Fri 29 Dec 2023

Raising contractual grievance does not prevent constructive dismissal claim

The Employment Appeal Tribunal (“EAT”) found that a three-month period between employer's breach of contract and employee's resignation did not affirm contract.

In Ms Sandra Brooks v Leisure Employment Services Ltd the claimant raised concerns with her employer regarding her pay during the Covid-19 lockdown.  Most of her pay was commission, but with the holiday resorts closed she would not receive any.  Her employer did not respond, but she was removed, without explanation from a WhatsApp group that had been set up to include people who would be working from home.  She raised a grievance on 15 April 2020 but did not resign until 25 June 2020.  She had however sent an email on 5 May 2020 saying, "I reserve all my rights".  Her grievance was dismissed on 10 August 2020.

When she claimed constructive dismissal an employment tribunal found that the employer's action in removing her from the WhatsApp group was a breach of contract.  However, the tribunal also found that by continuing in employment until 25 June she had waived the breach (affirmed the contract).  Her constructive dismissal claim therefore failed. 

However, the EAT disagreed.  Citing established contract law that delay in itself does not constitute affirmation of the contract, albeit if it is prolonged it may be evidence of implied affirmation, the EAT upheld the appeal.  The exercise of a grievance (or appeal) procedure, according to the EAT, that is an attempt to give the employer an opportunity to resolve the issues, is unlikely to be treated as an affirmation of the contract.  The EAT further found that the employment tribunal had failed to consider both the claimant's reservation of her rights in the email of 5 May, and the fact that the grievance was unresolved at the time she resigned.  The case was sent back to the employment tribunal for it to reconsider its decision in light of the EAT's judgment.

This case is helpful confirmation that invoking a contractual grievance procedure and remaining in employment for a period after a breach of contract has occurred, will not inevitably be seen as affirmation of contract (waiving the breach).  As such, an employee may still proceed with a constructive dismissal claim.  However, cases of this type do turn on their own individual circumstances and the longer the period of time that the employee remains in employment after the breach, the more likely it is to be found that the contract has been affirmed.  In particular, if the employee had remained in employment for a period of time after her grievance had been determined, rather than resigning beforehand, the outcome would very likely have been different.

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