Welcome back, to your weekly case law update. Last week we had three cases for you covering Early Conciliation, sexual orientation discrimination and gross misconduct. We also had a piece on the recent British cycling allegations concerning discrimination and harassment.
Can a perceived demotion amount to breach of contract?
This week’s case is about constructive dismissal and the Respondent, Leeds United, have recently been involved in another high profile court case for sex discrimination. Anyone who is familiar with Leeds will know they have a difficult owner, Massimo Cellino, whose lackadaisical attitude towards firing employees means there is a high turnover of staff, and, inevitably, tribunal claims.
Mr Gibbs, the Claimant, was the Assistant Manager of the Respondent. He had no detailed job description in his contract. He had a three year contract but after around eight months of employment the Respondent was bought by Mr Cellino. The Respondent, looking to recruit their own management, agreed with the Claimant’s manager to end the manager’s contract early and the Claimant expected something similar to happen to him.
The Respondent brought in a new manager and assistant manager but the Claimant was not offered a settlement package. In a meeting with the owner, the Claimant said if there was no work for him then he would be happy to end his contract early if a settlement package could be agreed.
No such deal was agreed and the Claimant reported to work under the new manager. The new manager and the Claimant did not get on and the Claimant was informed by email that his role had been altered to train the Respondent’s youth players instead of its first team. The Claimant felt this was a demotion and a slight on his abilities so promptly resigned.
Rather bizarrely the Claimant was then offered the role of manager four months later, after his predecessor had been dismissed. The Claimant refused, citing his previous treatment by the Respondent and how that treatment had undermined his relationship with staff he managed.
The Claimant sought a breach of contract constructive dismissal claim. The court held that the Respondent’s email changing the Claimant’s role amounted to a breach of contract, making the dismissal a breach of contract. The court also added that the Claimant’s suggestion of a settlement agreement was not relevant because he was happy to stay if a sum could not be agreed.
Interestingly it also held that the Claimant rejecting the Respondent’s offer to return four months later did not mean he had failed to mitigate his losses, it found that the Claimant’s position would have been untenable due to the Respondent’s previous conduct.
The lesson for employers is that a change in job role can amount to a breach of contract. In this case the new role was so far removed from the initial role it amounted to a breach, despite the fact that his salary and other terms did not change. Any form of demotion, even if only perceived, can be a breach of contract and therefore amount to constructive dismissal.
If you enjoyed this article please read our other cases concerning football teams.