Case law: breach of contract remedied in constructive dismissal case

By: Fanny Marshall

Date: 19 June 2009

Employers will welcome clarification of the circumstances in which a breach of contract may be remedied in a constructive dismissal, following a recent ruling.

In this case, an employee, who was a university professor, was involved in marking student exam papers. He considered that a number of the papers were of poor quality and awarded low marks. However, his employer arranged for the papers to be re-marked, with higher marks awarded, without consulting the employee. The employee was unhappy.

Despite an internal investigation conducted by the employer, which vindicated him, the employee resigned, claiming constructive dismissal on the basis that there had been a breach of contract by the employer and, consequently, the relationship of trust and confidence had been destroyed. The employee’s claim was upheld by an employment tribunal. On appeal by the employer, the Employment Appeal Tribunal (EAT) found that there had been a fundamental breach of contract by the employer. However, the employer had, if judged objectively, remedied the breach by holding the internal investigation. This meant that, when the employee resigned, the employer was no longer in breach of contract. The EAT found that the tribunal had incorrectly applied a subjective approach (whether the employee considered himself exonerated by the internal investigation, so that trust and confidence was restored), rather than an objective approach. If it had applied an objective approach, it would have been bound to have concluded that the breach had been remedied.

The tribunal was therefore wrong to rule that the breach had not been remedied by the employer’s grievance procedure. In reaching its decision, the EAT reviewed the authorities on the ‘range of reasonable responses’ test applied by the tribunal (ie where an employer shows that a dismissal was for a potentially fair reason, a tribunal must decide whether the dismissal fell within the range of reasonable responses and was fair), and ruled that such a test is not appropriate in determining whether an employee has been constructively dismissed.

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