Reasonably Responsive

Claridge v Daler Rowney Ltd

To succeed in a constructive dismissal claim, employees have to show that their employer fundamentally breached a term of the contract. In Claridge v Daler Rowney Ltd, the Employment Appeal Tribunal (EAT) said that mishandling a grievance did not amount to a fundamental breach unless the employer had acted unreasonably and in a way that was likely to seriously damage or destroy the employment relationship.

Basic facts

On 2 June 2006, the production manager saw Mr Claridge (who had an unblemished record during his 34 years with the firm) leave the production line on more than one occasion.

He asked him to attend a meeting the following Monday at which Mr Claridge thought he had been demoted. He then went off sick with depression. The company was under pressure on the production line and advertised internally for someone to take his place. It was not made clear that this was a temporary appointment.

Mr Claridge then lodged a series of grievances which the company agreed to hear in September 2006. However, because of his continued ill health, he was unable to attend and the meeting did not take place until February the following year. Mr Claridge was finally told in July that his grievance had not been upheld because he had not been demoted.

Mr Claridge resigned on 2 August and claimed constructive dismissal on the basis that his grievance had not been dealt with properly or “in a timely fashion”. The delay in informing him of the outcome of the grievance amounted to a breach of his employer’s duty not to undermine the trust and confidence in their relationship.

Tribunal decision

The tribunal decided that the initial delay (from June to February) in hearing the grievance was not the company’s fault, but that the delay in subsequently informing Mr Claridge of the outcome of his grievance was unacceptable.

Despite that conclusion, the tribunal dismissed his claim. Applying the test set down by the EAT in Abbey National Plc v Fairbrother (weekly LELR 17), it said that the dismissal was fair as it fell within a band of reasonable responses, given the grievance procedure adopted by the company as a whole.

EAT decision

There are two tests that apply in unfair dismissal cases. In constructive dismissal, it used to be a purely objective one to be decided on by the tribunal; in actual dismissal, it is about whether the employer’s conduct fell within the range of reasonable responses open to it.

The EAT in Fairbrother recognized that the two tests could result in different decisions in essentially the same set of circumstances and decided that tribunals should focus on the “range of reasonable responses” test.

This EAT also acknowledged the problem that the two tests posed, but had reservations about the conclusions in Fairbrother, saying that it effectively gave employers a free hand to act unreasonably.

Instead, it said that tribunals must be satisfied that the employer’s conduct was “calculated to destroy or seriously damage” the employment relationship. It also made clear that employees should not be able to satisfy that test unless the employer’s behaviour fell outside the range of reasonable responses.

In constructive dismissal cases, the EAT concluded that if a tribunal thinks the employer’s conduct could fall within the “range of reasonable responses” test, then the employee cannot satisfy the requirement to show a fundamental breach.

Using that approach, the EAT decided in this case that the company acted reasonably throughout the process (as other reasonable employers would have acted in the same way), and Mr Claridge’s claim could not, therefore, succeed. This was not to say the grievance could not have been handled better, but simply that the company had behaved in a way that another reasonable employer might well have behaved.