Constructive dismissal - Case Round-Up: November 2013

In this month’s round-up, Mark Shulman consultant solicitor with Keystone Law looks at a miscellany of recent cases on constructive dismissal.

Mark Shulman, Consultant Solicitor at Keystone Law


Multiple reasons for resignation
What is the position where there is more than one reason for an employee's resignation. Can they still claim constructive dismissal? In [Wright v North Ayrshire Council]() UKEATS/0017/13/BI, the EAT stated that the case raised "…an important issue of principle which it is useful to re-emphasise".

The Claimant worked shifts as a care at home assistant. She brought grievances against her employer but they were not dealt with properly. She then went through a very difficult period when her mother died and her partner suffered a stroke. Split shifts did not make it easy to cope with this situation. Attempts to reorganise her working pattern were not successful. The Claimant resigned and claimed constructive unfair dismissal, but her claim was rejected. The ET was satisfied that the Claimant had been treated, "very badly" by management and the issue was whether the Claimant, when she resigned, did so in response to the employer's breach of contract. The ET ruled that the "effective cause" of her resignation was not the repudiation of her contract, but because she could not cope with the demands of her job while her partner was ill. The Claimant appealed.

Relevant principles
The breaches of contract in the present case were in respect of three grievances which had not properly been answered by the employer. However, whilst those circumstances amounted to a repudiatory breach of the contract, there were other circumstances which might have made it desirable for the Claimant to leave her work i.e. because she could not reconcile her continued employment with caring for her partner who had suffered a serious stroke.

The ET had believed that the case of Jones v Sirl & Sons (Furnishers) Ltd [1997] IRLR 493 applied with the effect that where there were mixed reasons for the employee's resignation, it was bound to consider the "effective, cause". But the EAT said that this was an error of law. The ET should have considered  Nottingham County Council v Meikle [2005] ICR 1 (the leading authority at Court of Appeal level where the principles of constructive dismissal are comprehensively discussed).

Where there is a mixture of motives, the question was not whether there was one cause which predominated over others, or which would on its own be sufficient, but whether the repudiatory breach "played a part in the dismissal". As Elias J had said in Abbey Cars (West Horndon) Ltd v Ford UKEAT 0472 07:

"…once a repudiatory breach is established if the employee leaves and even if he may have done so for a whole host of reasons, he can claim that he has been constructively dismissed if the repudiatory breach is one of the factors relied upon."

Accordingly, the EAT decided that the matter had to be remitted to the Tribunal to determine whether the employer's repudiatory breaches played a part in the Claimant's resignation. If it concluded that they did not and that the sole reason was her desire to care for her partner, then her claim would fail. If it decided the opposite, the Claimant would succeed.

What types of circumstances might allow an employee to terminate their employment?
In [Leeds Dental Team Ltd v Rose]() UKEAT/0016/13/DM, the Claimant worked as the Practice Manager in a dental surgery. She failed to record an employee's sickness absence properly and was called to a disciplinary hearing. She asked that she be accompanied by the dentist who used to own the practice but was refused permission and the hearing was aborted. The Claimant was then told that if she did not attend a rearranged hearing, she would not be paid. Shortly thereafter she went off sick and did not return before resigning. She claimed constructive unfair dismissal at the ET and won.

The Claimant put forward various alleged breaches of the implied term of trust and confidence which she said entitled her to resign:

* A unilateral change to her pay date from the last day of the month to the first day of the following month. The ET found this to be only a technical breach of contract and it did not form any part of the Claimant's reasons for resigning from her employment;

However, the following acts were found to breach the implied term of trust and confidence:

* the refusal to allow the Claimant to be accompanied by the dentist who was her former employer (prior to a sale of the practice under a TUPE transfer to the Leeds Dental Team Ltd) when there were no grounds for believing that the former employer's presence would prejudice the proper conduct of the disciplinary hearing; * the absence of any investigatory interview before the disciplinary hearing. Any reasonable employer would (in the present case) have invited the Claimant to an investigatory interview to put the allegations of improper conduct so that she had a full opportunity to address them and explain the apparent anomalies in her paperwork. It seemed more likely than not that the result of that interview would have been a realisation that there were competency issues in her role that needed support and training, rather than misconduct issues; * the Respondent's telling the Claimant she would not be paid if she did not attend the disciplinary hearing, when they expected her to attend without the companion of her choice; and * the Respondent's failure to disclose a member of staff's overtime sheet to the Claimant. That documentation had been examined in the course of the employer's investigation and relied upon as part of the disciplinary hearing, but the Claimant was never given a proper opportunity to consider it.

Employer's state of mind
The Leeds Dental Team Ltd appealed arguing that:

* the ET had erred in law in failing to make a finding as to the Respondent's intention in acting as they did towards the Claimant. That submission was based on the decision of the Court of Appeal in [Tullett Prebon PLC v BGC Brokers]() [2011] IRLR 420. It was contended that that case had changed the law and required the ET in a constructive dismissal case (where reliance was placed on a breach of the implied term of trust and confidence),  to find whether the employer had a subjective intention to act in such a way as to permit the employee to terminate the contract; and * the ET's decision was perverse.

The EAT dismissed the appeal. First they rejected the submission that the decision of the Court of Appeal in Tullett  had changed the law. The traditional (and correct) test required the ET in a constructive dismissal case "…to consider objectively whether the conduct complained of was likely to destroy or seriously damage the relationship of trust and confidence between employer and employee".

The EAT also held that perversity had not been demonstrated. Whether there has been a repudiatory breach is a highly context-specific question and is one of fact. The EAT considered that it was plainly open to the ET on the facts to regard the Respondent's conduct as amounting to a repudiatory breach. The high threshold for a perversity challenge had not been passed in this case.


***Employers often believe that if a person proposed by the employee to accompany them is not a companion who falls within the statutory provisions applicable to disciplinary hearings, (so that the employee could not make a separate complaint to the ET of a breach of those provisions), the companion is not be regarded as an appropriate companion at all and therefore the employee's request can simply be refused. As the **Leeds Dental Team Ltd** case confirms, this will not necessarily be the case and so regardless of any statutory entitlement, employers need to carefully consider the position before refusing to allow an employee to be accompanied at a disciplinary hearing.*

Where there is an unfair constructive dismissal, the issue of compensation may arise as in other types of dismissal cases. In [Symonds T/A Symonds Solicitors v Redmond-Ord]() UKEAT/0145/13/BA, the Claimant was granted unpaid leave until February 2010. She tried to resume work but the employer said that he had employed a temporary person until July and she would have to wait until then. The Claimant resigned in April, claimed constructive unfair dismissal and won at the ET. The ET awarded her compensation from the date at which she should have been permitted to return to work in February.

Cut-off for compensation
The employer argued that the Claimant's job became open again for her in July 2010. However, as she chose not to return to work, her loss should be limited to that date. But the EAT saw "no force" in that argument.  By virtue of section 123(1) of the Employment Rights Act 1996 the Claimant was entitled to loss sustained in consequence of her dismissal in so far as it was just and equitable for that loss to be awarded. There would be no warrant for imposing a "cut-off" in July 2010 unless she behaved unreasonably in failing to return to work. This was the very question which the ET had considered and decided against the employer. Given that the employer had committed serious breaches of contract by refusing to allow the Claimant to return to work, it could not sensibly be said that it was unreasonable for her to decide that she wished to work for someone else.

Pre-dismissal losses
The employer's second point was that as the contract terminated in April 2010 when the Claimant resigned and so loss prior to that date could not be awarded as compensation for unfair dismissal (GAB Robins (UK) Limited v Triggs. Therefore it was said that the ET had erred in law awarding loss from February 2010.

However, as this second issue had not been argued at the ET, the EAT had to decide whether to allow the argument to proceed at the appeal. The EAT commented that whilst the argument was technically correct that the loss which can be claimed in respect of a constructive unfair dismissal does not include loss flowing from wrongs already inflicted on an employee by the employer's conduct prior to termination, to allow the amendment to the appeal would be "…a legal technicality standing in the way of doing substantial justice between the parties." The EAT refused permission to amend the Notice of Appeal accordingly.

In passing, the EAT observed that if they had granted permission to amend the notice of appeal, an interesting question would have arisen as to whether the EAT itself had powers under section 35 of the Employment Tribunals Act 1996, to award compensation for any breach of the Claimant's contract  by  failing to employ her between February and April 2010. It is arguable that, given the Tribunal's findings on the question of breach of contract and loss, the Appeal Tribunal's powers would have been wide enough to permit this. It is also to be noted that in Wright v North Ayrshire Council (above), the EAT noted that where there is a variety of reasons for a resignation but only one of them is a response to repudiatory conduct, the compensation could be limited. So, in that case, the EAT commented that the ET might wish to evaluate whether in any event the Claimant would at some stage have left employment (to look after her partner) and adjust an award accordingly. This did not affect the principle to be applied in deciding breach: it merely recognised that the facts have a considerable part to play in determining appropriate compensation.

Time limit for claims
In constructive dismissal case (like other types of dismissal) the EDT is a crucial date. In [The Secretary of State for Justice v Hibbert]() UKEAT/0289/13/GE, the EAT considered an appeal as to when that date was and whether a claim was made in time.

The Claimant had raised two grievances which were not upheld. She then wrote a letter to the employer on 29 June 2012 saying "…there has been a fundamental breach of my employment contract by my employer and I have no alternative but to resign my position". The letter led to further correspondence and an apparent agreement between the parties that the Claimant's employment should end on 27 July 2012, (ie at the end of her 4 week notice period).

The Claimant brought her unfair dismissal claim more than 3 months after the date of 29 June but within 3 months of 27 July. She sought to argue that her EDT was 27 July and not 29 June and this was accepted by the ET.

The employer appealed and submitted that the Claimant's letter of 29 June 2012 was "unambiguous as to resignation" and should have led the Employment Judge to only one conclusion: that her dismissal was with immediate effect. It was contended that the case was indistinguishable from Sothern v Franks Charlesly & Co [1981] IRLR 278. Therefore, events post-dating the resignation letter were wholly irrelevant.

The Claimant submitted that the ET had been correct in its conclusion and in its analysis. Her contention was that the employer's letter to her of 3 July did not accept her resignation, but instead made an offer for her consideration. Further, she suggested that the employer's letter made clear that her contract continued until 27 July, which was stated to be her last working day.

At the appeal, when considering the Court of Appeal case of Sothern v Franks Charlesly & Co [1981] IRLR 278, the EAT pointed out that in that case, the words "I am resigning" were found not to be ambiguous. Fox LJ said "I interpret them as meaning I am resigning now. They indicate, it seems to me, a present intention of resigning" and Stevenson LJ described the words "I am resigning" as:

"a simple statement of the speaker's intention to give up a job or an office or a contest now…They do not naturally mean "I am going to resign in the future". They mean "I am resigning now" just as clearly as the shorter form for the present tense: "I resign" spoken, if you like, by the chess player who sees that checkmate is only a matter of a few moves away."

The EAT's conclusion was that "the present case was on all fours with the case of Sothern.  As a constructive dismissal case there was no question of the employer accepting or refusing to accept the employee's resignation; the resignation was an acceptance of the employer's fundamental breach of contract. Even though the employer had given the Claimant a "cooling off" period, this had no legal effect and did not change the EDT to the end of the notice period.

Special circumstances
However, there is a 'special circumstances' exception as explained in various case authorities. This is where the recipient of the resignation, before accepting or otherwise acting upon it, considers the circumstances in which it is given so as to satisfy themselves that the giver of the notice did in fact really intend what had apparently been said. In other words, whilst the "special circumstances" exception does not allow a unilateral retraction or withdrawal of a resignation, the employer must be satisfied that the person resigning really did intend to do so. Such a need will almost invariably arise in cases in which the purported notice of resignation has been given orally in the heat of the moment by words that may quickly be regretted.

In the present case, the fact that the employer's letter had stated that the Claimant was required to give four weeks' notice and that her last working day would be 27 July 2012 (and she was to be paid for that period), had no legal effect. As a matter of law, the Respondent resigned on 29 June 2012 without notice by reason of the employer's conduct and the effective date of termination was therefore 29 June 2012.

Accordingly, the unfair dismissal claim was lodged out of time and the Employment Tribunal had no jurisdiction.

Mark Shulman is a Consultant Solicitor with Keystone Law and an accredited workplace and employment mediator.

Published: 08/11/2013 15:04

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