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Suspension for alleged misconduct may be a breach of contract

In the recent case of Agoreyo v. London Borough of Lambeth [2017] EWHC 2019 (QB), the High Court has held that suspension as a "knee-jerk" reaction to an allegation of misconduct may in itself be sufficient to breach the implied contractual term of trust and confidence.
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Suspension for alleged misconduct may be a breach of contract

Dr Eva Carneiro – happy ever after in the “tale of two employees”?

Dr Eva Carneiro, the former Chelsea first team doctor, who brought employment tribunal claims of constructive dismissal and sex discrimination against Chelsea and Jose Mourinho (respectively), is understood to have settled her claims for a confidential sum.

The claims settled on day two of the two-week trial, a day on which Dr Carneiro was due to give evidence. In opening submissions given on the first day of the hearing, Chelsea sought to portray Dr Carneiro as publicity hungry, self promoting and money grabbing. It highlighted that Dr Carneiro had already rejected an offer of £1.2 million to settle her claims. It also said that she could not expect to achieve those sums even if she was successful at tribunal. In their opening submissions, Dr Carneiro’s legal team told the tale of the “good employee” who was forced out of “the job of her dreams”, berated, sexually harassed and demoted, by the “bad employee”. They also placed blame firmly with Chelsea, who they said confirmed Dr Carneiro’s demotion and told her to “build bridges” with Mourinho, rather than looking into Mourinho’s conduct.

To succeed with a constructive dismissal claim Dr Carneiro would have needed to show a fundamental breach of her employment contract entitling her to resign and treat herself as dismissed. As well as focusing on the acts and omissions of Chelsea as her employer, Dr Carneiro’s legal team would have undoubtedly argued that Chelsea should have been held vicariously responsible for the acts of Jose Mourinho. These may have included Dr Carneiro’s well publicised allegations that Jose Mourinho called her a “daughter of a whore” in Portuguese.

In support of her claims of sex discrimination and harassment (and in addition to the above statement allegedly made by Jose Mourinho), Dr Carneiro was said to have been relying on a series of “sexist and derogatory” emails and text messages between Jose Mourinho and his backroom staff.

The cap on compensatory awards in unfair dismissal claims is currently £78,962 or 52 weeks’ pay if this is lower. While discrimination complaints are not capped, Dr Carneiro may have recovered more under the terms of a settlement than she would have been awarded at tribunal, had she succeeded with her claims.

Dr Carneiro is said to be relieved that she can now move forward with her life. No doubt Chelsea and Jose Mourinho (who was due to give evidence next week) are also feeling some sense of relief, if only about avoiding further bad press which has surrounded the case.

Dr Eva Carneiro – happy ever after in the “tale of two employees”?

Louis van Gaal 0, Jose Mourinho 1

Louis van Gaal’s red reign is over as Manchester United Football Club have dismissed the manager from his position. Van Gaal leaves after completing two years of a three-year contract. It appears that Manchester United have based their decision on Van Gaal’s capability to perform in the role. The scores on the doors are as follows:

  • Manchester United achieved their lowest goals total for 26 years with only 49 Premier League goals this season, only one more than Blackburn achieved in 2012 when they were relegated;
  • they conceded 35 goals this season, which was the joint-lowest tally in the league with Tottenham; and
  • the team made the most backward passes in the league, 3,222 to be precise.

Though Van Gaal led the team to victory with an FA Cup win last weekend, it appears that the disappointing results preceding this success warrant the decision to end his contract.

If a fixed-term contract does not allow for early termination, an employer can only end the contract early if the employee has committed a repudiatory breach of contract. In the absence of such a breach, if the contract does not include notice provisions and an employer terminates it early, the employee can claim damages for loss of earnings for the remainder of the term without the need to mitigate his or her loss. It is therefore advisable for an employer to include, in a fixed-term contract, the right to terminate the agreement early such as, in this case, for poor performance.

Van Gaal is rumoured to be on a guaranteed basic salary of £3.3 million a year. The termination provisions in his contract provide for two-thirds of his salary (including image rights and a loyalty payment) to be paid until June 2017 unless he finds alternative employment, and around £5 million if the club dismisses him at the end of this season. Generally, parties involved in settlement discussions agree to have a continuing duty of confidentiality relating to the negotiations and the agreement they reach. However, due to the high profile nature of this matter, it may be difficult to keep the details of this agreement confidential.

There is speculation that Jose Mourinho will succeed Van Gaal as manager at Manchester United. Ryan Giggs, assistant manager at the club, has previously suggested that he will sever ties with Manchester United if they do not offer him the managerial position. It is reported that Mourinho is likely to bring Rui Faria with him as assistant manager, which may mean an effective demotion for Giggs if he decides to stay at the club.

In the recent case of Gibbs v. Leeds United Football Club [2016], Gibbs was an assistant manager who declined the managerial post when the manager he worked with was dismissed. He continued in his role whilst negotiating a consensual departure. However, Leeds United Football Club excluded him from many of his usual responsibilities and he was denied contact with the first team. He resigned as a result. The High Court held that the fact he was prepared to leave if suitable terms were agreed did not bar him from bringing a constructive dismissal claim. Whilst the facts differ slightly, this decision highlights that Giggs is free to negotiate a termination package with the club without hampering a future claim for constructive dismissal should he resign in response to an effective demotion following Mourinho’s appointment. To succeed with a claim for constructive dismissal, Giggs would have to show that he was entitled to resign by virtue of Manchester United’s conduct, namely a repudiatory breach of contract.

Louis van Gaal 0, Jose Mourinho 1

Bored out of job

A Frenchman has hit the headlines for taking his former employer, Interparfums, to court after having an existential crisis because his job is too boring. Is this a joke? Non.

The term “burn out”, when employees collapse due to overwork and stress, is well known. However, this individual has accused his employer of something much worse – being bored. Or as the French press are calling it, “bore out”.

The claimant states that working for his employer was “a descent into hell” as he was given so little to do that he suffered from critical depression and became ashamed of being paid for doing nothing. Many people would say, “c’est bien” to being paid for doing minimal work. However, this individual has brought a claim for constructive dismissal and is seeking £282,000 in compensation and damages for suffering the insipidness of mind-numbingly dull tasks over a four-year period.

The main legal argument being pursued by the claimant’s lawyers is that he was intentionally side lined so that he would have no chance of promotion and become so bored that they could fire him without redundancy payments or any other compensation.

In the UK, to succeed with a claim for constructive dismissal, the employee must show that they were entitled to resign by virtue of an employer’s conduct. Essentially, there has got to be a repudiatory breach of contract on the part of the employer which is sufficiently serious to justify the employee resigning. Whether the French courts will sympathise with the claimant’s case, who knows, à suivre!

Bored out of job