As you may be aware constructive dismissal occurs when an employee terminates their employment in response to their employee’s treatment of them. The employee has to show that they have resigned in response to fundamental breach of contract by the employer. The Employment Rights Act essentially say that if the employee terminates their contract in circumstances which they are entitled to do so without notice because of the employer’s conduct that termination constitutes a dismissal.
In the case of Gibbs v Leeds United FC the Court was required to determine liability for breach of contract, considering whether Leeds United FC was in breach of its contract with the Claimant, whether that breach was repudiatory and whether, when the Claimant resigned, he did so at least in partly as a result of that breach.
The Claimant (here photographed when at Tottenham) had worked as an assistant manager at Leeds United Football Club. When the head coach was dismissed it was expected that, as is usually the case, the Claimant would also be dismissed despite working under the terms of a fixed term contract which was due to expire in June 2016.
Following the departure of the head coach the claimant did enter into discussions concerning the early termination of his employment however the Chairman made clear that he wanted him to remain at the club. The Claimant returned to work as requested although discussions continued with the club in an attempt to negotiate the early termination of his contract. During this period the Claimant was not assigned work which fell within his contract to do, although he turned up ready and willing to do it. He complained and said that he had been left with nothing to do and expressed that he was unhappy about this situation. However subsequently on the 23 June he received an email from the club secretary, Graham Bean, which read as follows:
…further to our earlier conversation I am instructed to write to advise you as follows: (i) with immediate effect you are to have no contact and/or involvement with the LUFC First Team and your role at the Club should be confined to working with the Under 21s, Under 18s and other non-first team players
The Claimant resigned on the basis that the club had breached his contract and thereafter issued a claim for constructive dismissal. The Respondent sought to defend the claim and much of the cross-examination of Mr Gibbs was designed to show that he had intended to leave the service of Leeds following the departure of the head coach. The veiled suggestion was that he had hung onto the job as a negotiating tactic. However, sitting in the High Court, Mr Justice Langstaff sympathised with the Claimant and after looking at all of the circumstances found that despite exit discussions taking place, this did not excuse or mitigate from the conduct of the club by acting in breach of contract.
In assessing quantum the Respondent argued that the Claimant had failed to mitigate his loss in failing to accept the role of head coach following his resignation. However, Mr. Justice Langstaff rejected this argument and agreed that the Claimant’s position was untenable.
This case serves to demonstrate the importance of continuing to honour an employee’s contract regardless of any other discussions which may be taking place and that failure to do so has the potential to result in extremely costly Employment Tribunal litigation.