In the recent case of Atkinson v Community Gateway Association UKEAT/0457/12, the Employment Appeal Tribunal (EAT) considered whether an employee who had repudiated his employment contract could bring a constructive dismissal claim following his employer’s subsequent repudiatory breach of contract.

Mr Atkinson was employed by Community Gateway Association (the Association) as the Director of Resources. As part of his role, Mr Atkinson had drafted the Association’s email policy.

Towards the end of 2010, the Association discovered that there had been a £1.8 million overspend.  Mr Atkinson initially accepted sole responsibility for the overspend, but he later claimed other employees of the Association were responsible.  As a result of his part in the overspend, Mr Atkinson was offered a severance package.  Mr Atkinson rejected the offer and he was subsequently suspended pending disciplinary proceedings.

During the course of the disciplinary investigation it transpired that Mr Atkinson had been sending sexually explicit emails to his girlfriend (who was employed by another Housing Association). This was contrary to the Association’s email policy.  Mr Atkinson had also encouraged his girlfriend to apply for a job with the Association and had sought to influence the recruitment decision without disclosing the nature of their relationship.

     Prior to the disciplinary hearing, Mr Atkinson resigned with immediate effect.  Mr Atkinson subsequently brought a constructive unfair dismissal claim alleging that the Association had repudiated the employment contract because of the way it had conducted the disciplinary investigation.  Mr Atkinson also alleged that, by accessing his emails, the Association had breached his right to privacy under Article 8 of the European Convention of Human Rights (ECHR).

The Association applied to strike out the constructive unfair dismissal claim on the ground it had no reasonable prospect of success.  The application was successful and the Employment Tribunal (ET) held that Mr Atkinson was barred by law from claiming constructive unfair dismissal because of his own prior repudiatory breach of the employment contract, namely his involvement in the Association’s £1.8 million overspend.

Mr Atkinson could not therefore rely on the Association’s repudiatory breach of his employment contract because he had already repudiated the same contract.

  The ET also held that Mr Atkinson could not rely on a breach of Article 8 of the ECHR because he had no reasonable “expectation of privacy” in the circumstances. Further, the Association’s access to Mr Atkinson’s work email account was a proportionate means of pursuing a legitimate aim.

Mr Atkinson appealed.  The EAT upheld the appeal, referring to the Scottish case of McNeil v Aberdeen City Council (No 2) [2013] ScotCS CSIH 02 on the basis it was consistent with the correct principles in English law.  In particular, where a party with the right to end the employment contract as a result of a repudiatory breach did not do so, it is open for the other party to accept a subsequent repudiatory breach and end the contract.  However, the EAT acknowledged that any compensation award could be reduced by up to 100% if an employer could demonstrate that it would have fairly dismissed an employee earlier had it discovered the full extent of the employee’s original repudiatory breach.

The EAT also found that the ET had not erred in its judgement when finding that Mr Atkinson had no expectation of privacy in respect of the emails he had sent from his work account.

This case clarifies an important issue in respect of constructive unfair dismissal cases where there has been a repudiatory breach of contract by the employee which pre-dates the repudiatory breach of contract by the employer, on which the employee seeks to rely for his claim.