Constructive dismissal settlements: the correct test

Employers often offer settlement agreements where they feel that an employee may bring a claim for constructive dismissal.

In Nottinghamshire County Council v Miekle the Court of Appeal held that if the repudiatory breach of contract ‘played a part in the dismissal.’ then this was sufficient to establish constructive dismissal.

In the later case of Wright v North Ayrshire Council the Employment Tribunal held that the ‘effective cause’ of the dismissal was the need for the employee to care for her recently debilitated husband, rather than the employers failure to address the employee’s grievances.

At appeal the EAT held that the ET had misinterpreted Miekle and the conduct was required to be ‘an’ effective cause rather than ‘the’ effective cause. Furthermore, there was no requirement that it was the most important cause. The dismissal was therefore unfair but, the role played by the various ‘causes’ will be taken into account when calculating the compensatory award.

This decision indicates that if an employee intends to resign if they suffer a repudiatory breach at the hands of their employer then providing that breach is ‘an’ effective cause then the employee may be successful in his/her claim for constructive dismissal.

That said, constructive dismissal cases remain difficult for employees to win and advice should be sought if employees are considering bringing such a claim with or without the offer of a settlement agreement.

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