297: Constructive Dismissal: EAT rules raising a grievance does not amount to affirmation of contract

An employee who waits too long before resigning after an employer has breached their contract of employment may be taken to have affirmed their contract, thereby losing the right to claim constructive dismissal. In the recent case of Gordon v J & D Pierce (Contracts) Ltd, the Employment Appeal Tribunal (EAT) considered whether an employee had affirmed his contract by engaging in the employer’s grievance procedure.

Mr Gordon raised a grievance in relation to alleged bullying by his manager and disagreements over disciplinary issues. He subsequently resigned and claimed unfair constructive dismissal on the grounds that his employer had breached the implied duty of trust and confidence, relying on the incidents that were the subject of his grievance.

The Employment Tribunal held that there was no fundamental breach of contract by the company allowing Mr Gordon to treat himself as constructively dismissed. It also held that in any event, by lodging a grievance, Mr Gordon had waived the potential breaches and affirmed his contract of employment. By continuing to seek internal resolution of the dispute, he had missed his chance to claim constructive dismissal claim. Mr Gordon appealed.

Mr Gordon’s appeal was rejected on several grounds but the point of interest in this case is the EAT’s ruling that Mr Gordon had not affirmed his contract simply by engaging in the grievance process. A contract can be terminated for some purposes, but not others. Even where an employee believes that their contract of employment is terminated, any provisions relating to the resolution of disputes can therefore continue.

The EAT’s judgment means that grievance or appeal procedures can be treated as severable from the rest of the employment contract and can continue even if the rest of the contract is terminated. This is an important point for employees, since it means that they can resign and claim constructive dismissal whilst still attempting to resolve the dispute through the grievance procedure. Hopefully this will also mean that more cases are resolved without resorting to legal action.