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Legal Insight: How to prevent grievances from becoming constructive dismissal claims

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31st Aug 2012
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In the recent case of Assamoi v Spirit Pub Company (Services) Ltd, it became clear that resolving an employee’s grievance quickly in their favour could prevent a manager’s conduct from escalating into a fundamental breach of contract - and ending up in defeat in a constructive dismissal claim.

It also reminded employers that once they have committed a fundamental breach of contract, that conduct can never be ‘cured’, which is highly significant. Let me explain:   In the case of Assamoi v. Spirit Pub Company (Services) Ltd, the Employment Appeal Tribunal ruled that the company’s act of upholding an employee’s grievance about his immediate manager prevented it from breaching implied terms of trust and confidence.   As a result, taking such action meant that the employee did not have sufficient grounds to make a claim for constructive dismissal.   The facts of the matter   Assamoi (‘A’) worked as a chef in a group that ran various pubs. He had a turbulent job history, which included receiving a final written warning for taking unauthorised holiday.   Matters came to a head in December 2009 after A booked holiday leave. His immediate manager, Mr Cooper, agreed to A taking the holiday as long as there was sufficient cover during the period of his absence.   While A was on holiday, however, Cooper found that food service was very slow and discovered that one of the employees covering for A was working alone in the kitchen.   While A was on holiday, Cooper summoned A and two covering employees to a team meeting, which was scheduled for a date that A was still on holiday. He also threatened to take disciplinary action against any employee who failed to attend.   None of the employees attended the meeting. A was subsequently suspended on full pay from 8 December 2009 (when he was still on holiday), pending an investigation into allegations that he had failed to attend work and had refused to attend the meeting.   An investigation took place. It was found that A had been on agreed holiday when he was required to attend the meeting. Therefore, it was decided that no action should be taken against him.  A subsequently raised a grievance against the treatment that he had received from Cooper. The grievance was investigated, with the outcome being that the suspension would not be noted on his personnel file.  Trust and confidence  Following A’s return to work, he attended meetings with a general manager and Cooper. Among other things, A was given a copy of a new contract, which incorporated his title as kitchen team leader, although his terms and conditions otherwise remained unchanged.   A refused to sign the new contract because he alleged that he was being demoted and that his hours were being reduced. A sought an apology from Cooper, but it was refused. A was offered the alternatives of signing the contract and returning to work, transferring to another site or resigning. He decided not to sign the contract.   Instead A resigned, claiming that he had been constructively dismissed because of the treatment that he had received from his manager and because he was now being asked to sign a new contract that he believed was less favourable to him.   But the employment tribunal held that A had not been constructively dismissed as the company had, in investigating the treatment that he had received from Cooper and by upholding his grievance, prevented those actions from seriously damaging a relationship of trust and confidence. A appealed.   The EAT dismissed the appeal, however. It ruled that, although Cooper had behaved badly towards A, his behaviour was not so serious as to destroy the trust and confidence between the parties concerned.   It also found that the fair-minded way in which the investigation meeting proceeded was such that it prevented the matter from escalating into a situation that would have justified A leaving and claiming that he was constructively dismissed.   Practical impact   This case demonstrates that there is a fine line between an employer preventing a breach of contract from occurring and having committed a breach of contract that is sufficient to sustain a constructive dismissal claim.   The Employment Tribunal took the view that, because the Spirit Pub Co investigated A’s complaint and subsequently upheld his grievance, it prevented his manager’s “inappropriate and over-reactive behaviour” from becoming a serious breach of contract.   If the manager’s conduct had escalated and the employer had not acted to address A’s protest, such conduct may well have amounted to a serious breach of contract.   As a result, this decision serves as a warning to employers that they should take employees’ grievances seriously by investigating them thoroughly. They should also be open to overturning erroneous managerial decisions.   Furthermore, once conduct amounts to a fundamental breach of contract, it can never be ‘cured’ by the employer. So by strictly following grievance procedures, employers will be in a better position to avert constructive dismissal and discrimination claims. 

Anthony Thompson is head of employment at law firm, Curry Popeck. His Twitter address is

@athompsonlaw.

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