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Tit for Tat: can an employee who has committed gross misconduct sue their employer for constructive dismissal?

Yes, says the Employment Appeal Tribunal, as long as the contract of employment is still ongoing. Even if an employee has committed gross misconduct, the employer remains bound by the implied duty to maintain mutual trust and confidence until the contract comes to an end. The fact that an employee has committed gross misconduct does not prevent him from claiming constructive unfair dismissal in connection with events which occurred after his misconduct.

Background

The claimant was a director of a Housing Association. For a period of time he had used his work email to contact his lover at another Housing Association. His emails were overtly sexual and also disclosed details of the respondent's business. He also assisted her in applying for a job by telling her the interview questions in advance and advising a colleague that she should be offered the job.

These emails were discovered during a disciplinary investigation into a £1.8 million overspend. During the course of the Association's investigations into both the overspend and the offending emails, the claimant submitted his resignation with immediate effect.

The claimant then made a claim for, amongst other things, constructive unfair dismissal complaining that the disciplinary proceedings had been conducted in such a way as to amount to a fundamental breach of the implied term of trust and confidence.

Employment Tribunal (ET) decision

The ET struck out the claimant's constructive dismissal claim. It said that that one party to a contract of employment cannot claim breach of contract by the other if he is himself has already fundamentally breached the contract.

Employment Appeal Tribunal (EAT) decision

The EAT found that the tribunal had erred in law. It held that, as long as the employment contract continues, both parties remain bound by their obligations. Some obligations may be suspended in particular circumstances (such as to pay an employee if they are on strike). However the fundamental obligation of trust and confidence is not suspended just because one party has broken that obligation.  

Comment

It is important for employers to remember that, even if an employee has fundamentally breached their contract of employment, whilst the employment relationship continues, contractual obligations (such as the implied term of trust and confidence) remain in place. If the employer himself subsequently breaches the contract, the employee is not barred from bringing a constructive dismissal claim.

In practice, even where an employer is found to have been in breach, a tribunal would be entitled to reduce compensation by up to 100% if it found that the employee was himself guilty of a prior fundamental breach of contract. Nevertheless, employers will not generally want to find themselves in a position where they have thrown away the moral and legal high ground by committing a serious breach of contract of their own (in their conduct of disciplinary proceedings, for example).

Click here for more details on the case: Atkinson v Community Gateway Association, EAT

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at October 2014. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.

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