Parkview Care Ltd v Fenn

The fairness of a disciplinary hearing may be the operative cause of a constructive dismissal even where an employee's antecedent misconduct prompted the hearing. The correct inquiry is whether the employer's conduct of the meeting was within the band of reasonable responses; if it was not, resignation can qualify as constructive dismissal.

When assessing contributory fault under Employment Rights Act s.123(6), tribunals must give a rational, explainable reduction. A token deduction can be set aside as perverse and replaced on appeal where facts justify a materially larger percentage.

Contractual wording that expressly contemplates a sleeping-in "allowance" should be construed to create an entitlement to that allowance rather than an entitlement to ordinary hourly pay, unless the contract unambiguously provides otherwise.

The appellant employer challenged an Employment Tribunal decision that the respondent had been constructively dismissed after walking out of a disciplinary meeting. The ET found the hearing lacked basic fairness and dismissed the employer's arguments that the employee's prior dishonesty was the primary cause of the dismissal. The employer also appealed the ET's assessment of contributory fault and the payment due for "sleeping-in" periods. The Employment Appeal Tribunal heard the appeal and was asked to decide (a) whether the ET was right to treat the unfair hearing as the cause of the resignation, (b) whether the 5% contributory-deduction was perverse, and (c) the correct contractual construction of the sleeping-in allowance.

1. Disposition: The appeal was allowed in part and dismissed in part. The EAT upheld the ET's finding of constructive dismissal but allowed the appeal on contributory fault and on the contractual construction of the sleeping-in entitlement (see paras [1]–[3]; [10]–[12]; Postscript).

2. Constructive dismissal: The EAT held that the proper focus is the employer's conduct at the disciplinary meeting and whether that conduct fell within the band of reasonable responses. The ET was entitled to find the meeting unfair and to conclude that the employee's resignation resulted from that unfairness rather than from antecedent misconduct (see paras [1]–[3]).

3. Continuation after grievance: The tribunal rightly concluded that, given the circumstances and ACAS guidance, the employer should have stopped or rearranged the hearing to take account of a grievance. Ignoring the grievance rendered the process unfair (see para [2]).

4. Contributory fault: The EAT found the 5% deduction for contributory fault under Employment Rights Act s.123(6) was perversely low. The EAT emphasised that reductions must be rational and justified, not a mere "gesture". Relying on the ET's factual findings about deliberate misuse of a company vehicle and active deceit, the EAT exercised its appellate remit to fix contribution at 25% rather than remit the issue (see paras [5]–[9]; Postscript).

5. Contractual construction of sleeping-in allowance: The EAT held that the contractual documents did not treat sleeping-in as "on-call" or as "additional hours" for which ordinary hourly pay is automatically due. The covering letter and the term "allowance" indicate a contractual entitlement to an allowance for sleeping-in distinct from normal hourly pay. The ET's contrary conclusion was overturned (see paras [10]–[12]).

6. Orders and practical consequences: The ET's finding of constructive dismissal stands. The EAT varied the assessment of contributory fault to 25%. The EAT substituted its construction of the sleeping-in provision and remitted to give effect to that construction as necessary (see Postscript).

• Employment Appeal Tribunal: Appeal heard; majority judgment delivered by Lord Summers (EAT) allowing the appeal in part and varying the contributory deduction and contractual construction (this judgment) (see paras [1]–[12]; Postscript).
• Employment Tribunal: Initial decision found constructive dismissal, awarded compensation with a 5% contributory deduction and ordered sleeping-in paid at hourly rate (decision under appeal).