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Two wrongs don't prevent a fight

Two wrongs don’t prevent a fight: an employer cannot defeat a constructive dismissal claim by arguing that an employee was already in fundamental breach of contract but compensation can be reduced to nil

Following on from Rachel and Jonathan’s posts concerning breach of contract claims, I wanted to pick up on the Employment Appeal Tribunal (“EAT”) case of Atkinson v Community Gateway Association which provides helpful guidance where there has been an alleged prior breach of contract by an employee in a constructive dismissal scenario.  The facts are simple yet surprising:

Mr Atkinson was employed by Community Gateway Association as its Director of Resourcing.  During his tenure, it became apparent that there had been a £1.8m overspend.  At first, Mr Atkinson said he was responsible for this, but he then sought to pass the responsibility onto others.  The Chief Executive told him that his position was untenable: he could resign (with a small package) or face disciplinary proceedings.  Mr Atkinson declined the offer of the package and an investigation commenced.  

At around this time, Gateway discovered that Mr Atkinson was in a relationship with a lady working for another housing association and was in communication with her on work email during the working day.  In breach of the email policy that Mr Atkinson had written, the content of the emails was at times sexually explicit and also concerned work matters.  At one stage, in the emails, Mr Atkinson told his lover about a vacant post at Community Gateway, how to prepare her application, what questions would be asked at interview and how to make her presentation.  He also suggested to a colleague on the panel that she should be offered the job.  She was offered the role but declined it.  When they came to light after the respondent searched the claimant’s emails, these matters were added to the disciplinary investigation.  However, Mr Atkinson resigned before any outcome was reached.  He then claimed constructive dismissal (based on fundamental breach by the employer in searching his emails) among other things.

At first instance, the Employment Tribunal held that the claimant’s claim of constructive dismissal had no reasonable prospect of success because the claimant himself had breached the contract of employment fundamentally by his own misconduct before the employer had searched his emails. However, the EAT, clarifying a so far confusing line of cases, held that this was not the right approach: if the employee breaches the contract but the employer does not accept the breach and treat the contract as at an end, then the contract continues (because an unaccepted repudiatory breach of contract is “a thing writ in water”).  If there is a subsequent fundamental breach of contract by the employer such that the employee is entitled to claim constructive unfair dismissal then the claim may succeed but then compensation can be reduced to nil on Polkey grounds ie because the employee would have been dismissed in any event.

On the separate question of whether the employee was entitled to privacy in relation to his emails, the EAT held he was not: they were not labelled “private and personal” (as recommended in the policy drafted by the claimant) and he had used the font “wingdings” to try to hide the sexual content – which tended to suggest he expected they might at some stage be read.

This case is welcome in that it is instructive about the approach tribunals will take to situations involving both constructive dismissal and preceding misconduct – a situation that is relatively commonplace in my experience.  Indeed, Malky MacKay might have benefitted from reading the case report…

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