John Bourne & Co v. Weedon

Where an employee has agreed temporarily to continue working on existing terms while proposed new terms are discussed, a tribunal must consider whether any repudiatory breach remained at the date of resignation and whether the resignation was in response to it.

In deciding whether a constructive dismissal was by reason of redundancy under section 139 of the Employment Rights Act 1996, the tribunal must identify the main reason for the dismissal. Closure of a workplace may be the occasion for an employer’s proposal to impose new contractual terms, rather than the operative reason for the constructive dismissal.

The employer closed the depot at which the employee lorry driver had based his vehicle. It proposed a new location nearer his home, but initially required him to sign a standard contract containing less favourable terms.

The employee declined the proposed contract. The employer then agreed that he could work from the new location on his existing contract for three months while the proposed terms were discussed. About one month later, he resigned and claimed redundancy pay.

The Employment Judge held that there had been a constructive dismissal by reason of redundancy and that the employee was entitled to a redundancy payment. The employer appealed, contending that the Judge had failed to address the temporary agreement and had wrongly identified the reason for dismissal.

1. Appeal allowed. The Employment Judge erred in law and the whole claim was remitted for a rehearing before a different Employment Judge.

2. The Judge had found that the employee agreed to work for three months at the new location on his existing contract while the proposed new terms were discussed. That finding did not sit easily with the later conclusions that an existing fundamental breach had arisen from the requirement to accept the new terms and that the employee resigned in response to it. The Judge had to analyse whether, at the date of resignation, the employer was insisting on the new terms, whether a repudiatory breach remained, and whether the resignation was caused by that breach.

3. The Judge also failed adequately to determine the reason for the constructive dismissal for the purposes of section 139 of the Employment Rights Act 1996. The employee was prepared to work at the new location. On the findings, his objection was to the proposed contractual terms. The closure of the former depot may therefore have been the occasion for the employer’s attempt to introduce those terms, rather than the main reason for the dismissal.

4. A fresh tribunal could nevertheless conclude that there was a constructive dismissal for some other substantial reason, arising from the employer’s attempt to rationalise contractual terms, and that it was unfair. The appeal therefore did not determine the employee’s ultimate entitlement.

• Employment Appeal Tribunal: appeal allowed in [2017] UKEAT 0150_17_0911; the claim was remitted for a complete rehearing before a different Employment Judge.
• Employment Tribunal: Employment Judge Wallis, by a decision sent on 17 January 2017, held that the employee had been constructively dismissed by reason of redundancy and was entitled to a redundancy payment.