Two cautionary stories: How to avoid constructive dismissal in cases

Recent constructive dismissal cases highlight the importance of employers being vigilant and addressing workplace issues promptly. Nick Hurley and Erin Hughes from Charles Russell Speechlys examine the rulings

The concept of constructive dismissal is a topic that is often discussed but not understood by HR professionals. It continues to be a challenge for business leaders and HR professionals. The concept of constructive dismissal, in which an employee leaves their job due to a fundamental contract breach by the employer, highlights the importance of trust and confidence at work. Recent employment tribunal cases, Mr N Walker V Robsons (Rickmansworth) Limited, and Ms S Hamilton v Epsom & St Helier University Hospitals NHS Trust highlight how seemingly insignificant workplace behaviours may escalate to significant breaches leading to constructive dismissal.

When an employee leaves their job due to the employer’s fundamental breach of contract, it is considered a constructive (unfair). This breach may be an express or implied term, but in most cases it involves a breach of implied trust and confidence.

A breach of contract can be an isolated incident or “the last straw” in a series of events. This term means that the employer cannot act “without reasonable cause” in a way which is likely to damage or destroy the mutual trust between the employer and employee.

While the distinction between an employer’s unreasonable conduct and a breach in trust and confidence is real, it can be a very fine one. The employer must prove that its conduct was so grave that it was a repudiatory violation of the employment contract, that the employee quit due to the breach, and that the employee didn’t affirm the contract prior to resigning.

The employee will be treated both unfairly and constructively if they meet the criteria for unfair dismissal. (Currently, the threshold is two years of continuous service in non-automatic unfair dismissals).

Hamilton’s claimant resigned due to unresolved issues at work and insufficient support. In Walker, the employee resigned due to a demotion. What went wrong?

After resigning as a diabetes nurse specialist, Mrs Hamilton claimed unfair dismissal. She claimed that her employer, an NHS Trust, had not addressed the behavior of a co-worker named Mr Nayeck. She claimed that the Trust did not adequately address her complaint about Mr Nayeck’s behaviour, and had failed to implement necessary safeguards on a timely basis.

Formal grievance

Mr Nayeck was rude to Mrs Hamilton in several ways: he ignored her morning greetings, he turned away from her at meetings and ceased making tea for Mrs Hamilton while continuing to make it for the other members of her team (thereby excluding Mrs Hamilton). Mrs Hamilton filed a formal complaint about Mr Nayeck and the Trust’s response to it. She also appealed against the initial result of her grievance.

Two sets of recommendations were made in the appeal result. The tribunal determined that the Trust had failed to adequately address Mr Nayeck’s behaviour, and also did not implement the grievance appel recommendations in a timely fashion. Both of these actions constituted a violation of the implied term trust and confidence. The tribunal found that the Trust’s behaviour was likely to destroy, or seriously damage, the relationship of trust. She resigned as a result of the breach. Her claim of constructive unfair termination was upheld. She received compensation of PS41,000.

Separately Mr Walker accused his employer of age discrimination and constructive unfair dismissal. Mr Walker was informed that he will be moving to a different branch as the company had hired someone in Rickmansworth, his current branch. Later, his replacement left and Mr Walker returned to Rickmansworth. The management decided that Mr Walker would be sharing the branch manager role, but did not inform him of this.

Telling you to sit in the middle of the desk

The branch manager used to sit at the back of the desk. This had both a “symbolic”, as well as a practical, meaning. Mr Walker was asked to sit in the middle of the desk which felt like a downgrade. Mr Young also yelled at Mr Walker, making an age-related comment and threatening disciplinary actions regarding the desk issue.

The tribunal found Mr Walker constructively dismissed because the agency had breached the implied term of confidence. This breach was caused in part by a number of actions including the change to Mr Walker’s working conditions and role without adequate communication, and his being instructed to sit at the middle table upon returning to the branch.

The tribunal found that Mr Walker had resigned as a result of this violation. The tribunal dismissed the direct age discrimination claim because it did not find that the treatment was less favorable based on his age. However, the tribunal found in favor of him for the constructive unfair dismissal. To determine compensation, a separate hearing on remedy will be scheduled.

These cases highlight the importance of maintaining confidence and trust in employment relationships. Employers need to be aware of workplace relationship issues and:

• Act quickly and effectively to resolve grievances, and make sure that appropriate support mechanisms for the affected are in place.
• Poor workplace behavior should be addressed with clear policies, training and disciplinary measures.
• To maintain trust, ensure that employees are treated with respect and communicate openly.

These cautionary stories, although rare, provide valuable insight for HR professionals and businesses into the risk of constructive dismissal lawsuits. These cases highlight the importance of employers safeguarding employment relationships by dealing with grievances quickly and effectively.

Both emphasize the need for employers to be vigilant in identifying workplace behaviors that can undermine trust and confidence and to implement policies and training designed to prevent these situations. Prioritising these factors can help employers reduce the risk of constructive dismissal (unfair dismissal) claims, and create a productive and harmonious workplace.

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