Gibbs v Leeds United Football Club Ltd

An employer repudiates a fixed-term employment contract where, viewed objectively, its conduct shows an intention no longer to perform the employee’s essential contractual duties. The contractual scope of a role may be informed by the established meaning of the job title and the parties’ performance of the contract. A contractual power to give reasonable directions does not permit an employer to impose work involving a clear loss of status and outside the contractual expectations of the role. An employee is not required to accept re-employment by the same employer where the employer’s prior conduct makes a return untenable. Compensation must give credit for subsequent earnings and for bonuses referable to the period covered by the repudiated contract, with appropriate arrangements to avoid over-compensation where the bonus is uncertain.

The claimant was employed by Leeds United Football Club Ltd as Assistant Manager under a fixed-term contract ending on 30 June 2016. Following the departure of the manager, the claimant was excluded from first-team work and was directed to work only with under-18 and under-21 players. He resigned on 26 July 2014, alleging that Leeds had shown an intention not to honour the contract.

The claim concerned whether the claimant had been constructively dismissed by a repudiatory breach, whether his resignation responded to that breach, and the assessment of damages. The quantum issues included mitigation and the treatment of later employment income and prospective bonuses.

1. Liability. The claim succeeded. The contractual duties of an Assistant Manager were not exhaustively stated, but the evidence established that the role involved participation in the selection, tactics and training of the first team. That understanding was supported by the job title, the claimant’s previous work and the parties’ conduct.
2. Although Leeds could give reasonable directions, directing an experienced first-team manager and coach to have no contact with the first team and to work only with under-18 and under-21 players was not reasonable in context. It involved a clear loss of status and failed to meet the contractual expectations of the role.
3. The email of 23 July 2014 objectively demonstrated an intention by Leeds thereafter to refuse performance of the contract in its essential terms. That conduct was repudiatory. The claimant resigned shortly afterwards and did so in response to the breach. His earlier willingness to discuss consensual termination did not prevent the conduct from constituting a breach, since he remained willing to perform his contractual duties.
4. The email was sent with at least apparent authority. It was issued by the Club Secretary on instructions said to derive from the Manager and Mr Umbers, and Leeds had not revoked the instruction.
5. Mitigation and damages. The claimant was not unreasonable in refusing the later offer to return as Head Coach. Leeds’ treatment of him made a return untenable unless he chose to take the risk that its conduct would change. Credit had to be given for later employment earnings and for net bonuses payable by Tottenham Hotspur Football Club in respect of the period before 30 June 2016.
6. The damages award was assessed at £331,426.05 before the relevant bonus adjustment. The court proposed that an appropriate amount be retained by the claimant’s solicitors as stakeholders until the bonus position was established, with payment of the balance forthwith and repayment to Leeds, with attributable interest, to the extent required to prevent over-compensation.