Sometimes walking away from your job isn’t really a choice. For many New Zealanders, ongoing unfair treatment, broken promises, or a toxic work environment can make it impossible to keep going. When an employee resigns because of their employer’s behaviour, it may be what employment law calls constructive dismissal.
Although it can feel like you simply quit, the law may see your resignation differently. In New Zealand, constructive dismissal is recognised as a form of unjustified dismissal, meaning you may be able to raise a personal grievance and seek compensation.
Understanding what constructive dismissal actually means, and what steps to take next, can make all the difference.
What Constructive Dismissal Really Means
Constructive dismissal happens when your employer’s actions, or lack of action, make your job so unbearable that you feel you have no real option but to resign. It is not about one bad day or a difficult manager. It is about behaviour that makes continuing employment impossible.
Employment law in New Zealand recognises three main ways this can happen. The first is when an employee is told to resign or face dismissal. The second is when the employer’s behaviour puts deliberate or indirect pressure on the employee to resign. The third, and most common, is when the employer breaches their employment agreement or their duty of good faith so seriously that resignation becomes the only reasonable response.
In simple terms, constructive dismissal occurs when an employer’s actions make staying in the job impossible, even though the resignation technically comes from the employee.
The Legal Threshold and Why It’s Hard to Prove
Constructive dismissal claims can be challenging because the burden of proof lies with the employee. You must show that your resignation was caused by your employer’s behaviour and that the behaviour was serious enough to make resignation a reasonable response.
The key question is whether your employer’s conduct made resignation something they could reasonably have foreseen. It does not matter whether the employer meant to make you leave. What matters is whether a reasonable person in your position would have felt forced to resign.
This high legal threshold exists because the law expects employees to try to resolve issues before resigning, unless the situation is so extreme that staying isn’t possible. Documenting what happened and showing that you gave your employer a fair opportunity to fix the problem can make a big difference to your case.
Examples of Constructive Dismissal
Constructive dismissal can happen in many different ways. Sometimes it follows a single serious event, but more often it builds up through a pattern of behaviour or inaction over time.
Examples can include:
• An employer giving you the ultimatum to resign or be dismissed.
• Bullying or harassment that continues despite your complaints.
• Major changes to your duties, hours, or role without consultation or agreement.
• Repeated failure to pay your wages on time or in full.
• An unreasonable workload that causes stress or burnout.
• Being demoted or excluded without a valid reason.
In many cases, the issue is not one dramatic event but a gradual breakdown of trust and communication. What matters most is that your employer’s actions left you with no genuine choice but to resign.
What’s Not Constructive Dismissal
Not every resignation, even one made under pressure, will meet the legal definition of constructive dismissal.
Leaving your job because of a performance review, a disciplinary meeting, or a disagreement about work decisions is usually not enough. Ordinary management decisions, such as being asked to perform tasks within your job description or changes made for legitimate business reasons, are generally considered reasonable.
If your employer wasn’t aware of the problem or didn’t have a fair chance to address it, the situation is less likely to be seen as constructive dismissal. The law expects employees to raise concerns clearly, give their employer the opportunity to respond, and use internal processes where possible.
Before You Resign
If your workplace has become unbearable, it’s natural to want to walk away. But if you think your employer’s behaviour may amount to constructive dismissal, it’s important to pause and seek advice before making that decision. Once you resign, it can be much harder to gather evidence or reverse the outcome.
Before taking that step, try to:
• Keep written records of what is happening, including emails, messages, meeting notes, or payslips that show ongoing problems.
• Communicate your concerns clearly and in writing. Explain what is wrong and what you would like to see happen.
• Give your employer a reasonable chance to fix the situation, unless the circumstances are extreme.
• Seek independent advice as soon as possible. An employment advocate can help you assess your options and communicate on your behalf.
Showing that you have made genuine efforts to resolve the issue, and that your employer failed to respond appropriately, will strengthen your position if you later raise a personal grievance.
Raising a Personal Grievance
If you have already resigned and believe you were forced to, you can raise a personal grievance for constructive dismissal. This must be done within 90 days of your resignation.
To succeed, you need to show that your employer’s conduct caused your resignation, that it was serious enough to justify your decision to leave, and that you took reasonable steps to resolve the issue before resigning.
If the claim is successful, outcomes may include compensation for lost income, payment for stress or humiliation, or in rare cases, reinstatement to your role. Constructive dismissal cases are complex, so getting professional guidance early is essential.
Why Some Constructive Dismissal Claims Don’t Succeed
Most unsuccessful constructive dismissal cases fail because the employee cannot clearly link their resignation to their employer’s actions. Sometimes there are multiple factors at play, such as family issues or personal stress, which makes it difficult to show that the employer’s behaviour was the direct cause.
Timing also matters. The closer your resignation is to the employer’s conduct, the stronger your case. Waiting too long or failing to raise issues as they arise can make it harder to prove that your resignation was a direct result of their actions.
How My Advocate Can Help
At My Advocate, we understand that deciding to resign is not something people do lightly. We also know how stressful and isolating it can feel when you are being treated unfairly at work. Our role is to help you understand your rights and explore every option before you make a big decision.
We can review your employment agreement and the events leading up to your resignation, advise you on whether it may amount to constructive dismissal, and if so, guide you through the personal grievance process. We focus on practical, respectful solutions that protect your wellbeing and your future.
Your first consultation is free, and we will always be honest about your options.
Being pushed to resign does not mean you have given up your rights. The law recognises that some workplaces become so unfair that leaving is the only realistic option. If your job has reached that point, you are not alone and you do not have to face it without support.
Constructive dismissal can be complex to prove, but with the right advice you can take back control and move forward with confidence. Talk to My Advocate for clear, compassionate guidance before you take your next step.
Constructive Dismissal FAQs
What is constructive dismissal in New Zealand?
Constructive dismissal happens when your employer’s behaviour or inaction makes your job so difficult that you feel you have no choice but to resign. It can occur when you are given an ultimatum to resign, pressured to leave, or treated so unfairly that staying is no longer reasonable.
How do I prove constructive dismissal?
To prove constructive dismissal, you need to show that your employer’s actions caused your resignation and that those actions were serious enough to make leaving a reasonable response. Keeping detailed written records and showing that you gave your employer a fair chance to fix the situation will help strengthen your claim.
What should I do before resigning from a toxic job?
If you feel forced to resign, pause before taking action. Write down what is happening, raise your concerns formally in writing, and seek advice from an employment advocate or legal professional. Once you resign, it becomes harder to gather evidence or reverse the decision, so get guidance early.
How long do I have to make a constructive dismissal claim?
You have 90 days from the date you resigned to raise a personal grievance for constructive dismissal. Acting quickly is important, as missing this timeframe can limit your options for seeking compensation or other remedies.
What can I claim for constructive dismissal?
If your claim is successful, you may be entitled to compensation for lost income, reimbursement for unpaid wages or entitlements, and payment for the stress or humiliation caused by your employer’s behaviour. Each case is assessed individually, based on its circumstances.