December 2008

Constructive Dismissal Case

The following case was heard at a Shrewsbury employment tribunal in October 2008.

The claimant was employed by a large national dealer group as a service manager from 1997 until his resignation in December 2007. The claim was for constructive unfair dismissal, in that since July 2007 it was alleged that the managing director had conducted a campaign of bullying and harassment against the claimant which amounted to a fundamental breach of contract entitling him to resign his position.

The appropriate legal test as applied by the tribunal is set out in London Borough of Waltham Forest -v- Omaliju (2205) IRLR 35 Dyson LJ and was summarised by the tribunal as follows :-

1. The test of constructive dismissal is whether the employer's actions or conduct amount to a repudiatory breach of the contract of employment (Western Excavating -v- Sharp (1978) IRLR 27).
2. It is an implied term of any contract of employment that the employer shall not without reasonable or proper cause conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. This is referred to as the implied term of trust and confidence.
3. Any breach of the implied term of trust and confidence will amount to repudiation of the contract. The very essence of the breach of the implied term is that it is calculated or likely to destroy or seriously damage the relationship.
4. The test of whether there has been a breach of the implied term is objective. The conduct relied on as constituting the breach must impinge on the relationship in the sense that, looked at objectively, it is likely to destroy or seriously damage the degree of trust and confidence the employee is reasonably entitled to have in his employer.
5. A relatively minor act may be sufficient to entitle the employee to resign and leave his employment if it is the last straw in a series of incidents. Many of the constructive dismissal cases which arise from the undermining of trust and confidence can involve the employee leaving in response to a course of conduct carried on over a period of time. The particular incident which causes the employee to leave may in itself be insufficient to justify taking that action, but when viewed against a background of such insights that may be considered sufficient by the courts to warrant their treating the resignation as a constructive dismissal. It may be the last straw which causes the employee to terminate a deteriorating relationship.

In essence the claimant invited the tribunal to conclude that there had been a breach of the implied term of trust and confidence by the conduct of the Managing Director towards him during the period July 2007 to December 2007. There were a number of disputes of fact in the case between the claimant and the MD, and also disputes of interpretation of incidents where the facts were not essentially in dispute.

The tribunal had to consider whose evidence it preferred in relation to these disputes. It unhesitatingly concluded that it preferred the evidence of the Managing Director and stated that whilst there were a number of reasons for its conclusion it was sufficient to outline two :

The first of these was that the claimant gave evidence that after submitting his resignation in December 2007 he joined a new employer in January 2008. His evidence in cross examination was that he had had no more than ‘casual contact’ with the MD of the new employer in August and September of 2007, but that he could recall no further contact before receiving a written offer of employment on 14th December 2007. This letter was produced at the tribunal, which found it impossible to understand (the letter made reference to specific discussions about the role the claimant was to undertake) if the claimant was correct in suggesting that there had been no contact since casual discussions in August and September. Whilst the tribunal found that this would not in itself be fatal to the claim, it raised serious doubts as to the claimant's credibility in that the tribunal were not convinced that the claimant was telling the truth of the matter.

The second related to one of the essential parts of the claimant's claim. One of his allegations was that he was forced against his wishes to "manage out" several good staff members with excellent performance records simply because the MD did not like them. In particular, it was part of the claimant's case that he was pressured into taking a harsher disciplinary sanction against an employee for inappropriate behaviour during a specific incident than he would have done of his own volition in an attempt to force the employee out of the company. In fact, prior to the disciplinary hearing with the employee, it was shown that the claimant received a letter from the MD which emphasised the MD's desire to remain impartial throughout the proceedings, and further made it clear that the decision to proceed with disciplinary action against the employee was entirely that of the claimant's.It was plainly apparent to the tribunal that not only was the MD not putting pressure on the claimant to take any untoward disciplinary action against the employee, but was indeed openly encouraging him not to take any further disciplinary action. This impression was subsequently bolstered by the unchallenged evidence of a witness that it was the claimant who wished to dismiss the employee after the incident, and that it was only as a result of the MD's letter that the claimant was effectively persuaded that it was sufficient that the employee be given a warning.

The incidents relied upon by the claimant in support of his contention that there was a campaign of bullying and harassment were various. However the tribunal found that none of them either taken individually or cumulatively were capable of amounting to a breach of contract by the respondent, let alone a sufficiently significant breach of contract that it could be categorised as fundamental or repudiatory entitling the claimant to resign, and that accordingly the claim was found by the tribunal to have failed.

If you have any questions or comments relating to these cases, please contact Adam Cox .