal can increase the award by up to 25%.

A without prejudice conversation is one held with a genuine view to settling a dispute. What is said in that meeting generally cannot be used as evidence in tribunal proceedings. Under ERA 1996 s.111A, pre-termination negotiations (including settlement offers made before any formal dispute exists) are also protected from disclosure in ordinary unfair dismissal claims. If your employer has approached you about leaving, that conversation may have legal protection, but it does not stop you from seeking independent advice before responding or agreeing to anything.

The first £30,000 of a termination payment, including the basic award and compensatory element, is tax-free under ITEPA 2003 s.403. Amounts above £30,000 are taxable at your marginal rate. Payment in lieu of notice (PILON) is always taxed as earnings under ITEPA 2003 s.402D, regardless of what the agreement calls it. How the settlement is structured and allocated in the agreement affects your net take-home, which is one reason having a solicitor review and draft the document matters.

Yes. Under ERA 1996 s.203, a settlement agreement is only legally binding if you have received independent legal advice from a qualified, insured, SRA-regulated solicitor who is named in the agreement. Without that, the agreement cannot validly waive your right to bring a claim. Your employer is required to contribute to the legal fees, typically between £350 and £750, which in most cases covers the full cost. The advice is effectively free to you, and it is the only way the agreement is legally valid.