Friday 9 March 2012

How to avoid constructive dismissal claims

Lord Sugar is as famous for his business success as he is for his “You’re Fired” catchphrase, but after seven series of ‘The Apprentice’ producing seven winners, only one still works for him.
Claire Best and Karen Plumbley-Jones of Bond Pearce recently wrote in HRZone.co.uk about Stella English, the winner of series six, who recently announced plans to sue Lord Sugar for constructive dismissal.
In a move that could result in a swathe of constructive dismissal cases, Lord Sugar is alleged to have told her that her contract would end in December and that he had already met his obligations to her.
Top tips to minimise claims
1. Have effective policies and procedures in place and ensure managers implement and communicate them
2. Address employee issues head on without delay and ensure that you are fair and consistent in your approach
3. Communication is key - be honest and open with your personnel and encourage them to act in the same way
4. Be fair and reasonable in all situations - as a rule of thumb, treat people as you would like to be treated yourself
5. Offer leavers an opportunity to reconsider.
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.
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 is a solicitor and Karen Plumbley-Jones is a practice development lawyer at law firm Bond Pearce.

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