What is constructive dismissal and does raising a grievance prevent an employee bringing a constructive dismissal claim?
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Gordon v J & D Pierce (Contracts) Ltd UKEATS/0010/20
A recent case has held that an employee who engaged in their employer's grievance procedure did not affirm their employment contract, for the purposes of a constructive dismissal claim.
What is constructive dismissal?
Whilst 'constructive dismissal' is not referred to in statute, a constructive dismissal occurs where the employee resigns in response to conduct by the employer that amounts to a repudiatory breach of contract. Where an employer has committed a repudiatory breach, the employee may "accept" the repudiation by resigning, usually without notice.
The overarching principle is that, once the employer commits a repudiatory breach of the employment contract, the employee may either affirm the contract and it will continue as before, or accept the repudiation and end the contract. Therefore, an employee must act without delay following the repudiatory breach, or they risk affirming the contract.
Facts of the Gordon case
The Claimant worked for his employer as a commercial manager from July 2008 to April 2019, when he resigned and brought a claim for constructive dismissal after the working relationship with his manager deteriorated.
What the ET held
An Employment Judge held that the Claimant could not succeed with his constructive dismissal claim because he had affirmed his employment contract by engaging in his employer's grievance procedure. The Employment Judge commented that, in the circumstances, there had been "fault on both sides", but noted that even if there had been a fundamental breach of contract entitling the Claimant to resign, he still wouldn't have succeeded due to the affirmation. The Claimant appealed to the Employment Appeal Tribunal (EAT).
What the EAT held
The EAT rejected the Claimant's appeal for other reasons, but did disagree with the Employment Judge on the affirmation of contract point. The EAT considered whether raising a grievance prevents an employee from claiming constructive dismissal. The EAT held that "where an employee intimates that he considers the contract has come to an end, he is not to be taken to affirm that the contract has come to an end for all purposes. In particular I do not consider that the parties can be presumed to intend that a clause designed to procure the resolution of differences should be regarded as being evacuated because one party asserts that the implied obligation of trust and confidence has been breached". Therefore, the exercise of a right of raising a grievance should not be regarded as affirming the contract of employment as a whole.
This decision acts as a timely reminder for employers facing constructive dismissal complaints; it demonstrates that grievance provisions may be regarded as severable from the remainder of the contract and capable of surviving independently, even where the remainder of the contract is regarded as terminated through breach.
This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact Emily Edwards to discuss any issues you are facing.