Last straw over issue of constructive dismissal

Staff
do not have to resign at the first sign of trouble to claim constructive
dismissal, the EAT has ruled.

The
case of Abbey National v Robinson, EAT, 20 November 2000, has added a whole new
dimension to the law relating to constructive dismissal. In certain
circumstances, an employee is now entitled to claim constructive dismissal
almost a year after the breach of contract by the employers. 

Constructive
dismissal has always been a potent weapon in an employee’s arsenal, enabling
such an employee to take the initiative and manage his or her own exit policy.
Section 95(1)(c) of the Employment Rights Act 1996 states that there is a
dismissal where the employee terminates the contract "in circumstances in
which (the employee) is entitled to terminate it without notice by reason of
the employer’s conduct". 

For
the purposes of section 95(1)(c) such conduct must involve a repudiatory breach
of contract by the employer and the employee must react immediately or as soon
as possible thereafter. Failing this, he or she may be deemed to have waived
the repudiatory breach and affirmed the contract, thereby losing the right to
claim constructive dismissal.

Facts
of the case

From
1996 onwards, Robinson was repeatedly bullied and harassed by her line manager,
resulting in a formal complaint in April 1997. In credit to Abbey National, the
complaint was investigated and disciplinary action was taken against the
manager concerned, the intention being to move the manager into another
department.

In
June 1997, however, while Robinson was on sick leave as a result of stress
caused by the manager’s actions, she was informed that the manager was not to
be moved. She attended a meeting in August 1997 to discuss her return to work
but was offered no alternative employment and consequently remained
disillusioned, frustrated and unwell resulting in a further period of sick
leave. 

Almost
a year later, a further meeting was held after which Robinson concluded that
she was never going to be offered an alternative position by Abbey National.
After receiving two letters from Abbey National’s personnel department, one
offering her alternative employment and one in- forming her that it was no
longer available, she decided that this was the "last straw" and
resigned on 26 July 1998, bringing a claim for unfair constructive dismissal.

Abbey
National did not dispute the fact that Robinson was entitled to resign and
claim constructive dismissal but alleged that such a claim should have been
brought in August 1997 and not more than a year later. Such argument was based
on existing authorities at the time, including the leading case of Western
Excavating (ECC) v Sharp, CA 1978, ICR 221, in which the Court of Appeal held
that any resignation on the grounds of constructive dismissal must take place
soon after the conduct complained of and any delay could constitute affirmation
of the contract.

EAT’s
finding

The
Employment Appeal Tribunal found that Abbey National’s failure to move the
manager concerned and failure to offer Robinson alternative employment was the
start of the breakdown in the relationship of trust and confidence that
eventually led her to resign. Such breakdown continued throughout the following
year as a result of Abbey National’s unreasonable and insensitive treatment of
Robinson and culminated in the contradictory letters received from the
personnel department. 

Conclusion

Employees
will now not be forced to decide whether to jump ship and claim constructive
dismissal at the first sign of a breakdown in the relationship of mutual trust
and confidence for fear of a finding that any delay would constitute
affirmation of the contract, and can afford the employer the opportunity to
repair any damage done and make amends.

Failure
to take such steps by the employer will constitute the last straw. This is an
extremely important case in a familiar area of employment law.

By
Mark O’Neil, senior associate in employment law at Sinclair Roche &
Temperley, 020-7452 4224

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