Repudiatory breach of contract

An employee can claim constructive dismissal if they are able to show that the employer committed a repudiatory breach of contract, that the employee accepted that breach, treated the contract at an end and, in response, resigned from their employment.

Sometimes, employees who have committed a serious disciplinary offence are reluctant to attend a disciplinary hearing because they know they are likely to be dismissed.  Some employees have accused the employer of ‘heavy handed treatment’ and used this as an excuse not to attend the disciplinary hearing.                 

In a recent case, Atkinson v The Community Gateway Association, the employer discovered that the employee had overspent £1.8 million.  At the time, the employee had been in a relationship with a woman who was employed by another housing association; he had written overtly sexual emails to her (contrary to the employer’s email policy), encouraged her to apply for a job with his own employer, and told her what to expect at interview and how to make her presentation.  He also suggested to a colleague that she should be appointed.

When the employee was invited to a disciplinary hearing, he disagreed with the procedure being followed and resigned before the disciplinary hearing had been concluded.

He made a claim for constructive dismissal but at the tribunal hearing the employer successfully applied to strike out his constructive dismissal claim on the grounds that it had no reasonable prospects of success.  It argued that the employee was barred by law from claiming to have been constructively dismissed because of his own prior repudiatory breaches of contract.

However, the Employment Appeal Tribunal (EAT) overturned the tribunal’s decision and stated that the employee did have the right to make a claim for constructive dismissal.  It stated that if an employee who had originally been at fault successfully brought a constructive dismissal claim, the tribunal was inevitably required to consider reducing compensation.  It said that compensation could be reduced by up to 100% (so that no compensation would be awarded) if it was established that the employee would have been fairly dismissed in any event.

The employee had also argued that by viewing his “overtly sexual emails”, the employer had breached his human rights (Article 8) because he had an expectation of privacy.  The EAT held that the employer had discovered the emails as a result of its legitimate investigation into his conduct and took the view that this did not amount to an unjustified interference with his private life.  It noted that as the employee himself had written the policy he could not have expected emails, which were not marked personal or private, to have been overlooked by the employer during its investigation.

This decision means that an employer is unlikely to succeed in an application to have the claimant’s claim struck out in similar circumstances.  But it also makes it clear that the tribunal must consider reducing any compensation awarded and could award no compensation at all.  The risk of being reduced or no compensation should deter employees from making claims such as these.

Reggie Lloyd
01206 217347
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