Constructive dismissal and grievances

29th January 2021

We know that employees are able to resign in the event of a fundamental breach of contract by their employer and so treat themselves as dismissed.

We often come across cases where an employee decides to engage in a grievance process, despite having made a breach of contract complaint. The question for employers is, by the employee engaging in a grievance procedure, does that mean they have accepted that their contract is continuing and therefore waived any breach by their employer?

This issue was considered in the recent case of Gordon v J & D Pierce (Contracts) Limited. The employee resigned and brought a claim of constructive dismissal as a result of his relationship with his manager deteriorating. The employment tribunal (“ET”) held that while the respondents had behaved badly in some ways not all the causes of the breakdown were to be attributed to them and the employee was to some extent a contributor to the breakdown. The ET also held that as the employee had engaged the grievance procedure this was an acceptance of the breach and as a result, the employee had waived the breach by the employer. The employee appealed to the Employment Appeal Tribunal (“EAT”).

The appeal was rejected by the EAT for other reasons but found that by the employee engaging in a grievance process available under the contract of employment, it did not mean that the employee had waived the breach by their employer.

What this case demonstrates is that where an employee decides to engage in a grievance procedure this should not be regarded as the individual waiving any breach by their employer. It also highlights the need for employers to treat grievances carefully. If they are not dealt with properly then this in itself could be a breach of contract and entitle an employee to resign and claim constructive unfair dismissal or potentially discrimination.

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