The Employment Tribunal has heard a constructive unfair dismissal claim brought by a senior employee, who resigned in protest after he was given a “low status” junior desk.
Constructive unfair dismissal:
Where an employer commits a repudiatory breach of an employment contract, and the employee resigns in response to that breach, the employee may be able to argue that they have been constructively dismissed, allowing them to bring claims for wrongful and/or unfair dismissal.
A repudiatory breach is a breach of contract which is so serious that it goes to the very core of the employment contract, such as a breach of the implied term of mutual trust and confidence. Such a breach might be found where an employee is demoted or otherwise stripped of certain responsibilities or status in their role without their agreement.
The facts:
In Walker v Robsons (Rickmansworth) Ltd, Mr Walker worked as a manager for an estate agency, Robsons. In 2022, Mr Walker was transferred to another branch of the agency but continued in his role as manager. Then, in 2023, Mr Walker was asked to move back to his old branch. Mr Walker had initially assumed that, on his return to the branch, he would continue in his role as the sole manager, but he later discovered that he would be sharing his managerial role with a more junior colleague.
Desk allocation at Robsons was important, as the desk at the back of the office had always been reserved for the manager of the branch and, therefore, held “practical and symbolic” significance. By the time Mr Walker returned to the branch, the junior colleague had already taken the back desk, and Mr Walker was told he would now be working from the middle desk instead.
Mr Walker argued that this desk allocation suggested he was now an assistant manager rather than branch manager and therefore that he had been demoted from his previous role as sole manager of both branches. The situation quickly escalated from there, and Mr Walker soon resigned in response. He then brought a claim for constructive unfair dismissal before the Employment Tribunal, asserting that Robsons’ actions amounted to a breach of the implied term of mutual trust and confidence.
Decision:
The Employment Tribunal agreed with Mr Walker that he was entitled to view the desk allocation as a demotion. In the view of the Tribunal, this was a logical conclusion for Mr Walker to reach, since he would now be sitting and working amongst junior colleagues.
Robsons had failed to communicate the logistics of the move, and the Tribunal held that this conduct “although not calculated” was likely to “destroy or seriously damage the relationship of trust and confidence” between employee and employer. As a result, it was held that Mr Walker had resigned in response to a breach of the implied term of mutual trust and confidence, and that he had therefore been constructively unfairly dismissed.
Comment:
This decision demonstrates the potential breadth of circumstances in which a constructive unfair dismissal claim can arise.
It also serves as an important reminder that such a claim does not require the employer to have acted in a calculated or malicious way, and that even innocent mistakes can breach the implied term of mutual trust and confidence and potentially give an employee a claim.
Having in place clear policies and communicating the rationale for decisions can help to alleviate some of these risks, but there is no one-size-fits-all solution to avoiding these claims, and each scenario must be carefully considered on its merits.
If you anticipate that an employee might be planning to bring a constructive unfair dismissal claim, or if you are an employee who would like advice on whether you might have grounds for a claim yourself, then please do get in touch at [email protected]
