Dickins (t/a Chris Dickins Solicitors) v. Virdee

Constructive dismissal requires a significant breach of contract going to its root, resignation in response to that breach, and timely acceptance of it. The implied term of trust and confidence is assessed objectively by reference to the employer’s conduct and its impact on the employment relationship, rather than the employer’s intention. A legitimate dispute about contractual meaning does not prevent other conduct surrounding that dispute from amounting to a repudiatory breach. An Employment Tribunal’s conclusions on fact and degree will not be disturbed unless affected by an error of law or perversity.

The Respondent appealed against an Employment Tribunal judgment upholding the Claimant’s complaint of constructive unfair dismissal. Her separate unlawful deduction of wages claim had failed and was not pursued. Both parties were solicitors who had entered into contractual arrangements concerning salary and bonus payments. The Tribunal found that the Respondent’s handling of the Claimant’s repeated attempts to clarify her remuneration breached the implied term of trust and confidence and caused her resignation.

On appeal, the Respondent challenged the Tribunal’s characterisation of the relationship, its factual findings, the assessment of causation and the alleged perversity of the decision. The question was whether the Tribunal had erred in law in finding a constructive dismissal.

1. The appeal was dismissed. The Employment Tribunal correctly directed itself on constructive unfair dismissal under the Employment Rights Act 1996.
2. An employee is dismissed where she terminates the contract in circumstances entitling her to terminate without notice by reason of the employer’s conduct. The conduct must amount to a significant breach going to the root of the contract.
3. The implied term of trust and confidence requires the employer not, without reasonable and proper cause, to conduct himself in a way calculated or likely seriously to damage the relationship of mutual trust and confidence. The assessment is objective. The employer’s intention is immaterial where the effect of the conduct is such that the employee cannot reasonably be expected to continue.
4. The employee must resign in response to the fundamental breach and must act promptly, or may be taken to have affirmed the contract. The effective cause of resignation was a matter for the Tribunal.
5. The Employment Tribunal was entitled to find that the Respondent’s deliberate maintenance of uncertainty, and his handling of the Claimant’s remuneration concerns, constituted a breach and caused her resignation. The employment-status issue had not been raised below and could not properly be introduced on appeal without further findings.
6. The perversity challenge raised issues of fact and degree entrusted to the Employment Tribunal. Its conclusions were explicable from its reasons and were open to it. The Tribunal had made no error of law.
7. A costs order was justified because the Respondent, a solicitor, had failed to prepare properly, did not attend the appeal and had threatened costs. Subject to submissions and a schedule, the costs of counsel attending the hearing were awarded, excluding conference and skeleton preparation.

• Employment Appeal Tribunal: appeal from the Employment Tribunal sitting at London South dismissed; the Tribunal’s finding of constructive unfair dismissal was upheld.