Does an employer have to assert a specific fair reason for dismissal to defend a constructive dismissal claim?

EAT reminds employers and their advisers to be specific.

If an employee resigns and subsequently claims constructive unfair dismissal (by claiming an employer's action caused a fundamental breach to the employment contract), the employer and their advisors need to think carefully about how they defend the claim.

The employer's response to such claims may be a simple 'two line' defence: first by saying that there was no actual dismissal and secondly, if the tribunal find that there was a dismissal, then alternatively the dismissal was for a fair reason (i.e. one of disciplinary, capability or performance, redundancy or 'some other substantial reason').

But what happens to claims if the second line of defence is not specific about which ground the employer is relying on for dismissal? Will it still be valid?

Case details: Upton-Hansen Architects Ltd v Gyftaki

Ms Gyftaki gave short notice to her employer of the need to take additional holiday to attend to family matters. She had already used all of her holiday entitlement. The night before Ms Gyftaki was due to travel, her employers ('UHA') formally denied her request. Ms Gyftaki decided to go anyway and said she would take the time as unpaid leave.

On her return, Ms Gyftaki was suspended and investigated for taking unauthorised holiday. UHA told her that they would also be investigating issues relating to her previous holiday absence.

Before any disciplinary meetings took place Ms Gyftaki resigned and brought a claim for constructive dismissal on the grounds that the act of suspending her and of introducing issues in relation to her previous holiday amounted to fundamental breaches of the implied term of mutual trust and confidence.

At tribunal, UHA's defence was that its actions did not amount to a fundamental breach of contract.  They claimed they had good reasons for suspending Ms Gyftaki in that they feared she would act unprofessionally and create an awkward office environment whilst investigations and disciplinary processes were underway and that issues concerning the previous holiday were relevant to the matter at hand.  

The tribunal agreed with Ms Gyftaki that she had been constructively unfairly dismissed and subsequently awarded unfair and wrongful dismissal damages. UHA appealed on a number of grounds, including that the tribunal had wrongly applied the tests used to determine the reason for dismissal and whether it was fair.

EAT's decision

The EAT upheld the tribunal's findings of unfair dismissal.

UHA argued that the tribunal had not properly considered if the dismissal was for a fair reason (i.e. the 'second line' of defence) and, in particular, referred to a paragraph in its defence pleadings which stated that:

Save as expressly admitted, all the Claimant's claims are denied in their entirety.

The EAT stressed that in constructive dismissal cases the onus is on the employer to establish in the alternative what its specific fair reason for dismissal was. The EAT held that the generic denial referred to above plainly did not do this, nor did the grounds of defence submitted by UHA make clear exactly on what potentially fair ground it was taking action against Ms Gyftaki (i.e. disciplinary, capability and so on).

Comment

This case serves as a reminder to employers and their advisers that they must be specific when outlining a defence to a constructive dismissal claim.

It can be difficult for employers to properly apply the two-line defence, especially if the claimant's initial grounds are themselves vague. However, employers can request further and better particulars of a claim before formulating a full and specific defence.