The case of Aberdeen City Council v McNeill (http://tinyurl.com/yc5q9eal) has recently been heard by the Employment Appeal Tribunal. It provides a useful reminder about who must be in breach of the contract of employment before an employee can pursue a claim for constructive dismissal.

The facts were these:

Mr McNeill was a long standing employee of the Council. He became embroiled in disciplinary proceedings when his line manager was suspended pending investigation of alleged misconduct of a financial nature.  The Claimant believed he had heard his line manager and a female employee, on two occasions, engaging in sexual activity together.  It appears he was rather indiscreet in keeping this information to himself and was himself suspended for breaching confidentiality, as well as making defamatory remarks about a female colleague.  That same female colleague alleged harassment, sexual harassment and bullying against Mr McNeill.

The Council then started an investigation against Mr McNeill in respect of four other disciplinary matters, including being under the influence of drink on many occasions when in the workplace, failing to act in the best interests of the Council, bullying harassing and sexually harassing female members of staff, and being uncooperative with other departments and colleagues.  Mr McNeill then became unwell and the disciplinary proceedings became protracted and difficult.  Mr McNeill attacked the probity of the investigation.  Eventually, ten months after being suspended, Mr McNeill wrote to the Council tendering his resignation, and stating "I have no trust in the Council as my employer" and various other related matters about the way they had conducted the investigation, which he said was oppressive.

The issue then arose over whether Mr McNeill could pursue a claim for constructive dismissal against the council.   What was the status of Mr McNeill's behaviour compared with that of the employer?  The Employment Tribunal took a very relaxed view of the allegations of sexual harassment made against the Claimant, dismissing it as "banter" and down-playing the influence of his drinking during office hours.  The Employment Appeal Tribunal took a very dim view of that – "Again the Tribunal gave the impression that they are seeking to minimise the Claimant's conduct".   The EAT took the view that both were parties to a contract and thus mutually obliged to perform their obligations, with Lady Smith (at para 87) saying;

"If a party to such a contract is in material breach of one of his obligations he cannot insist that the other party perform a reciprocal term"

This isn't new law – the same principle was set out in the 2008 case of RDF v Clements all the way back to Thorneloe v McDonald & Co in 1892.  This case is a useful restatement of the various authorities and noteworthy for its trenchant criticism of the Employment Tribunal that heard the case in the first instance.   The EAT held that Mr McNeill had acted improperly and in breach of the implied term of trust and confidence.  Therefore he could not claim constructive dismissal and lost his claim.

Is this good news for employers? On the face of it yes, because it means that an employer faced with a claim by one of its employees that it had repudiated a term of terms of the contract can defeat such a claim if it can show that the employee was in prior breach of the term.  However, there is a risk for employers because the success or failure of this approach will depend upon whether the employer already knew of the employee's prior breach.  If the employer did have knowledge and did not act on it then it may be held to have "affirmed" the breach, in other words to have accepted the breach and chosen to do nothing about it. In the McNeill case the EAT specifically stated that the Council did not have knowledge of the breaches by the Claimant –they only came to light during the Claimant's suspension.  If it had the final outcome may have been very different.

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