Logan v Celyn House Ltd

Where an employer has committed a repudiatory breach, an employee establishes constructive dismissal if the resignation was in response to that breach in part. The breach need not be the principal reason for resigning. Other complaints, including complaints which are unfounded or do not themselves amount to contractual breaches, do not prevent acceptance of the repudiation.

An appellate tribunal may substitute a finding rather than remit the matter where the tribunal’s unchallenged findings provide a clear factual basis for the legally correct conclusion and require no further investigation.

The claimant, a veterinary nurse, resigned after the respondent rejected her grievance appeal. Her grievances included alleged bullying and the respondent’s refusal to pay contractual sick pay.

The Employment Tribunal found that the non-payment of contractual sick pay was a repudiatory breach. It nevertheless dismissed the constructive-unfair-dismissal claim because it found that the claimant’s principal reason for resigning was her erroneous perception of bullying and dissatisfaction with the grievance process.

The claimant appealed. The central issue was whether a repudiatory breach had to be the principal reason for resignation, and whether the Employment Appeal Tribunal could substitute the proper conclusion on the Employment Tribunal’s findings.

1. Appeal allowed. The Employment Tribunal applied the wrong legal test. Once a repudiatory breach has been established, the issue is whether the employee resigned in response to it. It is sufficient that the breach was one reason for the resignation; it need not have been the principal reason. The claimant’s additional complaints, even if unfounded, did not prevent her from accepting the repudiation.

2. The Employment Tribunal had made an unchallenged finding that the failure to pay contractual sick pay was repudiatory. Its finding that the grievance appeal resulted in the resignation, read with its finding that the resignation concerned all twelve grievances, provided a sufficient factual basis for concluding that the sick-pay breach was a reason for resignation. Grievance 12 concerned the substantive non-payment, not merely the manner in which the grievance procedure was conducted.

3. The fact that the claimant’s concerns about treatment by another employee featured more prominently was consistent with contractual sick pay also being a reason for her resignation. The tribunal’s finding as to the principal reason therefore could not defeat the claim.

4. Applying the substitution approach stated in Hellyer Brothers Ltd v MacLeod [1987] ICR 526, no remittal was needed. The necessary findings were already available and required no further factual investigation. A finding of constructive dismissal was substituted. It was common ground that such a dismissal was unfair.

5. The respondent could still contend at the remedies stage that the claimant would have resigned in any event and had therefore suffered no loss.

• Employment Appeal Tribunal: Allowed the claimant’s appeal and substituted a finding of unfair constructive dismissal.

• Employment Tribunal: Dismissed the claimant’s constructive-unfair-dismissal claim, despite finding that the non-payment of contractual sick pay was a repudiatory breach. The lower decision’s citation was not stated in the judgment.