In Buckland v Bournemouth University, the Court of Appeal has clarified the law concerning the position of an employer who has committed a repudiatory breach of contract which has, in turn, led to an employee resigning from his or her post and claiming constructive dismissal.
The case concerned a university professor whose position had been undermined by his employer arranging for someone else to check his work, without his consent. As soon as it realised its mistake, the employer ordered an inquiry into how this had happened which entirely vindicated the employee. However, the employee had already given notice of his intention to resign and claim constructive dismissal.
The two issues before the EAT were –
- how far is an employer in such a case allowed to suggest that its action was 'within the range of reasonable responses' as it would do in an 'ordinary' unfair dismissal case; and
- whether an employer's repudiatory breach can be 'cured' (as in this case, by the establishment of the inquiry) so that the employee would not then be justified in resigning and claiming constructive dismissal.
The EAT found against the employer on both points. If the employer's action amounted to a repudiatory breach, it was not necessary for a tribunal to enquire any further at this stage whether the employer's action was within the range of reasonable responses. Furthermore, once such a breach had been committed, it could not be undone by the party in breach. From that point, it was entirely in the hands of the wronged party (the employee) to decide whether to continue with ('affirm') the contract or not. In this case, the employee was entitled to claim constructive dismissal. The Court of Appeal used the example of an employer which fails to pay wages but only because a major customer has defaulted on a payment. The non-payment of wages would still be a repudiatory breach and the employee would still be entitled to claim constructive dismissal, even if the employer became able to pay the wages a short time later.
Point to note –
- Even though this decision may seem harsh on employers, it is welcome to have some clarity on these issues. Further, an employer in breach may still be well advised to seek to remedy it since this will make it less likely that the wronged employee will want to resign and, if he or she still proceeds to do so and make a claim, their compensation may well be adversely affected.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.