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Can raising a grievance prevent an employee claiming constructive unfair dismissal?

Employment Matters e-update – May 2021

Overview

The Employment Appeal Tribunal (EAT) has held that an employee cannot automatically be considered to have ‘affirmed’ (i.e. accepted as continuing) an employer’s breach of contract (and therefore lose the right to claim constructive unfair dismissal) by lodging or engaging in a grievance process.

Gordon v J&D Pierce (Contracts) Ltd

The Claimant, Mr Gordon, was employed by J&D Pierce (Contracts) Ltd as their commercial manager for a period of 10 years.

He lodged a grievance because of a poor working relationship with his line manager.

Following this, the relationship continued to get progressively worse until the Claimant resigned and brought a claim for constructive dismissal before the Employment Tribunal (ET).  Mr Gordon argued that his employer’s conduct had seriously damaged the implied term of trust and confidence.

The ET dismissed his claim. Whilst the ET accepted that there were instances in which his employer had behaved badly, the ET considered that the breakdown of the relationship could not entirely be attributed to the employer’s actions.

In the circumstances Mr Gordon had to bear some of the blame. The ET noted that even if this were not the case, and there had been a fundamental breach by the employer entitling Mr Gordon to resign, he could not rely on that breach as by lodging a grievance, Mr Gordon had affirmed his contract.

Mr Gordon appealed to the EAT on a number of grounds.  He argued that the Tribunal had erred firstly in finding that there had been no fundamental breach of contract, and secondly that he had affirmed the contract by lodging the grievance and therefore could not claim that he had been constructively dismissed.

EAT decision

Mr Gordon’s appeal was dismissed by the EAT, finding as the ET had done, that there was no fundamental breach on the part of the employer.   Although not required to do so, the EAT then considered the affirmation point, and agreed with Mr Gordon’s position.

The EAT looked considered a previous Court of Appeal decision (Kaur v Leeds Teaching Hospitals) on this issue could apply in the circumstances before it. In that case, the Court of Appeal held that ‘exercising a right of appeal against what is said to be a seriously unfair disciplinary decision is not likely to be treated as an unequivocal affirmation of the contract’.

The EAT considered that the same reasoning could apply in the current circumstances and that exercising a contractual right to raise a grievance should not automatically be regarded as an affirmation of the contract as a whole.

In the EAT’s view, it is possible to consider a contract to be terminated for some purposes, but continuing for others and held that the ET had erred in law by concluding that, where the Claimant intimated that he considered the contract to have come to an end, he was to be taken to affirm that the contract had come to an end for all purposes.  This was particularly so in relation to grievance/appeal provisions because of their nature and purpose.

This decision limits the ability of employers to argue that an employee has lost the right to claim constructive dismissal by exercising their rights under a grievance process by arguing that the contract has been affirmed. It is questionable, however, whether this decision provides employees with an unfettered right to exercise their rights under a grievance procedure at any point (in particular after he has communicated his decision to leave the employer).

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