In order to claim constructive unfair dismissal successfully, claimants have to show that there has been a fundamental breach of their contract and that they did not affirm (or waive) that breach. In Gordon v J&D Pierce (Contracts) Ltd, the Employment Appeal Tribunal (EAT) held that lodging a grievance does not amount to affirmation of a breach of contract.

Basic facts

Mr Gordon had a poor working relationship with his manager, Mr Pierce, leading him to lodge a grievance.

However, the relationship deteriorated to such a point that he resigned and claimed he had been constructively dismissed on the basis that the company had breached the implied obligation of trust and confidence.

Tribunal decision 

In dismissing the claim, the tribunal decided that there had been fault on both sides. This included Mr Gordon’s refusal to attend a directors’ meeting and complaints he levelled against his employer which were not their responsibility. Equally, they failed to tell him they were recruiting someone else to a role that was similar to his (although the appointment could be justified at a business level). The employer’s conduct could not therefore be said to amount to a fundamental breach of the implied obligation of trust and confidence.

However, even if there had been a fundamental breach of contract that entitled Mr Gordon to resign, he could not rely on that breach because he had affirmed the contract by engaging in the grievance procedure (a contractual term). As such, Mr Gordon had forfeited his right to rely on breach of the implied term of trust and confidence by taking a grievance which, in and of itself, affirmed that the contract was continuing.

Mr Gordon appealed on a number of grounds including that the tribunal had erred in law in finding that there had been no fundamental breach of contract and that he had affirmed the contract by exercising his contractual right to lodge a grievance.

EAT decision

The EAT dismissed his appeal holding that the tribunal had not erred in law in finding that there was no fundamental breach of contract. Although it was not necessary to consider the point it agreed with Mr Gordon’s point on affirmation.

Based on the decision by the Court of Appeal in Kaur v Leeds Teaching Hospitals NHS Trust (weekly LELR 579), the EAT rejected the position taken by the Court of Appeal in Patel v Folkestone Nursing Home (weekly LELR 589) that a successful appeal revives the contract, meaning that the employee loses the right to treat the contract as having come to an end. Instead, it considered that “[a] contract is a bundle of obligations. Some are mutually interdependent. Some serve distinct and severable purposes.”

As such, grievance or appeal provisions may be regarded as separate from the rest of the contract and can survive independently even though the employee considers that the remainder of that contract has been terminated through a breach by their employer.

In the EAT’s view, where an employee relies on one contractual right (here the right to lodge a grievance) it does not necessarily mean that they have affirmed the contract as a whole. In particular, the EAT considered that it would be unsatisfactory if an employee was unable to accept a repudiatory breach by the employer because they wished to seek a resolution by means of a grievance procedure.