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Employment Law Cases
Constructive dismissal: acceptance of breach
Chemcem Scotland Ltd v Ure
An employee’s failure to return to work after her maternity leave amounted to acceptance of a repudiatory breach for the purposes of an unfair constructive dismissal claim.
There are various ways in which an employer might breach a contract of employment. One of them is a repudiatory, or fundamental breach, by the employer which justifies the employee resigning. Where the employer commits such a fundamental or repudiatory breach (e.g. reducing pay without consent), various options are open to the employee. He or she may waive the breach and treat the contract as continuing; work on under protest and sue for damages; or accept the breach and resign (often followed by a claim for unfair constructive dismissal). A contract of employment is however not terminated automatically by the employer’s breach – the employee must ‘accept’ the breach. This case concerns what amounts to an acceptance of such a breach of contract by an employee.
While Ms Ure was on maternity leave her employer committed various repudiatory breaches which the tribunal held amounted to a breach of the term of trust and confidence and entitled her to resign. The employer’s actions included varying her pay without warning, switching her to a different payroll, failing to pay her SMP on time, failing to answer her queries about her pay entitlement and misleading her as to the true position. The situation was complicated by the fact that these breaches were committed by Ms Ure’s father, the majority shareholder, who had left Ms Ure’s mother and formed a relationship with another member of staff. The tribunal also held that her failure to return to work amounted to a communication of her decision not to return, even though she’d said nothing to her employer.
Her employer appealed, arguing that Ms Ure had failed to communicate her acceptance of its repudiatory acts and, in the absence of such a communication, there could not as a matter of law be a termination of contract.
The appeal was dismissed.
While in normal circumstances, Ms Ure’s failure to appear might not carry the implication that she had accepted her employer’s breaches, in this case ‘it plainly could’. It was a matter for the tribunal as a finder of fact to judge whether her non-appearance amounted to an acceptance of the repudiatory acts. The employer had not challenged the factual basis of the tribunal’s conclusions which were that Ms Ure had not returned to work because of her father’s treatment of her. Her father knew that if she returned to work his new partner would come under Ms Ure’s management and he did not want that to happen. What’s more, when Ms Ure didn’t return, no-one got in contact with her to ask why not. The particular circumstances demonstrated the true position’ and there was no need for an express communication by Ms Ure of acceptance.
Link to judgment: https://www.bailii.org/uk/cases/UKEAT/2020/0036_19_1808.html
This decision was very much one on its own facts and, as the EAT stated, a simple failure to appear at work might not normally imply an acceptance of an employer’s repudiatory breach of contract.
For employers faced with an employee simply not returning to work (either after maternity leave or when there is any type of absence) it will usually be wise to communicate with that employee to establish the reasons for their absence and get them to confirm these in writing. There could be any number of reasons for an absence - with resignation likely to be the most extreme of those. This is also recommended as a good management practice generally.