News Updates

Constructive dismissal

Tuesday 26th August 2014

In Atkinson v Community Gateway Association, the EAT has held that an employee can still claim constructive dismissal notwithstanding their prior breach of contract.

Mr Atkinson resigned pending a disciplinary investigation which initially related to a budgetary overspend, but which was expanded to include allegations of misconduct regarding his use of the Association’s email system.

The ET struck out the unfair constructive dismissal claim, finding that as Mr Atkinson was in prior fundamental breach of contract, he could not rely on his employer’s subsequent breach.

Having reviewed the authorities, the EAT held that the obligation of trust and confidence is not suspended simply because one party has broken that obligation. A contract continues until a fundamental breach is accepted by the innocent party, even though ignorance of the breach may be the reason for not accepting it.

In an unfair dismissal claim, the EAT noted that an employee’s prior breach would be relevant in relation to compensation and may result in a 100% reduction if discovery of the breach would have resulted in a fair dismissal.

All information in this update is intended for general guidance only and is not intended to be comprehensive, or to provide legal advice.