Staying or Delaying? – Constructive Unfair Dismissal Claims

Staying or Delaying? – Constructive Unfair Dismissal Claims

Where an employer has committed a fundamental breach of an employment contract, an employee is entitled (if they have two or more years of service) to resign and bring a claim of constructive unfair dismissal.

Once the employer has committed a material breach, the employee has a choice whether to treat the contract as terminated (to resign and claim constructive dismissal) or to affirm the contract (to “forgive” the employer and continue on with the employment). The risk for an employee is that if they wait too long before resigning following a breach by the employer, the right to claim constructive dismissal can be lost, as they may be deemed to have “affirmed” the contract.

The recent decision of the Employment Appeal Tribunal in Leaney v Loughborough University considers the issue of affirmation, and whether delay / the passage of time alone is sufficient to show that an employee has affirmed the contract of employment.

The facts

The claimant, Mr Leaney, was a university lecturer at Loughborough University where he had been employed for 40 years. A complaint was raised against Mr Leaney in his capacity as a warden by a student in relation to his handling of an incident in November 2018. An investigation (which began in January 2019) determined there was no formal case to be answered by Mr Leaney, but expressed concerns about his judgment. Mr Leaney disputed the concerns about his judgment. He raised a formal grievance about this. He was partially successful in that process and consequently appealed the decision in May 2019. Neither a recommended mediation meeting, nor ultimately an appeal hearing was held.

Mr Leaney and the university continued to communicate about the matter until June 2020, when the university confirmed they would no longer be discussing the incident. Following this, Mr Leaney contacted a solicitor and negotiations took place with the university. However, nothing came of those negotiations. Mr Leaney considered the communications in June as being the “last straw” (ultimately arguing that the last straw, together with the earlier actions of the employer, amounted to a material breach of contract by the employer). Subsequently, Mr Leaney resigned on 28 September 2020, and then claimed constructive unfair dismissal.

The ET’s decision

The Employment Tribunal (“ET”) held the contract had been affirmed by Mr Leaney so there was no basis for allowing him to claim constructive unfair dismissal. Focusing on the passage of time, the ET determined that the period between Mr Leaney’s discussions with the university which ended on 29th June 2020, (which he said were the last straw) and his resignation in September 2020 was long enough to affirm the contract. He had delayed too long before resigning and so his claim failed.

The EAT

The EAT disagreed with the ET’s decision. The EAT decided that the ET had got it wrong – the ET placed too much reliance on the passage of time rather than looking at all the circumstances. The ET should have looked at any conduct by the employee during the June-September period “that might or might not have amounted to an express or implied communication of affirmation.”

The EAT also highlighted other factors:

1. The Passage of time: The ET’s decision focused primarily on the length of time that had passed. Given the nature of an employment relationship, a delay in resigning may give rise to implied affirmation, depending on the other circumstances. However, a delay in resigning will not in itself amount to affirmation.
2. The length of service: The EAT considered the importance of Mr Leaney’s length of service. The EAT indicated that it was reasonable that such a long serving employee would take longer to consider their position before departing from a secure job.
3. The period of negotiations: The ET had failed to consider the reasoning behind the delay – that there were negotiations taking place at the time. The EAT highlighted that negotiations may be an attempt for the employee to give the employer the opportunity to ‘put things right’ before resigning. If that is the reason for the delay, it should not be readily assumed that the employee has in fact affirmed the contract and waived the employer’s breach.
4. The timing of the delay was also of relevance in this case. In Mr Leaney’s case, the period of delay coincided with the summer holidays where he had no teaching engagements or significant work, and when work resumed, Mr Leaney went off sick.

Overall, the ET had failed to focus on the employee’s conduct which may have pointed towards the contract having been affirmed, preferring to consider things which hadn’t happened, and giving undue weight to the issue of delay. 

Summary

This case provides clarification on navigating constructive unfair dismissals. The EAT acknowledges the practical intricacies of leaving a job, particularly where an employee has long service and will be reluctant to resign without careful thought, and perhaps without giving the employer a chance to “put things right”.

The EAT emphasised that these cases are highly fact specific, and a delay in resignation alone is not enough to determine that the contract has been affirmed if other relevant factors have not been considered. Employers should be aware of the difficulty in showing that an employee has waived a breach of contract, or affirmed the contract. If an employer is given an opportunity to “put things right”, whether through the grievance process or otherwise, it is sensible to take advantage of that, and not assume that any delay on the employee’s part in resigning, means that a subsequent constructive dismissal claim will fail.

This update contains general information only and does not constitute legal or other professional advice.

Douglas Strang, Senior Associate: dst@bto.co.uk / 0141 221 8012 / Connect with Douglas on LinkedIn

Rebecca McGregor, Trainee Solicitor: rmc@bto.co.uk / 0141 221 8012 / Connect with Rebecca on LinkedIn