Billy BremnerIn the case of Gibbs v Leeds United Football Club Ltd [2016] EWHC 960 (QB) (28 April 2016) the matter in question concerned a contract of employment between the Claimant (Mr Gibbs) and the Respondent (Leeds United FC).

 

The question was whether the Claimant had been constructively dismissed due to a repudiatory breach of his contract of employment by Leeds United, or whether he chose to leave the club without there being any breach of contract.  There was a also a further question in respect of whether the Claimant acted unreasonably in failing to mitigate his losses by rejecting the offer of the role of Head Coach after he had resigned.

By way of background information, the claimant’s contract of employment stated that he must “diligently exercise such powers and perform such duties as may from time to time be assigned to him by the Chief Executive and the Board at which are commonly undertaken and exercised by the managers of Professional football club companies of the Company’s status in relation to the playing, coaching and scouting aspects of the Company’s undertaking (included but not limited to player conditioning and the development of tactical instructions and playing standards generally) and in the discharge of the same he shall:…comply with all reasonable and lawful instructions and requests given:…(B) to the Assistant Manager by the Chairman; (C) to the Assistant Manager by the Company; (D) to the Assistant Manager by the Chief of the Executive…and perform such hours of work as may from time to time reasonably be required of him…”

 

The Claimant was engaged on a fixed term three year contract, however after around eight months of employment the Respondent Company was purchased by a Mr Cellino.  The Respondent thereafter wanted to recruit their own management team, and agreed with the Claimant’s manager to end the manager’s contract early – the Claimant therefore expected that the same thing would happen to him.

 

A new manager was subsequently recruited by the Respondent along with a new assistant manager, however the Claimant was not offered a termination package.  The Claimant did express during a meeting with the owner of the Company that if work was not available for him, he would be happy for his contract to be terminated if a termination package could be agreed.

 

An agreement was not met however and the Claimant subsequently reported to work under the new manager.  Unfortunately they did not get on and the Claimant received an email stating that his role had been changed and he was now required to train the Respondent’s youth players instead of the first team.  The Claimant felt that this instruction constituted a demotion and subsequently resigned.

 

Four months later, strangely, the Claimant was offered the role of manager following the dismissal of his predecessor.  He refused this offer, stating that the treatment he had received by the Respondent had undermined his relationship with his fellow employees.  The Claimant brought a breach of contract constructive dismissal claim against the Respondent.

 

The High Court held that the Respondent’s email changing the Claimant’s role constituted a breach of contract, making the dismissal also a breach of contract.  The Court further held that it was not a breach of contract on the Claimant’s part to initiate a discussion regarding consensual termination – the fact that the Claimant said he would leave if they managed to agree suitable terms was beside the point, he was still ready and willing to fulfil his duties.

 

The High Court also stated that the Claimant rejecting the Respondent’s offer to return four months later did not mean that he had failed to mitigate his losses, rather the Claimant’s new position would have been untenable due to the Respondent’s previous conduct.

 

Employers should therefore note that a change in an employee’s role can amount to a breach of contract enabling an employee to resign and claim constructive dismissal.  In this particular case the role offered was so different to the Claimant’s existing role that it constituted a breach, despite the fact that his salary and other contractual benefits were unchanged.  The lesson to be learnt is that any form of demotion, even if it is only perceived by the employee, can amount to a breach of contract and therefore constructive dismissal.