Legal opinion: Constructive dismissal – when should employers admit fault and apologise?

Can an employer avoid a finding of constructive dismissal if it admits it is at fault and apologises to the employee in an attempt to put things right and avoid the employee’s resignation? Solicitor Laurence O’Neill looks at the case law.

In 2010, the Court of Appeal gave its judgment in the case of Buckland v Bournemouth University Higher Education Corporation [2010] EWCA Civ 121. One of the Court’s significant findings in that case was that, once an employer had committed a fundamental breach of an employee’s contract, it could not repair that breach by any subsequent action, such as admitting fault or apologising to the wronged employee in any subsequent grievance process. Following Buckland, one option to employers that were concerned that they may have committed a fundamental breach of contract was simply not to accept any wrongdoing. After all, the employer could not repair the breach and any admissions of fault could serve to improve an employee’s future claim for constructive dismissal.

However, in the recent case of Assamoi v Spirit Pub Company (Services) Ltd UKEAT/0050/11, the Employment Appeal Tribunal (EAT) held that, where an employer’s behaviour towards an employee had the potential to amount to a fundamental breach but had not quite done so, how the employer responded to the employee’s grievance – admitting fault and apologising where appropriate – could well make the difference between whether a fundamental breach will be found to have occurred or not.

Clearly then, where an employer believes a constructive dismissal claim may be on the cards, its decision about whether or not to accept fault and apologise to the employee may be informed by its view about whether a fundamental breach has already occurred or not. However, this will almost always be a fine distinction to draw. So, what is an employer to do?

Has a fundamental breach occurred?

Unfortunately, not much assistance was given by the EAT in Assamoi. In his leading judgment, Judge Pugsley observed: “There is a fundamental distinction, which is perhaps more easy to recognise than to define, between there being a fundamental breach of contract that an apology by an employer cannot cure and there being action by an employer that can prevent a breach of contract taking place.” If the court was at such difficulty to define the distinction, perhaps it may not be such a fundamental one after all.

Things get worse for employers in this space between Buckland and Assamoi in that there is, in any event, no litmus test in law that tribunals use to determine whether or not a breach or a course of conduct is, or has become, serious enough to be fundamental. The basic test is that the breach must go to the root of the contract or show that the employer no longer intends to be bound by one or more of the essential terms of the contract. However, that will turn on the facts and will be left to the tribunals to decide on a case-by-case basis.

Importance of impartial grievance proceedings

While the state of the law is not best placed to assist with an employer’s decision of whether or not to admit fault in such circumstances, perhaps the first thing that these decisions should do is to remind employers of the importance of having grievance officers who are, as far as is possible, removed from the events that have occurred and the people involved, and to consider using external HR consultants to hear grievances in certain cases. Only then may the employer come close to achieving a level of objectivity similar to that applied by any future tribunal called upon to decide whether or not a breach has occurred.

Where the objective grievance officer is not convinced that the employer is at fault, an apology is unlikely to be appropriate. However, where the officer believes the employer may be at fault, the employer’s approach as regards offering any apology should be guided by such factors as the extent of the fault, whether or not the relationship is likely to be salvaged by an apology, and the likelihood of the employee resigning and claiming constructive dismissal. Where fault must be admitted, employers should consider drafting grievance responses in such a way as to help mend a potentially broken relationship without giving the employee ammunition to use against it in a future constructive dismissal claim. Wherever in doubt, legal advice should be sought.

Laurence O’Neill is an assistant solicitor in the employment department at SGH Martineau LLP

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