September 17, 2014

Employee’s breach of contract is not fatal to constructive dismissal claim

The Claimant resigned his post as Director of Resources during an ongoing disciplinary process against him. The investigation initially covered his responsibility for a substantial over-spend but then widened to incorporate misconduct in sending emails containing sexual content from the company’s email system. These were not marked private or personal which the Association’s policy required – a policy which he himself had drafted. The Claimant resigned and claimed he has been constructively dismissed but the Tribunal struck out his claim on the basis that, as he was himself in fundamental breach at the time of the Association’s alleged fundamental breach, he was precluded from claiming that he had been constructively dismissed.

On appeal to the EAT, the EAT commented that the authorities were not completely consistent on this point but it picked up on the McNeill v Aberdean City Council case which it considered set out the correct principle, which was that the obligation of trust and confidence of each party to a contract of employment is not suspended because one party has breached that obligation. So if one party commits a fundamental breach and the other does not accept it, whether because they do not know about it or otherwise, the contract continues. It therefore remitted the constructive unfair dismissal claim back to the Tribunal.

This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.

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