Does an employee who delays resigning following a fundamental breach of contract lose the right to bring a constructive unfair dismissal claim on the basis that they have affirmed the contract given the passage of time between the breach and the resignation?
Two recent cases heard before the Employment Appeal Tribunal (EAT) provide helpful guidance in confirming that where there is a delay between an alleged fundamental breach of contract and the employee’s resignation, the delay itself does not necessarily amount to the employee affirming the contract.
Ms Sandra Brooks v Leisure Employment Services Limited
In this case, the EAT found that a three-month period between an employer’s breach of contract and employee’s resignation does not amount to the employee affirming the breach.
The claimant was a resort holiday sales adviser whose pay was predominantly made up on commission. During the COVID-19 lockdown in 2020, the claimant was asked to work from home as part of a new home-working team. As a member of this team, the claimant was included on the home-working WhatsApp group.
The claimant emailed the respondent with questions about her pay structure, given there would be no commission payments from sales owing to the closure of the respondent’s resort as a result of the lockdown. The respondent did not respond to the claimant’s email. When the claimant chased the respondent for a response to her questions, she was removed, without explanation, from the home workers’ WhatsApp group.
The claimant raised a grievance on 15 April 2020 alleging a breach of the implied term of mutual trust and confidence. The claimant requested documentation and raised concerns about her financial security. On 5 May 2020, during email discussions, the claimant sent an email to the respondent, stating “I reserve all my rights”. On 25 June 2020, the claimant resigned by email with immediate effect asserting a breach of the relationship of trust and confidence. The claimant’s grievance was subsequently dismissed on 10 August 2020.
The claimant raised a claim of constructive unfair dismissal. An employment tribunal found that the employer’s action in removing her from the WhatsApp group was a breach of contract. However, the tribunal also found that by continuing in employment until 25 June 2020, the claimant had waived the breach and affirmed the contract such that her constructive unfair dismissal claim failed.
The claimant appealed, and on 8 November 2023, the EAT set out their judgement upholding the appeal. The EAT cited the finding in W E Cox Toner (International) Ltd v Crook [1981] ICR 823 that delay in itself does not constitute affirmation of the contract, albeit if it is prolonged it may be evidence of implied affirmation.
The EAT further found that where a grievance procedure is entered into for the purposes of allowing the employer an opportunity to resolve an issue, this is unlikely to be treated as an affirmation of the contract. The EAT also noted that the tribunal had failed to consider both the claimant’s email reserving her rights and the fact that the grievance remained unresolved at the time the claimant resigned.
The EAT findings in this case serve as a helpful confirmation that invoking a contractual grievance procedure and remaining in employment for a period after a breach of contract has occurred will not inevitably be seen as affirmation of contract. As such, an employee may still proceed with a constructive unfair dismissal claim even where there has been passage of time following the breach of contract.
The findings in Ms Sandra Brooks v Leisure Employment Services Limited regarding an employee proceeding with a constructive dismissal claim where there has been passage of time following the alleged breach of contract have been further supported in the recent case of Dr Paul Leaney v Loughborough University.
Dr Paul Leaney v Loughborough University
The claimant had worked for Loughborough University since 1979 as a member of its School of Engineering and as a warden of the halls of residence. Following concerns about how the claimant had handled a student matter, a disciplinary investigation was held which found there was no formal case to answer. The claimant raised a grievance and then an internal appeal when his grievance was only partially upheld. Further communications continued between the claimant and the respondent regarding the handling of the student matter without any resolution.
The claimant was signed off sick on 10 September 2020, following negotiations over the summer between the claimant’s solicitor and the respondent, which again failed to reach any resolution between the parties.
On 28 September 2020, the claimant resigned and brought an employment tribunal claim for constructive dismissal alleging a cumulative breach of the implied duty of trust and confidence. This claim was dismissed by the employment tribunal on the basis that the claimant had affirmed the contract given that between the date of the act alleged to be the last straw and the date of his resignation, there had been a passage of time, during which the claimant had received competent legal advice and did not indicate he was working under protest.
The claimant appealed this decision and the EAT upheld his appeal on the grounds that “it is not the passage of time, as such, prior to resignation that gives rise to affirmation, but conduct or other circumstances occurring in that period from which affirmation may be inferred.”
The EAT referred to the other relevant circumstance in this case, which were:
- The passage of time coincided with the summer holidays during which time the claimant was not doing any significant work;
- There had been ongoing negotiations as some sort of attempt at resolution;
- The claimant was off sick for a period of time;
- The claimant had a very long length of service; and
- The practical implications on an employee in considering whether or not to resign.
The EAT confirmed that “where an employee postpones resigning in order to pursue a contractual grievance procedure which might lead to a resolution of their concern, that will generally not amount to an affirmation. Rather, the employee should be treated as continuing to work and draw pay for a limited time while giving the employer the opportunity to put matters right.” As such the EAT found that whilst in this case the claimant did not state he was working under protest, “he could be said to have been working on while he allowed the respondent some opportunity to try to address his concerns in some way through these negotiations, before deciding whether to resign.”
Providing further helpful guidance on affirmation of a breach, the EAT also found “if the injured party communicates that he is considering and, in some sense, reserving, his position, or makes attempts to seek to allow the other party some opportunity to put right the breach, before deciding what to do, then if, in the meantime, he continues to give some performance or to draw pay, he may not necessarily be taken to have thereby affirmed the breach.”
Both cases provide a clear and helpful reminder that, by itself, a delay in resigning following a fundamental breach of contract will not necessarily be demonstrative that an employee has affirmed the contract. However, it remains that each constructive dismissal case will be fact-specific.
Constructive dismissal claims remain challenging for employees to bring, given they have to both prove a breach of contract and show that they have resigned in response to the breach. Employers faced with a constructive dismissal claim should consider factors such as:
- The period of time the employee remains in employment after the breach ‒ the longer the period of time, the more likely it is to be found that the contract has been affirmed;
- The behavior of both parties in the period between the alleged breach of contract and the employee’s resignation;
- The employee’s length of service;
- Whether there was any period of sickness absence; and
- Any indication whether written or verbal that the employee was working under protest or expressed that they were reserving their rights.