When defending a claim of constructive dismissal, the EAT held in GC Group Ltd v Young that employers cannot rely on the argument that the tribunal substituted its opinion for that of the reasonable employer, as this only applies to unfair dismissal claims. Constructive dismissal claims, on the other hand, have to be judged objectively by looking solely at whether or not there has been a fundamental breach of contract.
Ms Young brought several claims against her former employer, including one for constructive unfair dismissal, one for holiday pay and notice pay as well as one under the Equality Act 2010.
Dismissing most of the claims, the tribunal found in Ms Young’s favour with regard to the claim for constructive unfair dismissal. It awarded her just over £55,000 made up of a basic award of £8,435.25 and a compensatory award of £46,971.60.
The company appealed on the basis that the tribunal had substituted its opinion for that of the reasonable employer, and that there was no evidence to support its findings in fact.
Dismissing the appeal, the EAT explained that the concept of 'substitution' only applies in unfair dismissal cases, arising generally in circumstances where an employer has decided to dismiss their employee and the reason for the dismissal is a potentially fair one.
At that point, the tribunal has to consider whether the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee. It is only when they come to consider 'the band of reasonable responses' that errors of 'substitution' can potentially arise due to the subjective nature of that question.
Constructive dismissal cases, on the other hand, have to be judged objectively by looking solely at whether or not there has been a fundamental breach of contract. The issue of the “band of reasonable responses” does not, therefore, arise at all in a constructive dismissal case if the sole basis for the employer’s defence is that there was no constructive dismissal.
In this case, therefore, the issue of whether or not the dismissal fell within the band of reasonable responses did not arise as the company denied that there had even been a dismissal.
Even if the employer really meant to argue that the tribunal had not properly considered whether there was 'reasonable and proper cause' for the employer’s conduct for breaching the implied duty of trust and confidence causing Ms Young to resign, that was also an objective test and not one which should be determined by reference to the 'band of reasonable responses'.
With regard to the argument about lack of evidence, the EAT said that, by arguing that there was “no evidence” for certain matters about which the tribunal made clear findings in fact, the company had set such a high standard that it was effectively an allegation of perversity.
However, it had made no attempt to provide the essential component parts of such a ground of appeal. Instead, it had just directed the judge to parts of the evidence that the company itself had put forward and then argued that there was no contrary evidence. The EAT concluded that “such a position could never be a sufficient basis on which to sustain a perversity appeal of the type made here”.
This case reinforces a long-established principle of case law that the question of whether a constructive dismissal has occurred is based on an objective assessment of whether there has been a fundamental breach of contract. The assessment of whether the employer has acted within the 'range of reasonable responses' only applies in cases where the employer has taken the decision to dismiss the employee. As such, the risk of the tribunal substituting their own view for that of the employer cannot arise when assessing whether a resignation is a constructive dismissal.