September 2008

What’s New?

Constructive Dismissal – It’s all kicked off…

Constructive dismissals rarely hit the headlines and then two potential claims come along at the same time with the resignations last week of football managers Alan Curbishley and Kevin Keegan.

Whilst the football world may often seem far removed from the ordinary working world, football managers are still employees of their clubs and the usual contractual rules govern their relationship in the same way as they govern any employer-employee relationship.

In the statements accompanying their resignations, Alan Curbishley cited a breach of ‘trust and confidence’ as the reason behind his resignation whilst Keegan alleged that certain key aspects of his role had been taken away from him making his position untenable.

How does it affect me?

So when do issues of constructive dismissal arise?

It has long been accepted by the Courts that for any employment relationship to be sustainable a relationship of ‘trust and confidence’ must exist between employer and employee and a term to this effect is implied into every employment contract.

In simple terms, constructive dismissal is essentially the flip-side of gross misconduct – it’s where the employer behaves so badly that the employee is entitled to resign with immediate effect.

In legal terms, the employer must commit a fundamental breach of contract – a breach so serious as to entitle the employee to treat the relationship as at an end – by acting without reasonable and proper cause in such a way as to destroy or seriously damage the employee’s trust and confidence in the employer.

The most common situations where constructive dismissal claims arise are where an employee’s statutory rights have been violated, for instance in discrimination cases, or where the employer unilaterally imposes less favourable terms and conditions – often relating to pay, hours of work or duties and responsibilities. Company reorganisations also frequently give rise to complaints of constructive dismissal where employees believe that they have been demoted or deliberately and unfairly ‘side-lined’.

What do I Need to Do?

From an employer’s perspective, in order to minimise the risk of constructive dismissal claims, they should:-

• Check the relevant Employment Contract(s) and legal entitlements to ensure that what they are proposing is permissible – Employment Contracts can always be drafted to allow employers considerable flexibility

• Ensure that the reasons behind their actions are legitimate and can be justified if need be

• Consult with the employee(s) affected so as to ensure that they understand the employer s actions and have the chance to either agree to them or air any grievances at an early stage so that any issues can be addressed

From an employee’s perspective, the employee will need to be satisfied that, putting their own feelings to one side, a Court or Tribunal looking at the situation objectively will agree that the employee was justified in treating the matter as one which entitled to them to resign and regard themselves as constructively dismissed. The employee must also ensure that they act promptly in resigning in response to the situation.

If you have any queries regarding these or any other employment law issues, please contact Paul Lane on 020 7712 1715 or email plane@lanegraham.co.uk

Please note: The content of this Update does not constitute advice and it is not intended to be a comprehensive and definitive statement of the law. Advice should always be taken as to individual circumstances. Please refer to our Terms of Use.