For those of you that missed last week’s newsletter you can have a browse through it at your leisure here. In it we discussed how Gary Lineker’s tweets might have constituted a protected philosophical belief, the issues caused by a disgruntled ex-employee of Twitter and how daylight savings time can affect your health. Our last case law update looked at how employees are expected to mitigate their losses when bringing a claim to the tribunal. This week we are going to be looking at a claim that was brought against the very organisation that wrote the book on workplace practices and how their failure to train staff on software, caused an employee to bring a successful constructive dismissal claim.

Ms Tracey, the Claimant, was a grade 10 helpline advisor for ACAS, the Respondent, who started in 2013. Shortly after starting employment as a fixed-term employee, she was presented with a contract stating that her employment would terminate after one year. However, Ms Tracey’s employment continued after the expiry of the term stated, having agreed with management that she would continue. An email was sent including a new contract which asked for the document to be signed and returned, which never took place due to a few queries raised which included the number of hours of work and holiday pay. Another contract was sent out after that which reduced the number of days of annual leave Ms Tracey was entitled to, which again was rejected and not signed. Not wanting to press the point too heavily and risk her employment she worked without a new contract for around 3 years.

In early 2018 it became apparent that no leave records could be found. Given the lack of a signed contract, a new employee of the Respondent set about manually reconstructing these records going back to 2013, made even more difficult by the fact that the work was part time during the school term only. Later that year Ms Tracey received a promotion which prompted a discussion around holiday entitlement which was raised to their payroll team. After initially stating that there may have been an overpayment, but they would not seek to recover the money in question. While the fact that there was any overpayment at all was challenged, there was never any response.

The problem came with the use of a new piece of software that was brought in to assist with payroll and the calculation of holiday entitlement. The staff at the time the software was brought in did not know how to properly record these values, so it went unnoticed that inadequate records were being kept until January 2022, when a new member of staff was brought in. At this stage, several questions were brought up as to exactly how much annual leave Ms Tracey was entitled to and how much of said leave had been taken.

Across multiple points in Ms Tracey’s employment the payroll team wrongly suggested that there had been an overpayment and sought to recover it, only for the matter to be challenged again and then go quiet. This culminated in 2021 where the lack of clarity and the issues caused around holiday pay led to an attempted resignation, which was only prevented by a discussion with her line manager stating that the issue would be resolved in January 2022. While draft letters were sent which looked to agree a final amount of holiday pay owed by ACAS, this was never finalised.

Another payroll administrator joined the Respondent and questions as to the Claimant’s annual leave entitlement were raised again, prompting more discussions around how the figure is calculated. While an agreement was almost reached which resolved to draw a line under the previous years and set out in clear terms how much holiday entitlement was due, these were again never finalised. This situation continued for over 5 months, until, following another discussion which showed the Claimant’s manager had still failed to understand the holiday entitlement situation, the Claimant resigned and brought a constructive dismissal claim.

The Tribunal found that, while the simple discussion before the resignation did not, by itself, amount to a repudiatory breach, the situation as a whole caused the Claimant to feel that she was not secure in her position, that the money could be clawed back, and doubts as to the certainty of her position, which was compounded by the numerous questions asked at a fundamental level over the years by different members of staff. While the question, when taken as a singular event, would not amount to a serious breach, the series of questions and discussions, when taken as a whole, amounted to a level sufficient to show a dismissal.

The Tribunal said ACAS had also failed to adequately investigate the matter. It was only after the Claimant resigned that a genuine attempt by the Respondent was made by an experienced member of staff to resolve the situation. However, an uplift for failure to follow the correct procedure was not granted, despite these findings, on the grounds that an amount of money was paid for the untaken annual leave following the resignation, which represented more than the amount that would normally be recoverable due to the time limitations. Together with the opportunities to review and appeal any decisions made in relation to the annual leave, no uplift was awarded. This is a first tier tribunal case and has not been appealed.

The Takeaway Point

This is a good example of the ‘last straw’ doctrine, which states that when deciding a breach of contract in a constructive dismissal situation, it is possible to look at a series of acts which have the cumulative effect of a repudiatory breach, sufficient to cause the employee to resign. The question the Tribunal needs to ask is ‘does the cumulative series of acts taken together amount to a breach of the implied term?’ (The implied term in this situation is that an employer shall now without reasonable and proper cause conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence between employer and employee).

Ironically this case also highlights the risk employers expose themselves to if they do not follow a proper grievance procedure. The Respondent in this case literally wrote the guidebook on grievance procedures. If they can slip up, anyone can! This case also shows the importance of proper record keeping as a proper contractual record of annual leave entitlement, records of initial holiday pay calculations and finalising agreed holiday rules moving forward would have avoided this issue arising altogether.