We have a similar situation to that of Liverpool Football Club, which admitted to holding talks with a potential replacement for manager Rafael Benitez, without his knowledge, while he was still employed. The manager at our company is now seeking to make a claim against us. What rights do employees have if they find out their employer is seeking to replace them?
All employers must be careful not to breach the duty of mutual trust and confidence that exists in contracts of employment, by words or acts that they know, or should know, are likely to undermine the employment relationship.
A declaration by the employer that they considered replacing an employee could certainly undermine his or her position and their authority with colleagues. If they were to feel that their position was untenable and that they had no option but to resign, there is a good chance that they would succeed in a claim for constructive dismissal. This would equally apply where the employee found out by other indirect means.
The courts would look at the whole relationship, including the context in which the comments were made. Even if no one comment was sufficiently serious to undermine the relationship, if the whole course of events could be interpreted as a serious breach of the employer’s duties towards the employee, they could still resign and claim constructive dismissal. This is known as the final-straw doctrine. However, it should be noted that a breakdown in the relationship often has fault on both sides.
Where an employer has breached the contract, the employee is under a duty to attempt to mitigate their loss by looking for a job elsewhere. If the employee fails to make sufficient effort, the compensation payable by the employer would be reduced, as it would be difficult to argue in most cases that the employee would not get a job within two years.
Richard Linskell, partner, Dawsons solicitors