Our thoughts on the world of employment law - and beyond.

Constructive dismissal: affirmation of contract #2

Just a quick update on a further judgment in this area, following on from my post last month.

The President of the EAT has set out some really helpful guidance on the question of affirmation - ie, the question of whether the employee has waited too long before resigning and/or acted in a way consistent with upholding the contract, following an alleged breach of contract by the employer.

We all tend to focus on the time point - has the employee delayed for too long before acting on the breach.  But in Chindove v Morrisons, the President (Langstaff P) reminds us that it is not just time which is relevant to the question of affirmation.  Here, the tribunal had found that an employee off sick for six weeks after an alleged breach had waited too long before resigning - by not going sooner, he had affirmed the contract and could no longer claim constructive dismissal.  But the EAT judgment puts things in a wider social and legal context.  In essence:-

  • ‘The matter is not one of time in isolation’.  What one needs to focus upon is whether the employee has shown that he has made the choice to go;
  • Whilst this is often done by remaining in active employment, that is not always the case. Employees can affirm a continuation of contract in other ways - by what they say and do, and by communications showing they intend the contract to continue.  The President suggests that the reason we have all got so fixated on time is because remaining in employment is the usual way in which one can infer an intention to uphold the contract.  But he reminds us that there are real social and financial reasons why an employee may wish to accept repudiation of the contract but simply not be able to afford to do so - ‘deciding to resign is a serious matter...for most employees’.  ‘It will require them to give up a job which may provide them with their income, their families with support, and be a source of the community.  His mortgage, his regular expenses may depend upon it and his economic opportunities for work elsewhere may be slim.  There may on the other hand be employees who are far less constrained, people who can quite easily obtain employment elsewhere….It would be entirely unsurprising if the first took much longer to decide on such a dramatic life change as leaving employment…than it would be in the latter case.  In other words, it all depends upon the context and not upon any strict time test [my emphasis].
  • In that context, it is very relevant whether the employee is actually actively at work during the time it takes to make his/her decision ‘so that it could be concluded that he was honouring his contract and continuing to do so in a way which was inconsistent with his deciding to go. When an employee is sick and not working, that observation has nothing like the same force’.

A very sensible and - I have no doubt - correct decision as far as employees are concerned, but one which does leave employers potentially in limbo, in some cases at least. It is a useful reminder to us that time isn’t everything here and that in circumstances where employees go off sick after an incident, or continue to work but raise concerns via a reservation of rights etc, one needs to be alert to the possibility of a constructive dismissal claim founded on a resignation quite a bit further down the line.  It remains the case that most employers will test the point in their defences (along with the usual arguments that there was no fundamental breach in the first place etc), but the guidance does give us a reminder of the correct analysis in such cases.

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