Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What is constructive dismissal?

1. Forced resignation due to unfair treatment

2. Dismissal due to economic conditions

3. Ended employment by mutual agreement

4. Termination due to a breach of contract

The correct answer is: Forced resignation due to unfair treatment

Constructive dismissal refers to a situation where an employee resigns because their employer's behavior has effectively forced them to leave their job. This can occur when the employer creates a hostile or intolerable work environment or makes significant changes to the terms of employment without the employee’s consent, such as a demotion or drastic changes in work conditions. When an employee claims constructive dismissal, they must demonstrate that the employer's actions constituted a breach of the implied contract of trust and confidence, which is fundamental to the employment relationship. This involves showing that the employer’s conduct was so unacceptable that it left the employee with no choice but to resign. Clearly, the other options do not accurately encapsulate the concept of constructive dismissal. A situation such as being dismissed for economic reasons does not fall under this definition, nor does an end to employment by mutual agreement, as this suggests consent from both parties, contrary to the notion of being forced out. Termination due to a breach of contract, while related, typically refers to a straightforward dismissal by the employer rather than an employee's resignation due to unbearable conditions.