Engaging in grievance process does not prevent an employee claiming constructive dismissal

The general mechanics of a constructive dismissal claim are that there is a fundamental breach of contract by the employer, and that the employer accepts that breach of contract and resigns because of it.

A constructive dismissal claim cannot succeed where the employee waives the breach and “affirms” the contract. For example, if an employee is due to be paid their salary on Monday but the employer fails to do so, that is likely to be a fundamental breach of contract and the employee could resign in response to that breach. However, if the employee affirms the contract by remaining in employment, and then gets paid on Wednesday, they are unlikely to be able to then resign the following week claiming constructive dismissal. They had the choice to accept the breach and resign, but chose not do so and by the time that they did resign, they will likely be deemed to have affirmed the contract.

In Brooks v Leisure Employment Services Ltd the EAT considered this issue of affirmation in the context of a grievance. The Claimant worked as a resort holiday sales adviser at Butlins. As resorts were closed due to the pandemic lockdown, the conferencing and events Team Leader was asked to put together a list of 20 people who could work from home to deal with customer issues. The Claimant was contacted and asked to be part of this group, joining a WhatsApp group for these purposes. The Claimant was concerned about what pay she would receive (as most of her remuneration had been commission-based, but there would now be no commission as the holiday resorts were closed). She raised these concerns over email, received no response and was removed from the WhatsApp group. She was later told that she had been removed because there were more candidates than could be recruited, but that was not in fact true. She raised a grievance on 15 April 2020 alleging discrimination and breach of the implied term of trust and confidence. She resigned on 25 June 2020 and her grievance was dismissed on 10 August 2020.

The Tribunal at first instance found that the employer had breached the contract by removing her from the Whats App group in March 2020, but that because she had continued in employment and continued to be paid until resigning on 25 June 2020, she had by that stage waived the breach and affirmed the contract. Her claim for constructive dismissal therefore failed. 

The EAT reversed this decision. They referred to established contractual law which provides that “mere delay by itself (unaccompanied by any express or implied affirmation of the contract) does not constitute affirmation of the contract; but if it is prolonged it may be evidence of implied affirmation.” 

The EAT confirmed that the exercise of a grievance or appeal procedure in an attempt to give an employer an opportunity to resolve issues is not likely to be treated as a clear affirmation of the contract. 

The EAT found that the Tribunal has also not considered that on 5 May 2020, the Claimant had written in an email exchange “I reserve all my rights” and had not taken into account that the grievance remained unresolved when she resigned. The claim was therefore remitted to the Tribunal for it to reconsider its decision. Whilst in this case, the employee's conduct did not necessarily waive the employer's breach and affirm the contract, when employers are facing constructive dismissal claims, it is wise to consider whether there might be an argument that the contract has been affirmed

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If you have any queries you would like to discuss regarding constructive dismissal please contact Rena Magdani or Matt McBride.