Bailey v Alexander House Agencies Ltd

In a constructive dismissal case, the tribunal must ask whether the employee resigned in response to the employer’s repudiatory breach. The breach need not be the sole or immediate cause of resignation. Other factors, including financial pressure or the availability of another job, do not prevent a finding that the resignation was in response to the breach where the breach was an effective cause.

An employer may breach the implied term of trust and confidence by failing to take prompt and effective action after an employee reports threats of violence, particularly where the employee remains liable to work with the alleged perpetrator. It is also unreasonable for an employer simply to ignore a grievance without acknowledging it or explaining how it will be dealt with.

Mrs Bailey appealed against the dismissal of her complaint of constructive unfair dismissal by an Employment Tribunal sitting in Manchester. She had been threatened by a sales manager at work, complained to management, and later submitted a written grievance. The Employment Tribunal accepted her account of the incident but concluded that the employer had taken prompt action by moving the sales manager and that the failure to deal with the grievance was not unreasonable.

The Tribunal also concluded that the immediate reason for resignation was the inadequacy of statutory sick pay and the need to obtain other employment. The appeal concerned whether those factual findings were perverse and whether the Tribunal had applied the correct test for resignation in response to a fundamental breach.

1. Appeal allowed. Findings were substituted that the claimant had been constructively dismissed and that the dismissal was unfair. The question of remedy was remitted to a freshly constituted Employment Tribunal.

2. The Tribunal’s finding that the employer had promptly moved the sales manager so that he no longer worked alongside the claimant was perverse. The evidence showed that he had worked with her on 1 and 3 October and would have continued to do so. The finding was unsupported by the evidence and failed to take account of the claimant’s witness statement and contemporaneous grievance.

3. The Tribunal misunderstood the law by concentrating on the immediate reason for resignation. Applying Jones v Sirl and Son (Furnishers) Ltd and Nottinghamshire County Council v Meikle, the relevant question was whether the claimant resigned in response, at least in part, to the employer’s fundamental breach. A breach need not be the sole cause of resignation.

4. Proceeding on the basis of the implied term of trust and confidence stated in Malik v BCCI, the employer’s failure to take effective action after a complaint of threats of violence, while leaving the claimant exposed to working with the perpetrator, could constitute a fundamental breach. The employer’s failure even to acknowledge the grievance or explain how it would be handled was wholly unreasonable.

5. The financial pressures affecting the claimant’s decision did not displace the conclusion that the employer’s handling of her complaints was the cause of her resignation. Directions were made for schedules of financial loss and a counter-schedule.

• Employment Appeal Tribunal: allowed the appeal against the Employment Tribunal’s judgment dismissing the constructive unfair dismissal complaint. Findings of constructive and unfair dismissal were substituted, with remedy remitted to a freshly constituted tribunal.