Employers beware: It may now be easier to claim constructive dismissal

17 June, 2014

The case of Wright v North Ayrshire Council has provided us with further clarification on the test for constructive dismissal.

 

A constructive dismissal occurs where the employer does not dismiss the employee, but the employee resigns and can show that they were entitled to do so by virtue of the employer’s conduct.

 

In the above case the council had failed to deal properly with three grievances and the claimant had also been the subject of an allegation of theft that turned out to be entirely misplaced. The employment tribunal had found that the first two legal requirements for a claim for constructive dismissal had been satisfied. Specifically, that there was a breach of contract by the employer and that the breach was so fundamental that it indicated that the employer had effectively refused to perform its side of the contract. The question was whether the claimant had resigned in response to those breaches.

 

The claimant gave evidence regarding her difficult personal circumstances, which included unforgiving work shifts and attempts to reorganise her working pattern to accommodate her caring duties at home, which had been unsuccessful. The potential reasons for her resignation were in part due to the council’s breaches, but also her personal circumstances. The tribunal found that the claimant could not manage caring for her partner and the demands of her job and this was the effective cause of her resignation, not the council’s breaches. The tribunal therefore concluded that she had not been constructively dismissed.

 

The claimant’s appeal was allowed by the employment appeal tribunal on the basis that the council’s breach was one of the factors relied upon by the claimant in resigning, in which case she could claim constructive dismissal.

 

It was previously commonly understood that an employer’s breach of an employee’s contract had to be the principal reason why the employee resigned. However, this case has made it clear that even if the employee leaves for ‘a whole host of reasons’, the question is whether the employer’s breach played a part in the resignation, not whether it is the principal reason for the resignation. Importantly, the employer’s breach does not need to be the primary or main motivation behind the employee’s decision to resign.

 

Employers should therefore be aware that even where the employee has a number of reasons that contribute to their resignation, including personal reasons that as long as an element of the decision to resign is based on the employer’s breach of contract, that is enough to succeed in a claim for constructive dismissal.

 

If the employee does have a mixture of reasons for resigning, these will however be taken into account by the tribunal when assessing the level of compensation. An employer’s liability could be limited, to the extent that its behaviour was not the principal reason. Tribunals will need to evaluate whether due to factors other than the employer’s conduct, the employee would have left employment in any event and adjust any award accordingly. If the claimant would have resigned anyway it might be difficult to show that any loss had been suffered.