Constructive dismissal - cure all ills?

27/05/2010

By Nick Hobden, Partner and Head of Employment.

No doubt readers of this article will be familiar with the concept of constructive dismissal.  Where an employer has fundamentally breached an employee's contract of employment and the employee resigns in response, that resignation can in effect be regarded as a dismissal in law. In most cases, that dismissal will be unfair.

Over recent years, the reported cases on unfair constructive dismissal have frequently related to circumstances in which the employer is alleged to have breached what employment lawyers call the 'implied term of mutual trust and confidence'. The precise ambit of this term is rather vague. But in broad terms, employers are required to avoid acting in a manner that is calculated or likely to destroy of seriously damage the relationship of trust and confidence that must exist between employer and employee.

The facts

In the case of Buckland v Bournemouth University, Professor Buckland worked in the University's Archaeology Department. As part of his duties, he was responsible for the marking of students' exam papers. When 18 students failed an exam at the first attempt, he was also responsible for marking the re-sits. But his Head of Department was concerned at the high number of students who had failed. So without Prof Buckland's knowledge, the Head of Department arranged for the test papers to be remarked. When Prof Buckland found out what had happened, he formally complained to the University about what he saw as a serious assault on his integrity. Although a subsequent investigation cleared him of any wrongdoing and criticised the conduct of the Head of Department, Prof Buckland resigned and claimed that he had been (unfairly) constructively dismissed.

The legal issues

The Employment Tribunal (ET) found in Prof Buckland's favour, but the University appealed to the Employment Appeal Tribunal and the matter then found its way to the Court of Appeal (CA).  One of the issues placed before the CA was the question of whether the alleged breach of contract could be "cured" by the actions taken by the University to investigate Prof Buckland's complaint before he tendered his resignation?

The CA concluded that it was not possible for a fundamental breach of contract to be "cured" by the subsequent actions of the employer, even if such steps were taken before an employee had resigned. It said that to conclude otherwise would significantly change general contract law or would require the creation of a specific exception for employment contracts, neither of which was desirable.

What does this mean?

In some respects, this decision is rather discouraging. It effectively means that any attempt by an employer to make up for any previously committed fundamental breach of contract is potentially entirely useless. However the lesson to be learned is that the stakes are very high in such situations. Once committed to a course of action, it may be impossible for an employer to pull back, no matter how hard it tries. 

If you are worried that you might be about to act in haste, only to repent at leisure, why not contact a member of the Employment Team and bounce the issue around?