Constructive Dismissal

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In the recent case of Logan v. Celyn House Limited the EAT considered whether the “principal reason” for the resignation needed to amount to a fundamental breach of contract for the claim of constructive unfair dismissal to succeed.

In summary, the Claimant was a veterinary nurse who resigned in response to a grievance decision which she found unsatisfactory. The grievance involved a number of matters, including bullying and a failure to pay contractual sick pay. The ET found that the bullying was a figment of her imagination but found that the failure to pay contractual sick pay was a fundamental breach of contract. The ET held that there was a breach of her contract and that it was a repudiatory breach. Notwithstanding this finding, the ET did not find that the Claimant had been constructively dismissed as the ET held that the “principal reason” for the resignation was not the non-payment of contractual sick pay but the complaints of bullying.

The Claimant appealed against the Tribunal’s decision. The appeal was allowed to proceed on one ground only, namely, that the ET approached the question of constructive dismissal in the wrong way by looking at the “principal reason” for the resignation.

The EAT held that the ET had been wrong to look at the “principal reason” for the resignation. The ET should have considered whether there was a repudiatory breach of contract in failing to pay the sick pay and if so, whether it was a reason for the resignation, not whether it was the “principal reason”.

The EAT held that as the Claimant resigned in part because of the failure to pay sick pay and as it was a repudiatory breach, her claim of unfair constructive dismissal succeeded.

Written by
Edward Aston
8th September 2012