Claire Merritt | 3rd November 2020

Can a failure to return to work constitute resignation in a constructive dismissal claim?

SHARE

Claire Merritt | 3rd November 2020

Can a failure to return to work constitute resignation in a constructive dismissal claim?


Introduction to constructive dismissal

Constructive dismissal claims are notoriously hard to successfully claim as the burden lies with the employee to prove that they were entitled to resign from their role following a repudiatory (fundamental) breach of contract by their employer. In other words, an employee is entitled to resign and treat themselves as being dismissed by virtue of their employer’s conduct.

The main avenue for employees to pursue and illustrate a breach by an employer, is through a breach of the implied term of mutual trust and confidence. Some broad examples of such situations include an employer: unilaterally changing an employee’s salary; changing the duties of an employee, subjecting the employee to discrimination or creating an intolerable working environment for the employee e.g. consistent bullying.

An employee is required to communicate their acceptance of their employer’s repudiatory breach and treat themselves as dismissed. Ordinarily, this is done through the act of resignation but a recent case has developed the stance of communicating such acceptance.

Case update – Constructive dismissal claim

In Chemcem Scotland Ltd v Ure, the EAT has held that an employee’s failure to return to work following maternity leave was sufficient to communicate her acceptance of her employer’s repudiatory breach of contract for the purpose of claiming constructive dismissal. In this case update, I discuss how the EAT ultimately arrived at this conclusion.

Background Facts

Mrs Ure (U) had been employed by her father’s company BRE Ltd (BRE). BRE had encountered some financial difficulties and was on the verge of insolvency before its employees, including U, were transferred to Chemcem Scotland Ltd (CS) of which, U’s father was a majority shareholder.

U had started her maternity leave and was having ongoing discussions with her father about her employment with CS. During this time, U’s father was going through divorce proceedings with U’s mother, and had also began a relationship with another member of CS’s staff. Due to these ongoing circumstances, the relationship between the two was deteriorating. As a result, U’s father failed to adequately inform and, in some cases, misled U in relation to information regarding her employment with CS which, as an employee of CS, she was entitled to be informed about.

At the end of her maternity leave U did not return to work for CS and instead claimed she had been constructively dismissed, relying on her father’s treatment during her maternity leave to establish CS had breached the implied duty of trust and confidence in her contract of employment.

Employment Tribunal (ET)

An ET agreed with U, citing various acts during her maternity leave that contributed to a breach of the implied duty of trust of confidence which constituted a repudiatory breach of U’s contract. These events included the following:

  • CS putting U onto BRE’s payroll when it was on the verge of insolvency;
  • CS’s failure to pay statutory maternity pay on time without explanation; and
  • CS’s failure to answer U’s queries about her entitlements.

The Tribunal ruled that these acts indicated that her father was hostile to the idea that U’s employment would be continuing and this could be evidenced over a significant period of time, as such, this entitled U to treat herself as dismissed and claim constructive dismissal.

CS appealed the decision, citing that U had not actively communicated her acceptance of the breach to CS and therefore there had not been a termination of U’s contract.

Employment Appeals Tribunal (EAT)

The EAT dismissed CS’s appeal, given the facts and circumstances of the case, it was clear that U’s failure to return to work was sufficient to constitute an implied acceptance to CS’s repudiatory breach. The EAT also highlighted that it was a matter of fact for the Tribunal to decide whether U’s failure to attend work could be seen as an acceptance to the breach.

Consequences of the decision

At first glance, the decision can be seen as a relatively major development in the law of constructive dismissal – employees have the possibility of bringing a claim even where they have not actively resigned from their role, they have simply not returned to work following an employer’s conduct which can be seen as an implied acceptance of an employer’s breach.

However, most commentators are likely to agree that the facts of the present case were unique in nature and, therefore, any future claims of constructive dismissal are still likely to require a resignation to communicate their acceptance of an employer’s breach – although this case still represents an interesting development of the law. As with the majority of constructive dismissal claims, the particular facts in question will be crucial in determining the likelihood of success.

If you have any questions or would like any assistance in respect of a constructive dismissal issue please get in touch with a member of the Employment team.

This blog was co-authored by Fred Chandler, Trainee Solicitor and Claire Merritt, Partner.