In our experience, constructive dismissal is one of the most misunderstood areas of employment law. There is often confusion about what amounts to a dismissal or resignation and what it takes for an employee to be able to bring a claim. In particular, the recent case of Wright v North Ayrshire Council (2013) examined what happens where an employee has more than one reason for resigning, and whether this can mean that constructive dismissal does not apply.
The principles of constructive dismissal were first set out in the landmark case of Western Excavating v Sharp (1978), and in brief, these are:
1) Has there been a breach of contract by the employer?
2) Was the breach fundamental (i.e. did it go to the root of the contract)?
3) Did the employee resign in response to the breach?
In Wright v North Ayrshire Council, Ms Wright worked at a care home for 6 years. In 2010 she resigned and argued that she had been constructively dismissed.
The background to her resignation was that she had raised several grievances during her employment, none of which had been properly dealt with. However, she had also been experiencing difficulties in her personal life, with her mother being seriously ill and eventually dying, shortly after which the Claimant’s partner had a serious stroke. As Ms Wright’s role involved working shifts, it proved difficult for her to juggle her work and her caring responsibilities.
At the Employment Tribunal, the Tribunal said that the employer’s behaviour did amount to a fundamental breach, but they considered what the ‘main’ or ‘effective’ cause of the resignation was, and decided that the Claimant had not satisfied question 3 of the Western Excavating test. Therefore she could not pursue a constructive dismissal claim because they felt the real reason for her leaving was to fulfil her caring responsibilities.
However, Ms Wright appealed this decision, and at the Employment Appeal Tribunal (EAT) the decision was overturned, as the Tribunal was found to have made an error of law. The EAT said that the correct approach where there might be more than one reason for an employee’s resignation is to look at whether any of those reasons is a response to the breach, not to look at which of those reasons is the main one.
The case was therefore sent back to the Employment Tribunal to consider Ms Wright’s constructive dismissal claim. The EAT did say however that the question of whether Ms Wright would have remained with the employer (bearing in mind the other factors) would potentially be relevant to the issue of compensation.
There are other situations where this decision could be relevant. For example, we often come across situations where an employee resigns and claims constructive dismissal, but they tender their resignation at a certain time because they have found a new job. Employers need to be wary, as they cannot assume that employees with other reasons for leaving will not pursue a constructive dismissal claim.
We are experienced at advising on potential constructive dismissal situations, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).