Constructive Dismissal UK: A Comprehensive Guide to Repudiatory Breach and Unfair Dismissal Claims
Introduction to Constructive Dismissal
Constructive dismissal is a statutory concept that allows an employee to treat their employment as terminated by their employer, even if the employee is the one who resigns. This occurs when an employer commits a breach of contract so serious that it justifies the employee resigning without notice. The legal framework for constructive dismissal is outlined in section 95(1)(c) of the Employment Rights Act 1996 (ERA 1996), stating that an employee is dismissed if "the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct".
This area of employment law is particularly complex and fact-sensitive, often involving nuanced interpretations of employer conduct and employee response. For employees who feel they have been forced to resign due to their employer's actions, understanding the elements required to establish a claim is crucial.
Key Elements of a Constructive Dismissal Claim
To establish a constructive dismissal claim, three essential elements must be present:
Repudiatory breach on the part of the employer: The employer must have committed a serious breach of an express or implied term of the employment contract.
An election by the employee to accept the breach: The employee must resign in response to this breach, treating the contract as terminated.
No delay in accepting the breach: The employee must not delay too long in resigning, as this could be seen as "waiving" the breach and affirming the contract.
Understanding Repudiatory Breach by the Employer
A repudiatory breach is a breach of contract that is sufficiently serious to go to the root of the employment contract, demonstrating an employer's intention to no longer comply with its terms. This breach can be an actual breach, where an employer has already violated a term, or an anticipatory breach, where they indicate an intention to do so. It's important to note that the employer's intention to end the employment relationship is not required; only that their actions demonstrate an intention to no longer comply with the terms in a serious way.
A common type of repudiatory breach involves the breach of implied terms in an employment contract, such as the implied term of mutual trust and confidence. This term requires employers not to conduct themselves in a way that is "calculated or likely to destroy or seriously damage the relationship of trust and confidence".
Examples of conduct that tribunals have found to constitute repudiatory breaches include:
Unilateral changes to contractual terms: A significant pay cut imposed unilaterally by an employer can amount to a repudiatory breach, as no employer can have "reasonable and proper cause" for such an action. Similarly, a lawful notice of termination coupled with an offer of re-engagement on new terms does not, by itself, amount to a repudiatory breach of the implied term of trust and confidence. However, a change in duties that effectively de-skills an employee or removes their core responsibilities can be a repudiatory breach, such as replacing hands-on architectural duties with purely managerial ones.
Inappropriate employer conduct:
In Private Medicine Intermediaries Ltd and others v Hodkinson, the EAT upheld a tribunal's decision that writing to an employee on sick leave for work-related stress to raise non-serious or non-urgent concerns amounted to a repudiatory breach of the implied term of mutual trust and confidence.
Withholding company sick pay when an employee is entitled to it, even if the employer suspects the sickness is not genuine, has been found to be a fundamental breach, especially when other contractual provisions could address such suspicions (Singh v Metroline West Ltd).
An unannounced phone call from a line manager to an employee on sick leave, criticizing their social media activity, was found to be a breach of mutual trust and confidence, especially when the manager knew the employee was highly anxious and distressed (Lindsay v HBOS Plc).
It is crucial to understand that, in assessing whether an employer has committed a repudiatory breach, the "range of reasonable responses" test (familiar from ordinary unfair dismissal law) is not relevant. The test is objective: whether the employer's actions constituted a fundamental breach of contract.
The "Last Straw" Doctrine
A single, isolated act by an employer might not be enough to constitute a repudiatory breach. However, under the "last straw" doctrine, an employee can resign in response to a series of breaches or a course of conduct which, taken cumulatively, amounts to a breach of the implied term of trust and confidence. The "last straw" itself does not need to be a repudiatory breach; it merely needs to be the final act in a series of acts that, when viewed as a whole, amount to a fundamental breach. This concept is sometimes referred to as "conduct that crosses the Malik threshold".
Even if the "last straw" act is seemingly innocuous or non-discriminatory, it can still serve to revive an employee's right to terminate if the employer's overall conduct has been repudiatory. However, a "without prejudice" letter, which proposes terms for termination, is generally privileged and cannot be disclosed to support a "last straw" claim unless there's dishonesty or unambiguous impropriety (Brodie v Nicola Ward).
Employee's Acceptance of the Breach
For a constructive dismissal claim to succeed, the employee must unequivocally accept the employer's repudiatory breach by resigning from their employment. The resignation must be in direct response to the breach.
The Effect of Delay on Constructive Dismissal Claims
A significant factor is whether the employee delayed too long in resigning, as this could be interpreted as "affirming" the contract and waiving the right to claim constructive dismissal. The period of delay that is considered "too long" is a question of fact and degree for the tribunal, depending on the specific circumstances of each case.
Impact of sick leave: The EAT has recognised that an employee being on sick leave is a relevant factor when determining whether a delay in resigning precludes a constructive dismissal claim. In Chindove v William Morrisons Supermarket plc, the EAT held that inferences cannot be drawn as easily from an employee's delay in resigning when they are on sick leave. Similarly, accepting sick pay, even for 39 weeks, does not automatically mean affirmation if the employee was too ill to resign sooner, though this is fact-sensitive (Colomar Mari v Reuters Ltd).
Contextual assessment: Tribunals should consider all relevant factors, not just the length of delay. For example, in Leaney v Loughborough University, the EAT found that a tribunal should have considered the nature of work done during a summer holiday period and ongoing negotiations, rather than simply assuming affirmation due to delay.
Engaging in grievance procedures: There has been conflicting judicial opinion on whether engaging in an employer's grievance procedure amounts to an affirmation of the contract. Some views suggest that appealing a disciplinary decision is unlikely to be an unequivocal affirmation (Kaur v Leeds Teaching Hospitals NHS Trust). Conversely, other views hold that exercising a right of appeal under the contract, without withdrawing it, objectively indicates a desire to be restored to employment and treated as continuing employment (Patel v Folkestone Nursing Home Ltd).
Resigning "With or Without Notice"
At common law, an employee relying on wrongful repudiation typically had to resign without notice to avoid affirming the contract. However, statutory provisions for constructive dismissal in unfair dismissal or redundancy pay claims explicitly state that an employee "terminates the contract... (with or without notice)". This means giving notice does not, by itself, constitute affirmation for statutory purposes.
However, there is a risk of affirmation if an employee gives more notice than contractually required. In Cockram v Air Products plc, an employee who gave seven months' notice when his contract required three was found to have affirmed the contract because the extra performance was solely for financial reasons. This was distinguished from Buckland v Bournemouth University Higher Education Corporation, where a professor giving longer notice for "altruistic" reasons (to avoid disrupting students) was held not to have affirmed the contract. Recent EAT guidance in Humby v Barts Health NHS Trust confirms that there is no absolute rule; all relevant context, such as uncertainty about notice period or COVID-19 implications, must be considered.
Causation in Constructive Dismissal Claims
The employee must show that the employer's repudiatory breach was a reason for their resignation. The breach does not have to be the sole or principal reason for resignation; it merely needs to have "played a part" in the employee's decision to leave. This is known as the Meikle principle (Meikle v Nottinghamshire County Council). Tribunals should not focus on identifying a single "effective cause" but rather determine if the repudiatory breach was "one of the factors relied upon".
An employee's prior breaches of contract can sometimes be relevant to whether the employer's conduct amounted to a repudiatory breach of trust and confidence. However, a High Court ruling in Tullett Prebon plc v BGC Brokers LP stated that where an employer doesn't terminate after an employee's fundamental breach, the contract remains, and the employee can still terminate if the employer then commits a fundamental breach. The employee's conduct can be relevant to judging the employer's conduct in damaging trust and confidence.
In cases of "egregiously performed" contracts (e.g., severe underpayment), a tribunal may safely infer the reason for leaving even without direct evidence of the employee resigning in response to the breach (Mruke v Khan).
Constructive Dismissal and Discrimination/Harassment
Constructive dismissal can be inextricably linked with claims of discrimination and harassment. An employee who is constructively dismissed may also bring claims under the Equality Act 2010 (EqA 2010).
Historically, there was debate about whether constructive dismissal itself could amount to an act of harassment. However, in Driscoll (née Cobbing) v V & P Global Ltd, the EAT overturned an earlier decision, confirming that where an employee resigns in response to repudiatory conduct that constitutes or includes unlawful harassment related to a protected characteristic, the constructive dismissal is itself capable of constituting "unwanted conduct" for the purpose of harassment under section 26 EqA 2010. For example, in Knight v Havant & South Downs College, a constructive dismissal was found to be an act of harassment where a senior colleague's email accusing the employee of "throwing the E & D Black comment" was one of the reasons for resignation.
Compensation for successful constructive dismissal claims may include awards for injury to feelings, particularly where discrimination or harassment is proven. For instance, Miss Molyneaux was awarded injury to feelings in the middle Vento band due to the significant impact of discriminatory acts linked to her disabilities, further increased by victimisation.
Bringing a Constructive Dismissal Claim at the Employment Tribunal
Drafting the ET1: A claimant must use the standard ET1 form to present a claim. It is essential to clearly and succinctly set out the background and specific details of the claim, demonstrating how the requirements for constructive dismissal are met. Sample ET1 forms are available for various types of claims, including constructive dismissal linked to sex harassment.
Time Limits and Early Conciliation: Claims for unfair dismissal, including constructive dismissal, have strict time limits. Generally, a claim must be presented within three months of the "effective date of termination" (which, for constructive dismissal, is the date the employee resigns). Before presenting a claim, mandatory Acas Early Conciliation is usually required, which can extend the limitation period. It is the claimant's responsibility to appraise themselves of these time limits.
Funding Options: Claimants should be advised on various funding options for legal costs, including whether public funding or insurance cover is available.
Evidence and Witnesses: The claimant's statement should comprehensively cover all evidence related to the claim. Credibility of witnesses is a key consideration.
Acas Code of Practice: Compliance with the Acas Code of Practice on Disciplinary and Grievance Procedures is important. Unreasonable failure to comply by either party may lead to an increase or reduction of compensation by up to 25%.
Artificial Intelligence in Case Preparation: Parties should be aware of the risks of relying on AI in case preparation. Fabricated authorities generated by AI systems have been identified in tribunal settings, highlighting the importance of verifying information.
Conclusion
Constructive dismissal claims are inherently challenging, requiring a thorough understanding of contract law, employment statutes, and extensive case law. The principles underlying such claims are deeply rooted in the concept of a fundamental breach of trust and confidence by an employer, compelling an employee to resign. Navigating the intricacies of repudiatory breach, the "last straw" doctrine, the timing of resignation, and causation requires careful legal analysis and strategic planning.
For employees considering a constructive dismissal claim, it is essential to seek expert legal advice promptly. An experienced employment law professional can help assess the merits of your case, gather necessary evidence, draft robust claims, and guide you through the employment tribunal process. For employers, understanding these principles is equally vital to prevent potential claims and manage workplace relationships effectively.
How employmentlawuk.co.uk Can Help:
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