Gibbs v Leeds United Football Club

High Court decision holding that an assistant manager's effective demotion was a repudiatory breach of contract and that his stated willingness to leave if suitable settlement terms were agreed did not preclude him from resigning in response to the breach and claiming constructive dismissal.

Facts

The Claimant was employed by Leeds United (the "Club") as "assistant manager". When the Club's manager left in May 2014, the Claimant also expected to lose his post to make way for a new management team, as is common practice in professional football. He declined a new role as "head coach" and the Club initially ordered him to continue working as he had previously done "as per [his] contract". Although the Claimant was willing and able to do this, he signalled his willingness to leave if an acceptable termination package could be agreed.

A deal was not agreed.  Instead, the Club required the Claimant to attend work during the post-season period when players were away (and accordingly there was little work to be done); did not invite him to pre-season training in Italy; issued him with old kit; and subsequently instructed him to have "no contact and/or involvement" with the first team following the new manager's appointment. The Claimant resigned promptly in response to this latter instruction, claiming that by showing they were "not prepared to honour his contract", the Club had committed a repudiatory breach of contract. He brought his claim for constructive dismissal in the High Court.   

Held

The High Court held that the Claimant had been constructively dismissed. By isolating the Claimant from his involvement in the selection, tactics and training of the first team, the Club had demonstrated an intention to refuse to perform his employment contract as it had originally been made. This was repudiatory and the Claimant's justified resignation had clearly been in response to such instructions.

The fact that the Claimant had signalled his willingness to leave if a suitable termination package was agreed was considered irrelevant. Since he had remained willing (and indeed "keen") to fulfil his contractual duties as assistant manager at all material times, he had not himself breached his contract by initiating discussions about possible consensual termination. 

Comment

This decision illustrates that where employees remain willing and able to perform their role until resignation, claims of constructive dismissal cannot be defended on the basis that the employee had floated the possibility of consensual termination on agreed terms. An unhappy employee who initiates such discussions is not, as a rule, in breach of contract and should not be marginalised, isolated or otherwise treated differently as a result of their actions.