Without consultation or contractual authority, Lockhart Ltd cuts the salary of its office manager, Tess, by 20%. Tess grumbles to a colleague but continues to work and accept the reduced salary, without raising any objection with her employer, for nine months. She then resigns, citing the pay cut. Which statement best describes her position?

Correct answer: B) A constructive dismissal claim is likely to fail, because by continuing to work without objection for a long period she is likely to be treated as having affirmed the contract

Explanation

Constructive dismissal requires a repudiatory breach by the employer and a resignation in response to it before the employee affirms the contract (Western Excavating v Sharp). A unilateral pay cut is a fundamental breach, so had Tess resigned promptly she would have been constructively dismissed. But an employee who continues working on the new terms for a significant period without protest may be taken to have affirmed the contract (W E Cox Toner v Crook), losing the right to resign in response. Wrongful dismissal requires an actual dismissal in breach of contract, and a pay cut is not a redundancy situation.