When lodging a complaint of unfair constructive dismissal, claimants have to resign promptly in response to a fundamental breach of contract so that they are not deemed to have affirmed their contract. In Humby v Barts NHS Health Trust, the EAT held that demoting Mr Humby to a lower grade was a fundamental breach of an express term of his contract and that his offer to work slightly more than his notice period did not amount to affirmation.
Basic facts
Mr Humby was employed in the post of Clinical Coding Quality Lead for the Trust on Band 6. Following a restructure, Band 6 staff were required to apply for their posts. Although he made multiple applications, all of them were unsuccessful. In the end, he was told that he would be reassigned to a post at Band 5 with effect from 24 February 2020.
He resigned on 23 March 2020 and claimed constructive unfair dismissal (among other things) on the basis that the Trust did not have the unilateral right to change an express term of his contract which also breached the implied term of trust and confidence. Acknowledging the circumstances of the pandemic in his letter of resignation which required “some flexibility either way”, he gave six weeks’ notice.
Tribunal decision
The tribunal dismissed the claim, finding that the Trust was not in breach of contract. Firstly, his previous Band 6 role no longer existed; secondly, he had not been successful in any of his applications; thirdly the Band 5 role offered to him was broadly similar to his previous job and therefore fell within the Trust’s definition of suitable alternative employment; and fourthly his pay was to be protected for 18 months.
Even if it had accepted that there had been a breach of contract, the tribunal held that Mr Humby’s willingness to continue engaging in the restructure process and his preparedness to continue working for the Trust (when he offered to work slightly more than his notice period) meant that he had affirmed his contract and waived the breach. In any event, the Trust had a potentially fair reason for dismissal, being redundancy or some other substantial reason (a business reorganisation).
EAT decision
Upholding the appeal, the EAT found that the tribunal had made a number of mistakes. Firstly, it had focused on whether the implied term of trust and confidence had been breached rather than the express terms in My Humby’s contract. These clearly set out that he was employed as a Band 6 at the relevant rate of pay and given that it was unlikely that there were terms in his contract allowing the Trust to demote him and reduce his pay, the EAT concluded that the Trust had breached Mr Humby’s contract by unilaterally demoting him.
Secondly, the EAT held that the tribunal should have considered that the variation imposed by the Trust constituted a termination of Mr Humby’s contract in its own right, as decided in the case of Hogg v Dover.
Thirdly, the tribunal had been wrong when it found that Mr Humby had affirmed his contract by offering “some flexibility either way” in terms of giving notice. Although that might undermine Mr Humby’s argument that the Trust had breached the implied term of trust and confidence, it could not possibly constitute affirmation, not least because his response to the reassignment was not affirmation but resignation.
Although there might be a potentially fair reason for dismissal, the EAT held that there were too many other errors and therefore remitted the claim to a fresh tribunal for a complete re-hearing.
Comment
This case is a reminder not to overlook a Hogg v Dover type dismissal, meaning that an employee can treat their contract as terminated and bring a claim for unfair dismissal whilst continuing to work under the terms of the new contract imposed by the employer. It can therefore be helpful to employees who are subject to significant changes to their contract of employment but who do not necessarily want to resign.