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I quit - Constructive Dismissal NZ

Constructive Dismissal

What It Is

Constructive dismissal occurs when an employee resigns because their employer’s conduct makes continued employment intolerable — so much so that resignation becomes the only reasonable option.
In law, it is treated as a dismissal initiated by the employer’s behaviour, even though the employee formally resigns.

Examples include:

  • Persistent bullying, humiliation, or exclusion.
  • Sudden demotion or pay reduction without consultation.
  • Failure to address grievances or unsafe conditions.
  • Pressure or threats to resign.

Your Rights and the Law

  • ERA 2000, s 103(1)(a) — You can raise a personal grievance for unjustified dismissal, including constructive dismissal.
  • ERA 2000, s 103A — Requires the employer’s actions to be what a fair and reasonable employer could have done in all the circumstances.
  • ERA 2000, s 4 — Employers must act in good faith, which includes being responsive, communicative, and not misleading or deceptive.
  • The Court of Appeal in Auckland Shop Employees Union v Woolworths (NZ) Ltd [1985] 2 NZLR 372 established that constructive dismissal may occur where:
    1. The employer gives the employee the choice of resigning or being dismissed.
    2. The employer deliberately acts to force resignation.
    3. The employer breaches duties so seriously that resignation is the only reasonable response.
  • The Employment Court reaffirmed these principles in Chief of New Zealand Defence Force v Darnley [2013] NZEmpC 527, holding that a hostile, non-supportive environment can amount to dismissal in substance.

Process (How a Case Generally Proceeds)

  1. Document and Resign in Writing – Clearly outline your reasons for resignation and reference the employer’s conduct.
  2. Collect Evidence – Gather relevant documentation and all forms of evidence available.
  3. Raise Personal Grievance – Must be raised in writing within 90 days of dismissal.
  4. Mediation – The Ministry of Business, Innovation & Employment (MBIE) provides free mediation to seek early resolution. The process is voluntary and both parties must agree to attend. Most cases reach resolution at Mediation.
  5. Employment Relations Authority Investigation – If unresolved, a Statement of Problem is filed; the Authority investigates and issues a written determination.
  6. Employment Court Appeal – Possible for errors of law or procedure.

Potential Outcomes / Remedies

  • Reimbursement of Lost Wages – Usually up to 3 months’ pay (s 128 ERA 2000), but can be extended depending on the circumstances.
  • Compensation – For hurt, humiliation, and injury to dignity (s 123(1)(c)(i)).
  • Reinstatement – Rare in constructive dismissal cases, but technically available.
  • Interest and Costs 
  • Penalties – May be imposed for deliberate bad-faith breaches (s 4A ERA 2000).

Take Action Today

If you believe you were constructively dismissed, you don’t have to face it alone. Get in touch with us to arrange a no-obligation consultation about your situation. We’ll assess your case, request your employment file, and help you pursue the justice and compensation you deserve.