Cox v Northern Devon Healthcare NHS Trust

An Employment Tribunal may limit compensation under section 123(1) where it finds that, but for the constructive dismissal, the employee would later have been fairly dismissed for some other substantial reason. An irretrievable breakdown in trust and confidence may be such a reason, but the label cannot avoid proper scrutiny of its factual basis, the employer’s reasonable grounds and process, and the range of reasonable responses.

Under section 123(6) of the Employment Rights Act 1996, a reduction for contributory conduct requires culpable conduct which caused or contributed to the constructive dismissal. The inquiry focuses on why the employer committed the repudiatory breach. Conduct predating the relevant employment relationship, or unknown to the employer when it acted, cannot provide that causal contribution.

The Claimant, a maintenance worker, resigned after the Respondent instructed him to return in the IT Department rather than the Estates Department. Earlier proceedings established that this instruction was a repudiatory breach and that the resulting constructive dismissal was not because of protected disclosures.

Following two earlier appeals and remittals, the Employment Tribunal limited compensation to 12 weeks. It found that the Respondent would then fairly have dismissed the Claimant for an irretrievable breakdown in trust and confidence. It also reduced the compensatory award by 50% for the Claimant’s culpable contribution to the repudiatory breach.

The Claimant appealed those findings, including the Tribunal’s conclusion that his stated intention to continue an external campaign had contributed to the instruction requiring him to work outside Estates.

1. Appeal dismissed. The Employment Tribunal was entitled to find that the Claimant’s loss ended 12 weeks after the constructive dismissal. It permissibly found that, had the repudiatory instruction not been given, the Respondent would fairly have dismissed him after a reasonable process for some other substantial reason: an irretrievable breakdown in trust and confidence.

2. A loss of trust and confidence may constitute some other substantial reason under section 98 of the Employment Rights Act 1996. It cannot, however, be used as a label to avoid the scrutiny appropriate to a conduct dismissal. The Tribunal had assessed whether the Respondent would have reasonable grounds, following a reasonable process, and whether dismissal would fall within the range of reasonable responses. Its assessment was analogous to that required by BHS v Burchell [1978] IRLR 379.

3. The Tribunal had considered the full background, including the Respondent’s earlier failings and the complexity of the relationship. It was nevertheless entitled to conclude that the Claimant would not work in another department, would continue his external campaign, and that the relationship had become generally unworkable. Its conclusion was a permissible evaluative and prospective finding, not an impermissible short-cut.

4. For section 123(6), the required causation concerns the dismissal. In a constructive-dismissal case, the question is why the employer committed the fundamental repudiatory breach. The Tribunal correctly excluded conduct which predated reinstatement, conduct occurring when the parties did not regard the Claimant as employed, and matters unknown to the Respondent when it made the relevant decision.

5. The Tribunal was entitled to find culpable the Claimant’s continuing stated intention to pursue an external campaign, rather than merely internal grievances. That intention was maintained throughout the relevant communications and was known before the Respondent communicated the instruction requiring work in IT. The repudiatory breach crystallised on that communication. The Tribunal could therefore find that the intention contributed to the breach and assess contribution at 50%.

• Employment Appeal Tribunal: appeal dismissed; the Employment Tribunal’s limitation of loss to 12 weeks and 50% reduction for contributory conduct were upheld.

• Employment Tribunal: on the final remission, awarded compensation for constructive unfair dismissal, limiting loss to 12 weeks and reducing it by 50% under section 123(6) of the Employment Rights Act 1996.

• Earlier Employment Appeal Tribunal proceedings: prior appeals and cross-appeals resulted in remittals concerning the fairness of the constructive dismissal, the proper period of loss, and contributory conduct.