Constructive dismissal – two wrongs can make a right

23 September 2014

For some years a debate has raged in the Employment Tribunals and Courts whether an employee who has, often unbeknownst to the employer, committed a serious ‘repudiatory’ breach of his or her contract of employment can rely on a later serious breach by the employer to bring a claim of constructive unfair dismissal.

The recent case of Atkinson v Community Gateway Association seems to have clarified the position.

In this case a Housing Association Director of Resources resigned in the face of a disciplinary investigation of, firstly, his involvement in significant corporate overspend and, subsequently, allegations of misuse of his employer’s email system to send emails of a sexual nature. The latter at least arguably amounted to a previous fundamental breach of contract by the employee himself.

The employee claimed constructive unfair dismissal. At first instance the Employment Judge found that his claim could not succeed because he himself was in fundamental breach of contract before the alleged serious breach of contract by his employer.

The Employment Appeal Tribunal looked at the conflicting authorities including a recent Scottish case – McNeill v Aberdeen City Council and decided that the mutual and on going obligation of trust and confidence is not broken, suspended or put in abeyance when one party has in fact broken that duty unless and until the “innocent” party accepts it. The employer was ignorant about the offending emails when it initiated the disciplinary action in relation to the overspend and had not therefore acted on or “accepted” that breach. The employee could therefore in theory succeed on his constructive dismissal claim.

Comment – as is so often the case with “constructive dismissal” claims, the real issue in this case was whether the employee was fairly dismissed. If the dismissal was a constructive fair dismissal then he would not be entitled to compensation. Even if the dismissal was a constructive unfair dismissal his compensation could be reduced to nil on Polkey principles to reflect his culpability.

Let’s hope that after September 18th the English and Welsh continue to benefit from Scottish jurisprudence at least.

(Atkinson v Community Gateway Association)

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