The recent case of Brooks v Leisure Employment Services Ltd [2023] EAT 137 serves as a useful reminder that initiating a grievance or appeal procedure is not in itself likely to affirm the employment contract for the purposes of a constructive dismissal claim.
Constructive dismissal
In summary, a constructive dismissal occurs where an employee resigns in response to conduct of their employer that amounts to a repudiatory breach of contract. The breach must be serious enough to justify the employee’s resignation.
Commonly, in order to establish a constructive dismissal, the employee must demonstrate that they resigned in response to the relevant breach and did so without undue delay, or they may be held to have affirmed the contract.
Affirmation is essentially a decision by the wronged party to continue the contract, waiving their right to treat the contract as coming to an end. It may be express or implied if the employee knows about the breach and continues to act in a way that is consistent that their contract is still ongoing.
Facts of the case
Ms Brooks was employed as a Resort Holiday Sales Advisor by Leisure Employment Services Ltd. Her role was based at a call centre and her pay was mainly based on commission. In March 2020, during the first COVID-19 lockdown, the company closed its resorts and Ms Brooks was asked to stay at home but would still receive full pay. Shortly after, she was deployed into a new home-working team handling customer issues and a WhatsApp group was created for this new team.
As there would be no sales due to the closure of the resorts, Ms Brooks was concerned about how she would be paid in this new role as her pay had been predominantly made up of commission. She sent an email raising these concerns and sought clarification on what her salary would now be during this period but received no response. Subsequently, she was removed from the team’s WhatsApp group without explanation. She was later told that this was because more people had been recruited into team, which was in fact untrue.
On 15 April 2020, Ms Brooks submitted a grievance, alleging breach of the implied term of mutual trust and confidence and discrimination. She again raised concerns about her financial security and requested documentation. During communications with the employer, she expressly wrote “I reserve all my rights”. On 25 June 2020, three months after the alleged breach, Ms Brooks sent an email resigning with immediate effect due to breach of the implied term of trust and confidence. Her grievance was later dismissed on 10 August 2020.
The Tribunal’s Decision
The Employment Tribunal (ET) found that the manner of the employer’s actions by removing Ms Brooks from the WhatsApp group had breached the implied term of mutual trust and confidence, fuelling her resignation. However, by delaying her resignation for 3 months and continuing to accept payment, it was held that she had affirmed the contract, and the ET therefore dismissed the claim. Ms Brook’s appealed this decision.
The Employment Appeal Tribunal (EAT) held that the ET had been wrong to focus on the delay of her resignation and acceptance of payment. The EAT determined that the ET had failed to consider the crucial fact that Ms Brooks had raised a grievance which had not been concluded at the time of her resignation and had specifically written “I reserve all of my rights” during her communications with the employer. This went against the notion that she simply affirmed the contract, and it was vital that it should have been taken into account. The case has been remitted to the Employment Tribunal.
Key considerations
In reaching their decision, the EAT cited W E Cox Toner (International) Ltd v Crook where it was held that an innocent party is not bound to make a choice to affirm or end their contract within a reasonable time. They also considered the case of Kaur v Leeds Teaching Hospitals NHS Trust, agreeing with their decision that exercising a right of appeal is not likely to be treated as a clear affirmation of the contract.