Constructive Dismissal

- It’s A Fundamental Question

It is often thought by employees that if their boss has a forthright or critical management style they have the right to resign and claim “constructive dismissal”.  In legal terms, the employee would argue that the “implied duty of trust and confidence” that exists in every employment relationship had been breached by the behaviour.

Just last year case law reached its high water mark in employees’ favour.  The Employment Appeal Tribunal considered the Judgment of Lord Steyn in the 1999 House of Lords case of Malik v. BCCI.  Lord Steyn had said that for an employer’s conduct to allow for a claim it had to be both “calculated and likely to destroy the relationship of trust and confidence.”  The EAT considered this was an error of wording and concluded that Lord Steyn had meant to say “calculated or likely to destroy the relationship of trust and confidence”.  By this small amendment, the EAT had swung the test of constructive dismissal in favour of employees.  It was not necessary to show that the employer had intended or “calculated” to destroy the relationship, merely that the result of it actions was that the relationship had been destroyed.

Fortunately, in 2008 the Courts have now reigned in this expansion of the law: 

In RDF Media Group Plc v. Alan Clements.  The High Court stated that for the employment contract to be destroyed by the employer’s conduct, there has to be a fundamental breach of it, lesser breaches are not sufficient:

“It is not enough to prove that the employer has done something which was in breach of contract, or “out of order” or that it has caused some damage to the relationship.”

In Claridge v. Daler Rowney Limited the Employment Appeal Tribunal has gone back on its verbal tampering with Lord Steyn’s Judgment and reinstated his original wording.  In other words, in order to prove constructive dismissal the employer’s conduct must be “calculated”.  It is not sufficient to merely say that an employer’s management style was unreasonable or too tough. It has to be so unacceptable that it falls outside the range of conduct that might be expected of the reasonable employer. This can only take place if it is “calculated” to do so.

It will be interesting to see if the Judgment has any effect on the increasing trend of constructive dismissal applications.  Only 10 years ago, it was often the case that an employee who did not like their workplace sought a new job, rather than take legal action. Hopefully this will be a sober reminder that a constructive dismissal will only exist if the employer has fundamentally destroyed the employment relationship.

For further information on this or any employment issues please contact the colemans-ctts Employment Team or email Tom Walker, Partner, at tom.walker@colemans-ctts.co.uk. Telephone – 0208 296 6878

Colemans-ctts solicitors have offices in Manchester, Kingston and Walsall and can offer legal guidance in a wide range of areas. Email enquiries@colemans-ctts.co.uk to find out how we can help