CONSTRUCTIVE DISMISSAL CLAIM SUCCEEDS IN THE HIGH COURT
The recent case of Gibbs v Leeds United Football Club demonstrates that employers should be wary of removing work duties from disgruntled employees who are still willing to carry out their roles but have said they want to leave the business altogether.
Gibbs was assistant manager at Leeds United football club and had signed a three year fixed-term contract. The club’s manager left part-way through this fixed-term contract and a new manager was brought in. Gibbs experienced difficulties with the new manager and afterwards found that some of his duties involving working with the first team had been taken away. He had discussions with the club’s chairman in which he explained that he was loyal to the previous manager and would be willing to discuss a mutually agreed exit from the club. But the two could not reach a deal and Gibbs made it clear that he was willing to remain at the club and carry on with his role.
Subsequently, the assistant manager received a letter informing him that he was to have no further contact with the first team and would be working only with the under-18 and under-21 football teams in the future. He resigned shortly afterwards and brought a claim in the High Court for the balance of the salary due to him under the fixed-term contract.
Gibbs claimed that his employer had demoted him and that this was a fundamental breach of his employment contract. His employer defended the constructive dismissal claim on the basis that Gibbs had acted opportunistically in resigning in response to the letter about which teams he would be working with because he wanted to leave in any event.
The employer’s argument was unsuccessful. The judge found that Gibbs was willing to uphold his end of the contractual bargain and the fact that he had indicated a willingness to leave the club by mutual agreement was not important. As such, he was entitled to damages for breach of contract, minus any money that he had earned during the remainder of the fixed-term contract period from working elsewhere (employees are required by law to take any reasonable action to minimise the amount of loss they suffer by a breach of their employment contract).
He had in fact found a new role at Tottenham Hotspur football club within the period covered by the remainder of the fixed-term contract and the judge took the unusual decision of placing part of the damages owed to him in a holding account until it was known what level of bonus he would receive in his new role.
Employers need to be careful where employees have become disengaged from their work because undermining them or taking away their responsibilities may well give rise to a claim against the organisation for constructive dismissal unless the employees are actually in breach of contract. An employee saying that he or she is unhappy and wants to leave is not in itself a breach of contract: if it was, a huge number of people would be in breach.
This article was published in People Management in May 2016.