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Claire Best

Bond Pearce LLP

Solicitor

Read more about Claire Best

Legal Insight: How to guard against constructive dismissal claims

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Lord Sugar is as famous for his business success as he is for his “You’re Fired” catchphrase on ‘The Apprentice’. 

Seven series of the popular BBC television show have produced seven winners, but only one still works for him. 
 
However, viewers of the last series will know that the winner no longer takes it all as the prize on offer was an investment of £250,000 to help them start their own company rather than a post working under Lord Sugar himself.
 
Stella English was the lucky contestant to win series six and to scoop a job with one of his companies for a six-figure salary. She reportedly worked initially as a project manager at Viglen providing IT systems to the public sector, before moving to another of his businesses, internet TV provider, YouView
 
But it now transpires that working for Lord Sugar may not have been as sweet an experience for English as it could have been as she recently announced plans to sue him for constructive dismissal.
 
Lord Sugar is alleged to have told her that her contract would end in December, that the business could no longer afford to pay her and that he had already met his obligations to her. Whether English will be successful or not remains to be seen as constructive dismissal claims are notoriously difficult for (ex-)employees to prove.
 
Constructive dismissal occurs when an employee resigns (with or without notice) and can show that they were entitled to do so by virtue of their employer’s conduct. But to succeed in their claim, it would be necessary to establish the following elements:
 
  • That there had been a sufficiently serious repudiatory breach (actual or anticipatory) by their employer of an express or an implied term of their contract. This is a high hurdle to overcome.
  • That the employee accepted the breach, treated their contract as having ended and resigned in response to the breach. Whether they accepted the breach is a question of fact for the employment tribunal to determine.
  • That they have not delayed too long in accepting the employer’s breach. If they delay, it could be seen as evidence that they have accepted it.
 
If a staff member is successful in proving that they were constructively dismissed, it gives rise to a claim for damages for wrongful dismissal. If they have put in the requisite service (currently 12 months), they will also be able to claim unfair dismissal. 
 
Key recommendations
 
Top tips for employers to minimise the risks of facing a constructive dismissal claim include:
 
1. Having effective policies and procedures in place is a good starting point, but ensure that they are kept up-to-date; that managers are adequately trained to implement them; that they are effectively communicated to everyone and that they are correctly implemented and followed.
 
2. Address any employee issues head on without delay and ensure that you are fair and consistent in your approach, particularly in relation to performance management, disciplinary and grievance procedures.
 
3. Communication is key so be honest and open with your personnel and encourage them to act in the same way. Work together to resolve any issues.
 
4. Be fair and reasonable in all situations – as a rule of thumb, treat people as you would like to be treated yourself and you cannot go far wrong.
 
5. If an employee resigns and you have any reason to suspect that a constructive dismissal claim may follow, consider writing to them and offering them the opportunity to reconsider. Ask them to confirm their decision in writing within a couple of days. 
 
If any conduct leading up to the staff member’s resignation could amount to a repudiatory breach or the resignation follows in the wake of a misunderstanding, this is your opportunity to explain the situation, remind the individual that they are a valued employee, invite them to a meeting to talk things through and hopefully head off a claim at the pass. 
 
 
Claire Best, solicitor, and Karen Plumbley-Jones, practice development lawyer at law firm, Bond Pearce LLP.
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Claire Best

Solicitor

Read more from Claire Best
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