Business owners often come to me when they’ve got a tricky employee situation on their hands. Someone who isn’t quite the right fit anymore—and they want to know how to move forward without ending up in hot water.

If it’s the right call for the business, there are ways to exit someone properly (even though phrases like “managing someone out” are pretty outdated now and best avoided).

But here’s the thing—if you get it wrong, you could be looking at a constructive dismissal claim. And that’s serious. It means the employee felt they had no choice but to resign because of how they were treated, and if they take it to tribunal, it could cost you thousands of pounds—not to mention time and stress.

So, how do you exit someone the right way, without inviting legal trouble?

1. Understand What Constructive Dismissal Actually Is

Constructive dismissal happens when an employee resigns because their working conditions were made so difficult or unpleasant that they felt forced to leave.

It’s covered under the Employment Rights Act 1996 and legally, it’s treated as a type of unfair dismissal.

Some common examples include:

• Unlawful changes to their pay or benefits

• Major changes to their job role without agreement

• Forcing unreasonable working hours or moving their location

• Discrimination

• Ignoring serious grievances

• Creating or allowing a toxic work environment

• Behaving in a way that makes resignation feel like the only option

None of these are small things—and they’ll absolutely land you in trouble if not handled correctly.

2. Build Fair Grounds for Dismissal

You can’t just nudge someone out. There has to be a fair and legal reason to end someone’s employment—and it needs to be handled properly.

If the issue is performance or capability, here’s what I recommend:

• Be crystal clear with expectations. Make sure they understand what’s expected of them and where they’re falling short. Use targets they can measure progress against.

• Give them the chance to improve. That might mean extra training, mentoring, or making reasonable adjustments depending on the situation.

• Follow a formal process. If they’re still not meeting expectations, you’ll need to use your business’ disciplinary or capability procedures. It’s got to be fair and consistent.

• Keep detailed records. Every meeting, every conversation, every step you’ve taken to support them—write it down. If things ever escalate to a tribunal, your notes will matter.

If, after all of this, there’s no improvement, you might then have fair grounds to end the employment. But you’ve got to do it by the book.

3. Explore Alternative Exit Options

Sometimes, it’s just not working—and dragging out a long process isn’t helpful for anyone. In those cases, there are other routes to consider:

• Mutual agreement. An honest conversation can go a long way. Sometimes both parties agree it’s time for a change, and you can part ways on good terms.

• Settlement agreement. You can offer a financial package in exchange for them agreeing to resign and not bring any future claims. It has to be legally binding and properly handled, but it can be a clean break.

• Redeployment. Maybe they’re struggling in this role but could thrive elsewhere in the business. Don’t rule it out.

Please, always get advice before you act.

Before you take any steps, it’s so important to get proper HR or legal advice. You can absolutely exit someone fairly and legally—but it’s not something to rush.

If you need to talk through a specific situation, I’m here. Let’s have a confidential chat and make sure you’re protected and doing the right thing for your business and your people.