Constructive dismissal

Photo by Alex Radelich on Unsplash

Two days on the trot and I find myself discussing dismissal in connection with former employees of the UK Government. Yesterday, I addressed the case of Sonia Khan, a former Special Adviser to two Chancellors of the Exchequer, who has a very strong case for unfair dismissal.

I now want to turn to the another prominent case of dismissal with which the UK Government has had to face recently. Last month, Sir Philip Rutnam who had been the Permanent Secretary at the UK Home Office (the Ministry of the Interior) took legal action against his former employer. The Permanent Secretary is the top civil service post in a Government Department and the post-holder would work very closely with the Secretary of State and her ministerial team.

The background to Sir Philip’s legal action against the Government is pretty sensational. He alleges that he was forced to resign from his post due to the unreasonable actions of his boss, Priti Patel MP, the Home Secretary. He is alleging that Ms Patel behaved in a bullying manner towards him and other civil servants in her Department. In short order, Sir Philip is claiming that he was constructively dismissed.

A link to the story as reported in The Guardian about Sir Philip’s legal action can be found below:

https://www.theguardian.com/politics/2020/mar/03/top-civil-servant-begins-legal-case-against-priti-patel-and-home-office

Constructive dismissal is usually described as an employee jumping ship before s/he can be pushed over the side by the employer. It is a resignation, but it is not treated as such if the employee has good grounds for terminating the contract of employment.

In terms of Section 95(1)(c) of the Employment Rights Act 1996, constructive dismissal is defined in the following terms:

‘the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer’s conduct.’

The key phrase here is ‘by reason of the employer’s conduct’ and this is the reason why the employee has chosen to end the employment relationship.

The employee’s right to claim constructive dismissal arises in situations where the employer’s conduct is to be regarded as a material breach of the employment contract and the employee is left with no alternative but to resign. Normally, a resignation would not be regarded as a dismissal: if an employee resigned in a fit of pique s/he would not be entitled to claim State benefits (Universal Credit).

The employer’s conduct must be so serious in order to justify the employee’s decision to resign. When an employee claims that he has been constructively dismissed, he is claiming that he was unfairly dismissed. The right of constructive dismissal would arise in situations where the employer made unauthorised deductions from wages; subjected to bullying and harassment; where the employer refused to follow the proper disciplinary or grievance procedures; or where the employee was ordered to use equipment that was clearly dangerous or sub-standard.

In the well known case of Sharp v Western Excavating Ltd [1978] All ER 713, [1978] ICR 221, Lord Denning laid down the essential conditions for constructive dismissal:

An employee is entitled to treat himself as constructively dismissed if the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer’s conduct. He is then constructively dismissed. The employee is then entitled in those circumstances to leave at that instant without giving any notice at all or, alternatively, he may give notice and say that he is leaving at the end of the notice. But the conduct in either case must be sufficiently serious to entitle him to leave at once. …. the employee must make up his mind soon after the conduct of which he complains. If he continues for any length of time without leaving, he will be treated as having elected to affirm the contract and he will lose his right to treat himself as discharged.”

In Wishaw & District Housing Association v Moncrieff [2009] UKEAT0066/08, the Employment Appeal Tribunal in Scotland provided helpful guidelines for Employment Tribunals when dealing with claims for constructive dismissal.

According to Lady Smith, the President of the Employment Appeal Tribunal, an Employment Tribunal dealing with unfair constructive dismissal must have regard to the following issues:

1. The specific incident which led the employee to resign from employment (the so called last straw) must be pinpointed;

2. Once this incident has been pinpointed, the Tribunal must carry out an objective assessment to judge whether it can contribute to a chain of events which taken together convey the overall impression that the employer has breached its implied duty of trust and confidence; and

3. If the incident has the potential to be viewed as breach of the duty of trust and confidence does it in fact constitute the last straw in a chain of events which would permit the affected employee to treat himself as constructively dismissed?

Conclusion

In constructive dismissal claims, the employee is alleging that the employer’s behaviour has effectively destroyed the employment contract by committing a material breach. However, employees must be careful: the employer’s conduct must be so serious that it allows the employee to treat herself as dismissed.

Employees should take proper legal advice before taking such a step. It could be disastrous if they get it wrong. Get it right and employees can claim unfair dismissal. Stella English, 2010 winner of the BBC’s “The Apprentice” television programme knows all about getting it wrong. Ms English resigned from employment with Lord Sugar and claimed constructive dismissal. Her action failed (see Stella English v Amshold Group Ltd Case No 3200079/12).

In Nationwide Building Society v Niblett [2009] UKEAT/0524/08, was very clear that merely because an employer has behaved unreasonably towards an employee does not necessarily provide grounds for claiming constructive, unfair dismissal:

It is not the law that an employee can resign without notice merely because an employer has behaved unreasonably in some respect. In the context of the implied term of trust and confidence, the employer’s conduct must be without proper and reasonable cause and must be calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee“.

Related Blog Article:

https://seancrossansscotslaw.com/2020/04/08/undignified-exit/

Copyright Seán J Crossan, 9 April 2020

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sjcrossan1

A legal blog by the author of Introductory Scots Law: Theory & Practice (3rd Edition: 2017; Hodder Gibson) Sean J. Crossan BA (Hons), LLB (Hons), MSc, TQFE I have been teaching law in Higher and Further Education for nearly 25 years. I also worked as an employment law consultant in a Glasgow law firm for over a decade. I am also a trade union representative and continue to make full use of my legal background. I am a graduate and postgraduate of the Universities of Dundee, London and Strathclyde. Please note that this Blog provides a general commentary about issues in Scots Law. It is not intended as a substitute for in-depth legal advice. If you have a specific legal problem, you should always consult a suitably qualified Scottish solicitor who will be able to provide you with the support that you require.

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