Constructive dismissal: Employee who had previously fundamentally breached his employment contract could bring a constructive dismissal claim - DAC Beachcroft

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Constructive dismissal: Employee who had previously fundamentally breached his employment contract could bring a constructive dismissal claim

Published On: 2 September 2014

Facts

Mr Atkinson was the Director of Resources at a housing association (the Association). Among other things he had written the Association's email policy. In late 2010, after the Association discovered an overspend of £1.8 million, Mr Atkinson was suspended pending disciplinary proceedings.

During its investigations, the Association discovered that Mr Atkinson had been in a relationship with a female employee at another housing association, to whom he had sent sexually explicit emails which had not been marked private or personal. He had also referred to the Association's business and encouraged her to apply for a job. He assisted her in her application, told her what to expect at interview and how to make her presentation, and he tried to influence the appointment process. Mr Atkinson did not disclose his personal relationship with her. These issues were added to the disciplinary proceedings. A disciplinary hearing was fixed for 9 March 2011. Following disagreements about procedure and postponements, Mr Atkinson resigned with immediate effect on 14 March 2011, before the hearing had finished. He brought tribunal claims including a claim for constructive unfair dismissal. He also argued, in response to the Association's defence, that his Article 8 European Convention right to respect for his private and family life had been breached when the Association went through his emails.

At the tribunal hearing, after Mr Atkinson had finished his evidence, the Association successfully applied to strike out his constructive dismissal claim. The tribunal found that the constructive dismissal claim had no reasonable prospect of success because Mr Atkinson was himself in repudiatory breach of contract. They also found that the Association had not breached Mr Atkinson's Article 8 right to respect for his private and family life when they accessed his emails. Mr Atkinson appealed.

The EAT overturned the tribunal's decision in relation to the constructive dismissal claim, finding that Mr Atkinson was not barred by his prior breaches of contract from bringing a constructive dismissal claim. The correct analysis was that a contract of employment is not suspended or put in abeyance because one party has committed a fundamental or repudiatory breach. The contract of employment only comes to an end when one party accepts that breach. If they do not accept the breach, whether because they do not know about it or otherwise, the contract continues. However, if the party who was originally at fault was an employee who subsequently brought a successful constructive dismissal claim, the tribunal would inevitably be required to consider reducing compensation. That reduction could be up to 100% if it was established that the employee would have been fairly dismissed, had the employer known about the employee's original breach. While its reasoning was different from the tribunal's, the EAT also held that there had not been an unjustified interference with Mr Atkinson's private life. Indeed, the tribunal had been entitled to take the wording of the Association's email policy and the fact that Mr Atkinson had written it into account. He could not have expected emails, which were not marked personal or private, to be overlooked by the Association in its investigation: Mr Atkinson had no expectation of privacy in relation to the relevant emails.

What this means for employers

From a practical point of view this decision is a useful reminder of the value of clear email policies and procedures which make employees aware of the limits of using the employer's email system, how such use will be monitored and the disciplinary sanctions which may ensue if the policy is breached. While employers may have preferred the outcome of this case to be that an employee who has committed repudiatory breaches of contract cannot bring a constructive dismissal claim, the law in this area is clear.

Atkinson v Community Gateway Association

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