Constructive Dismissal in New Zealand

You can be dismissed without ever being told you are fired. If your employer’s conduct leaves you with no real choice but to resign, the law may treat that resignation as a dismissal — a constructive dismissal — which you can challenge as a personal grievance.

The label matters because it changes what you are entitled to claim. A resignation, on its face, ends the employment by your own choice. A constructive dismissal treats the ending as the employer’s doing, which opens the door to the remedies available to someone who was dismissed outright.

When does a resignation become a constructive dismissal?

The Court of Appeal in Auckland Shop Employees Union v Woolworths (NZ) Ltd identified three situations in which a resignation can amount to a constructive dismissal: where the employer gives the employee a choice between resigning or being dismissed; where the employer follows a course of conduct with the deliberate and dominant purpose of coercing the employee into resigning; and where a breach of duty by the employer leads the employee to resign.

The first two cover fairly direct pressure — an ultimatum, or a campaign aimed at pushing someone out. The third is the category most cases turn on, because it captures situations where the employer may not have set out to force a resignation at all, but its conduct had that effect.

The breach-of-duty test

For the third category, the Court of Appeal in Auckland Electric Power Board v Auckland Provincial District Local Authorities Officers IUOW set out a two-stage inquiry. The first question is causation: was the resignation caused by a breach of duty on the employer’s part? Answering it means looking at all the circumstances of the resignation, not just the words used in the resignation letter.

If the resignation was caused by a breach, the second question is whether the breach was serious enough that the employer ought reasonably to have foreseen a substantial risk the employee would resign. This is assessed objectively. It turns not only on what the employer actually knew at the time, but on what it ought to have known. An employer is expected to be proactive in understanding its obligations and the likely effect of breaching them, which reflects the good-faith duty under s 4(1A)(b) of the Employment Relations Act 2000 to be active and constructive in maintaining the employment relationship.

The effect is that an employer cannot rely on having been unaware of its own legal obligations. If a reasonable employer in the same position should have known its conduct breached the employee’s rights and risked driving them out, the foreseeability limb can be met.

A recent example: Jin v Precision NZ Ltd

The Employment Court’s 2026 decision in Jin v Precision NZ Ltd shows the breach-of-duty test in operation. Mr Jin worked as a carpenter for a construction company that treated him as a contractor and required him to invoice for his hours before it would pay him. Payment was irregular, with delays running from two to six weeks, and he was given no employment agreement. He resigned, and later claimed he had been constructively dismissed.

The Court found that the company had breached its obligation to provide an employment agreement specifying his wages under s 65(2)(a)(v), and that requiring an employee to invoice before being paid was an unreasonable practice inconsistent with the duty of good faith. On causation, it accepted that the invoicing requirement and the resulting delays made Mr Jin’s continued employment untenable and caused his resignation. On foreseeability, the Court worked from the position that New Zealand employers are expected to understand their obligations, and on the facts found the company ought to have foreseen that withholding wages in this way would lead an employee to resign. The resignation was a constructive dismissal, and unjustified.

Jin illustrates how liability for constructive dismissal is established. The remedies awarded in that case were assessed under the law applying to conduct that occurred before 21 February 2026; the rules governing remedies have since changed.

Is a constructive dismissal “unjustified”?

Establishing that a resignation was a constructive dismissal is the first step. Whether the dismissal was justified is assessed under s 103A of the Act, which asks whether the employer’s actions, and how it acted, were what a fair and reasonable employer could have done in all the circumstances at the time. Where the dismissal arises from the employer’s own breach of duty, justification is difficult to make out. A constructive dismissal that is found to be unjustified gives rise to a personal grievance, with the remedies that follow. Our unfair dismissal page explains the justification standard in more detail.

Raising your grievance in time: the 90-day rule

A personal grievance for constructive dismissal must be raised with the employer within 90 days, under s 114 of the Act. The 90 days runs from the date the dismissal took effect or from when the relevant events came to your notice, though which date applies can itself be a live question where a resignation is said to be a dismissal. Raising a grievance does not require any particular form of words; it is enough that the employee has made, or taken reasonable steps to make, the employer aware that they allege a personal grievance they want addressed. What it does require is that the substance of the complaint is conveyed — telling an employer you are owed wages is not the same as putting it on notice that you say you were forced out of your job.

If the 90 days has passed, a grievance can still proceed if the employer agrees, or if the Employment Relations Authority or the Court grants leave. Leave requires two things: that the delay was caused by exceptional circumstances, and that it is just to allow the grievance to proceed. Section 115 lists circumstances that qualify as exceptional, one of which is where the employment agreement did not contain the explanation of the employee’s rights to raise a personal grievance that the Act requires.

In Jin, the employee was granted leave on this basis. He had no compliant employment agreement, English was his second language, and the Court accepted he did not have the knowledge of his rights, or the 90-day timeframe, until he obtained legal advice. The delay was occasioned by exceptional circumstances, and it was just to allow the grievance to proceed. Missing the 90 days is not always the end of a claim, though leave is not granted as a matter of course. Our personal grievance page sets out the process in full.

Frequently asked questions

Is resigning the same as being dismissed? Not usually. A resignation is normally treated as the employee’s own decision. But where the employer’s conduct leaves the employee no real choice but to resign, the law can treat the resignation as a dismissal — a constructive dismissal — which can be challenged as a personal grievance.

Can I claim constructive dismissal if I quit? Possibly. Whether a resignation amounts to a constructive dismissal depends on the circumstances: whether the employer breached a duty owed to you, whether that breach caused you to resign, and whether the employer ought reasonably to have foreseen that its conduct might lead you to leave. Each case turns on its own facts.

How long do I have to raise a constructive dismissal grievance? You must raise the grievance with your employer within 90 days. The clock generally runs from when the dismissal took effect or when the relevant events came to your notice, although the trigger date can be contested in a constructive dismissal case.

What if I didn’t know about the 90-day limit? A grievance can sometimes be raised after 90 days if the delay was caused by exceptional circumstances and it is just to allow it. One recognised circumstance is where your employment agreement did not explain your right to raise a personal grievance. Whether leave is granted depends on the circumstances of your case.

This page is general information about New Zealand employment law and is not legal advice. Whether a resignation amounts to a constructive dismissal depends on the facts of the particular case.