Is it right that an employee who has secretly been breaching his employment contract can claim constructive dismissal? Yes, says the Employment Appeal Tribunal (EAT) in the case of Atkinson v Community Gateway Association (UK EAT/0457/12/BA)

An executive resigned and claimed constructive dismissal following the way his employer handled a disciplinary investigation into his part in an overspend of £1.8 million. Only after the executive resigned was it discovered that he had been sending sexual messages on his work email to his lover. He then coached this person in her application for a job with his employer. The employer claimed that such gross misconduct, which was unknown to them at the time, prevented the employee from making a valid claim of constructive dismissal. The employer relied on the common view that such misconduct had already destroyed the employment relationship.

The EAT stated that constructive dismissal is about the law of contract and involves a straightforward question about breach. A contract is not over until the wronged party has ‘accepted’ the breach and acted on it. This is so even if the employer does not know about the misconduct. If a wronged employer has not acted on the employee’s breach, namely his gross misconduct, and has not terminated the employment contract through a dismissal, then the employment relationship remains alive. Otherwise, the moment an employee was in breach of contract, rather than following a fair and proper disciplinary process, the employer would be entitled to behave however it wished.

The case is not all favourable to employees. When their gross misconduct is only discovered at a later date, damages for constructive dismissal can be reduced, possibly by up to 100%, on the basis that they would have been dismissed in any event.