Brown & Anor v Neon Management Services Ltd & Anor (Rev 1)  EWHC 2137 (QB)
The Claimants were seeking damages for wrongful dismissal and declarations that they were wrongfully dismissed, with the effect that contractual post-termination restrictions fell away. The Claimants were successful in both respects.
The Claimants resigned on notice after the Defendant failed to pay salary increases and discretionary bonuses that had been awarded to them, made the salary increases and bonuses conditional upon acceptance of detrimental new contractual terms and removed profit commission ("PC") agreed at the time of their recruitment. The Claimants contended that those breaches individually and cumulatively amounted to a repudiatory breach of contract entitling them to resign. Thereafter, the Claimants, and in particular the First and Second Claimants, contended that the Defendants committed further repudiatory breaches of contract whereby they accepted that alleged repudiation by resigning with immediate effect on 1 May 2018. They claimed damages and declarations that they were wrongfully dismissed, with the effect that contractual post-termination restrictions fell away.
The High Court ruled in their favour in both respects. If there had been no further breaches of contract after the on notice resignations, the Claimants would have affirmed their contracts, the notice periods being 6 months and 12 months. It is well-established that in the face of a repudiatory breach of contract the employee must not leave it too long before resigning otherwise he will be taken to have affirmed. However, in this case, there were further breaches of contract entitling the Claimants to resign as a result of the Defendant's conduct, and they acted promptly in so doing.
Published: 22/08/2018 15:00