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Employment Law Cases
Affirmation of contract: grievance procedure
Gordon v J&D Pierce (Contracts) Ltd
For the purposes of a constructive dismissal claim, an employee did not affirm his contract by engaging in his employer’s grievance procedure.
Where an employee waits too long after the employer’s breach of contract before resigning, they may be taken to have ‘affirmed’ the contract (i.e., treat it as continuing) and thereby lose the right to claim constructive dismissal. This case considers whether invoking a grievance procedure can amount to such an affirmation.
The working relationship between Mr Gordon and his manager got progressively worse. This led Mr Gordon to resign and claim unfair constructive dismissal – on the grounds that his employer had breached the implied obligation of trust and confidence. A tribunal dismissed his claim – while his employer had behaved badly in some ways, not all the causes of the breakdown in the working relationship could be attributed to them and Mr Gordon had to bear some of the blame. It also held that by lodging a grievance, Mr Gordon had affirmed his contract and this also disqualified him from bringing the constructive dismissal claim. Mr Gordon appealed.
The appeal was dismissed.
However, the interest in this case lies in the EAT’s consideration of the affirmation issue where the EAT sided with Mr Gordon.
The EAT looked at two Court of Appeal decisions on this issue: Kaur v Leeds Teaching Hospitals and Patel v Folkestone Nursing Home. It preferred the approach in Kaur when the Court of Appeal stated that ‘exercising a right of appeal against what is said to be a seriously unfair disciplinary decision is not likely to be treated as an unequivocal affirmation of the contract’.
Exercising a right of grievance or appeal (or persisting in a grievance or right of appeal) should not be regarded as an affirmation of the contract as a whole. There is no anomaly in holding a contract to be terminated for some purposes but not for others. Grievance or appeal provisions may be regarded as severable from the remainder of the contract and capable of surviving independently even though the remainder of the contract is properly regarded as terminated through breach. If the employee succeeds in having their dismissal overturned or the outcome in some other way enables the employee to resume employment, it is open to the employee to then affirm the other terms of the contract. If the employee resumes employment the right to claim unfair dismissal disappears.
‘Where an employee intimates that he considers the contract has come to an end, he is not to be taken to affirm that the contract has come to an end for all purposes. In particular, I do not consider that the parties can be presumed to intend that a clause designed to procure the resolution of differences should be regarded as being evacuated because one party asserts that the implied obligation of trust and confidence has been breached.’
Link to judgment: https://www.bailii.org/uk/cases/UKEAT/2021/0010_20_1201.html
This is a small but important point especially as an employee can be penalised by the tribunal by up to 25% of their compensation if they fail to raise a grievance with their employer. Some employees are wary of raising a grievance before they resign because of the concern that they will be held to have affirmed the contract. As grievances are intended to try and resolve differences to prevent a resignation, rather than just a tick-box exercise, perhaps a few more matters will now be resolved without having to resort to litigation. This is especially so with constructive dismissal cases which are very difficult to win – despite the popular myth that they are the ‘golden ticket’ for employees.