Case study: Grievance and constructive dismissal

OVERVIEW

The Employment Appeal Tribunal (EAT) considered whether an employee, Mr G, undermined his claim for constructive dismissal by engaging in his company’s grievance procedure. It had been argued that Mr G’s decision to invoke the grievance process effectively affirmed his contract, meaning he lost the right to claim constructive dismissal.

The EAT concluded that, as long as an employee does not unduly delay using the grievance process, they can resign and make a claim for constructive dismissal in relation to the breach which prompted their grievance.

BACKGROUND

Mr G worked as a commercial manager for 10 years. The working relationship between him and his manager became progressively worse, prompting Mr G to resign. He claimed unfair constructive dismissal on the grounds that his employer breached the implied obligation of trust and confidence.

In law, an employee with more than two years’ service can raise a claim for constructive dismissal if their resignation is the result of a repudiatory breach by the employer. Where an employee does not resign immediately, employers can argue that the employee has acted in a way that affirms the contract. This may be attributed to a delay in the employee resigning and/or because they are said to have acted in a way that suggests they are treating the contract as continuing. In this case,

Mr G argued that his employer breached the implied term of trust and confidence due to the deterioration in the relationship with his line manager. Mr G raised a grievance about the issue before resigning.

OUTCOME

Original ruling

The original tribunal dismissed Mr G’s claim. While it acknowledged the company had behaved badly, it did not feel that the implied term of trust and confidence had been breached. Not all the causes of breakdown alleged by Mr G were the fault of the company, and Mr G was, to some degree, a contributor to that breakdown.

The tribunal also found that, even if there had been a fundamental breach that prompted Mr G to resign, a claim for constructive dismissal could not succeed. By raising a grievance, it found, the employee had affirmed the contract. The tribunal's position was that the claimant could not, on the one hand, claim the contract is at an end while simultaneously relying on a grievance procedure that presupposed the contract's existence.

Appeal

Mr G appealed to the EAT, which agreed with the original tribunal’s decision that there had not been a fundamental breach of contract.

However, the EAT disagreed with the tribunal’s ruling that, by following the internal grievance procedure, Mr G had affirmed the contract. Referring to previous case law, the EAT felt that an employee exercising one contractual right (e.g. using the grievance process) did not mean that he had accepted all other contractual rights.

In addition, a grievance process can be (and usually is) separate from the actual contract and is therefore able to exist on its own, even though the remainder of the contract is regarded as breached.

KEY POINTS

• As long as an employee does not unduly delay using the grievance process, they can resign and make a claim for constructive dismissal in relation to the breach which prompted their grievance.
• It remains unclear how long an employee is permitted to delay resigning – even if a grievance procedure is ongoing – without being seen to have affirmed the contract.
• The purpose of grievance and appeal procedures is to allow employees and employers to try to resolve any issues internally. If an employee’s decision to engage with the grievance process was treated as affirming the contract, that would effectively remove that pathway for resolving issues internally in the first instance.
• Practices should ensure that any grievance raised is dealt with in a timely manner and given the full attention required.

FURTHER INFORMATION

• Access the MDDUS factsheet on dealing with a grievance by logging in to your MDDUS account and clicking on “employment law resources”.
• Contact the employment law team for more specific advice on advice@mddus.com