Termination of employment can occur in two ways, and both, if done without a valid cause and due process, constitute illegal dismissal. Actual dismissal is a straightforward, overt termination, the employer expressly ends the employment, whether by a termination letter, a verbal firing, or a clear act of severance. Constructive dismissal, by contrast, is a dismissal in disguise: it occurs when the employer does not overtly fire the employee, but renders continued employment impossible, unreasonable, or unlikely, such as through a demotion in rank, a diminution of pay or benefits, an unjustified and prejudicial transfer, or acts of clear discrimination, insensibility, or disdain that become so unbearable that a reasonable person in the employee's position would feel compelled to give up their job. The law treats a constructive dismissal as an illegal dismissal, because the employee did not truly leave voluntarily but was forced out. Both actual and constructive dismissal, when illegal, carry the same reliefs: reinstatement (or separation pay in lieu of reinstatement) and full backwages, and possibly damages and attorney's fees where warranted. On the burden of proof, in illegal dismissal cases the employee must first establish the fact of dismissal (which is easy in actual dismissal but must be shown by the circumstances in constructive dismissal), after which the burden shifts to the employer to prove that the dismissal was for a valid cause and with due process. So dismissal may be actual or constructive, both are illegal when without cause and process, and both entitle the employee to the same remedies.
Two Ways to Be Dismissed
Actual dismissal is an overt termination (a letter, a firing). Constructive dismissal is a dismissal in disguise — the employer makes work impossible or unbearable, forcing the employee out.
What Constructive Dismissal Looks Like
A demotion, a pay/benefit cut, an unjustified prejudicial transfer, or discrimination and disdain so unbearable that a reasonable person would feel compelled to resign. The law treats it as illegal dismissal.
Same Remedies, Shifting Burden
Both, when illegal, carry the same reliefs: reinstatement (or separation pay) + backwages, plus possible damages. The employee first shows the fact of dismissal; then the burden shifts to the employer to prove valid cause and due process.
Practical Takeaways
- Actual = overt firing; constructive = forced out;
- Both are illegal without cause and due process;
- Same remedies apply; the employer must justify the dismissal.
Frequently Asked Questions
What is the difference between actual and constructive dismissal? Actual dismissal is an overt termination by the employer. Constructive dismissal occurs when the employer renders continued employment impossible or unbearable, such as through demotion or a pay cut, forcing the employee to leave.
Is constructive dismissal illegal? Yes. Constructive dismissal is treated as an illegal dismissal, because the employee did not truly leave voluntarily but was forced out. If without a valid cause, it entitles the employee to the usual reliefs.
What remedies apply to both kinds of dismissal? Both actual and constructive illegal dismissal carry the same reliefs: reinstatement or separation pay in lieu of reinstatement, full backwages, and possibly damages and attorney's fees where warranted.
Who must prove the dismissal was valid? The employee must first establish the fact of dismissal. The burden then shifts to the employer to prove that the dismissal was for a valid cause and with due process.
This commentary is for general informational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult a licensed attorney.
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