Ruling makes change to constructive dismissal law

When disciplining staff in public over a ‘buy one, get one free’ promotion
causes a case of constructive dismissal

The importance of the duty of trust and confidence was recognised more than
20 years ago but the EAT’s recent ruling in Morrow v Safeway Stores Plc, 2001,
represents an important new development in the law relating to constructive dismissal.

Morrow was employed by Safeway Stores as the bakery production controller at
its Swindon store. She complained of constructive dismissal on the grounds that
for several months she had been subjected to harassment and unreasonable
pressure by the store manager and that she had received no support from her
staff or from her assistant.

In particular she relied on an incident that occurred on 20 August 1999 when
the store manager gave her a severe telling off in front of other members of
staff and at least one customer.

Among other things, the store manager said to her, "If you can’t do the
job I pay you to do, then I will get someone who can." On returning two
hours later, he found that things were still not right and reprimanded Morrow
once more.

Morrow resigned from her employment three weeks later and brought
proceedings before an employment tribunal, complaining of constructive
dismissal.

At the hearing, the store manager admitted he had made the comments about
which Morrow complained but said he was angry because Morrow had failed to
carry out her duties properly.

At the time, Safeway was running a "buy one, get one free"
promotion in the bakery department. Morrow had failed to make sure there was a
sufficient supply of bread to ensure customers received a free
"bloomer" loaf.

The tribunal concluded that "disciplining staff in public is plainly to
be deprecated", but "it did not appear…that what he said was, in
itself, particularly unreasonable given the background and the applicant’s
continuing failure to make available the supplies of the particular bread –
which was inevitably in demand at the time".

The tribunal therefore ruled that although the store manager’s behaviour did
amount to a breach of the implied term of trust and confidence, the breach was
not sufficiently serious to justify Morrow’s complaint of constructive
dismissal.

In addition, the tribunal felt Morrow should have attempted to resolve her
various grievances through the company’s grievance procedure before resigning.

Morrow then appealed on the grounds that the tribunal had got the law wrong.

EAT decision

Allowing the appeal, the EAT ruled:

– The case law established that the implied duty of trust and confidence is
a fundamental term of the employment contract

– Where an employer is shown to have acted in breach of this term, an
employee will be entitled to treat himself or herself as constructively
dismissed

In the present case, it was not clear whether the employment tribunal had in
fact found that the behaviour of the store manager was sufficiently serious to
amount to a breach of the duty of trust and confidence. Therefore the case was
sent back to the tribunal for a rehearing.

Key points

– It is an implied term in every contract of employment that an employer
will not, without reasonable cause, act in a manner which is calculated and
likely to undermine the relationship of trust between the parties or act in
manner which is likely to seriously damage that relationship

– This term is fundamental to the employment relationship, which means if
the employer breaks it, a member of staff will be justified in treating himself
or herself as constructively dismissed

– Whether the term is broken is ultimately a question for the employment
tribunal to determine. However, there may be cases where the employee will be
justified in resigning without first trying to resolve matters through the
employers grievance procedure. This could well change once the proposals in the
Government’s new Employment Bill are in force.

By Anthony Korn a barrister at 199 Strand Chambers

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