According to a recent decision of the Employment Appeal Tribunal, it is still possible to bring a constructive dismissal claim even if, unknown to the employer, the employee is in serious breach of contract at the point of resignation.

Doubts had been expressed in some legal quarters as to whether it was possible for one party to an employment contract to rely on the other’s fundamental breach to bring the contract to an end, even if they had already committed such a breach themselves. After reviewing recent case law the EAT has said that such doubts are misplaced. 

In this case a senior housing association employee resigned following the launch of disciplinary proceedings against him, claiming that they were a response to a whistleblowing complaint he had made. However after his resignation his employer discovered that he was in significant breach of its e-mail policy – which the claimant was in fact responsible for drafting and enforcing. He had used the association’s e-mail system to send intimate e-mails to his lover, and had also disclosed information to her about his employer’s business. That included helping her secure a job offer without revealing his links with her to his employer.

The employment tribunal took the unusual step of dismissing the claim before the respondent’s witnesses had been called. The tribunal thought that even putting his case at its highest, the claimant was in no position to bring a constructive dismissal claim when he himself was in such serious breach of contract.

The EAT has said that this reasoning was an error of law. Backed up by a recent decision from the Court of Session, it said even the most serious misconduct had no effect on the subsistence of the contract of employment until “accepted” by the other party as bringing it to an end. As one old-style judge had put it in the past: “an unaccepted repudiation is a thing writ in water”.

That meant that the employment tribunal should not have dismissed the claim on the basis that it could not possibly succeed. Whether it would be wise for a claimant in that position to bring an unfair dismissal claim is another matter. In such a situation an employment tribunal would be likely to make a significant deduction from the compensation that would otherwise have been awarded, on the basis that the employee could have been fairly dismissed in pretty short order had they not got their resignation in first.