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Can an employee resign in response to the employer’s conduct and claim constructive unfair dismissal if they have committed gross misconduct or breached their contract of employment? The Employment Appeal Tribunal considered this point in Atkinson v Community Gateway Association, holding that the employee does not give up their right to resign just because they have breached the contract themselves.

The facts in Atkinson

Mr Atkinson was employed by Gateway, a housing association, as Director of Resources. At one point, he accepted sole responsibility for a £1.8 million overspend, although he later sought to pass the responsibility on to others. Mr Atkinson also sent from his work email address emails that were highly personal and overtly sexual in nature to his lover, who worked at another housing association. Later, Mr Atkinson encouraged his lover to apply for a job with Gateway, providing her with detailed advice on the selection process she would face and suggesting to a member of the interview panel that she should be offered the job.

Disciplinary procedure

Gateway began a disciplinary process which might well have reasonably ended with Mr Atkinson being dismissed for gross misconduct. However, Mr Atkinson tendered his resignation ostensibly partly in response to Gateway’s conduct of the disciplinary process. He brought a claim for constructive unfair dismissal along with automatic unfair constructive dismissal related to whistleblowing and breach of his human rights because Gateway had read his emails.

The law says that employees can resign and claim constructive dismissal in response to their employer’s breach of the contract of employment, providing they do not delay unduly or otherwise indicate that they are prepared to remain an employee.

However, the courts have held outside the employment sphere that, where one party commits a fundamental breach of contract, they are not entitled to pursue a claim against the other party in relation to any breach that follows. Colloquially, it could be said that you have to keep your side of the bargain before you can complain about something someone else has done (or not done).

If this applied at work, it would mean that an employee would lose their right to claim constructive dismissal if they had, for instance, committed an act of gross misconduct.

Employment Tribunal decisions

The Employment Tribunal struck out the claim for constructive dismissal part way through the hearing, holding that Mr Atkinson’s conduct amounted to a fundamental breach of contract and he had therefore lost the right to bring the claim.

The tribunal also struck out the whistleblowing claim and found there was no breach of Mr Atkinson’s human rights in the circumstances.

Employment Appeal Tribunal

Mr Atkinson appealed against the judgment.

The EAT overturned the decision to strike out the constructive dismissal claim, following the Court of Session’s decision in McNeill v Aberdeen City Council. The EAT said that an employee who might be dismissed for gross misconduct can still resign in response to the employer’s breach, in particular where the employer is not aware of the employee’s breach. However, the misconduct will be relevant to remedy and could result in a reduction in compensation.

The EAT confirmed that the employer had not breached Mr Atkinson’s ECHR article 8 right to respect for his private life and correspondence by reviewing personal emails of a sexual nature sent from work.

The EAT also held that the Tribunal was wrong to strike out a claim for detriment relating to a protected disclosure on the basis that the employer could not be vicariously liable for its employees’ conduct in subjecting the claimant to a detriment. The law on this has now changed to make clear that employers can be held liable for detriments that an employee is subjected to by colleagues because they have whistleblown.

In light of the appeal findings, it was an error of law to strike out the claim without hearing all the evidence. That step should only be taken in rare cases.

Guidance for employers

This case confirms the importance of an employer properly conducting a disciplinary investigation. Employers should bear in mind that if they act in an oppressive way when dealing with allegations of misconduct, the employee will have the right to resign and claim constructive dismissal.

It will then be up to the employer to try and argue that the employee’s dismissal would have been inevitable, had the disciplinary process been completed, to persuade the tribunal that dismissal was not unfair or that no or less compensation should be awarded.

Employers may take some comfort from the judgment, in that it has been confirmed that there is no general right to privacy in work emails. Therefore, inappropriate email content may be reviewed without employee consent. However, taking action in relation to private email correspondence will always be safer if the employer has put in place an email policy beforehand and employers should not, as a matter of course, be reviewing personal emails sent from work without good reason.

To discuss how the issues in this case affect your business or constructive unfair dismissal in general, please contact David Leslie in our Employment Law team on 0113 368 7804 or email [email protected]