A recent Employment Appeal Tribunal (EAT) decision confirms that an employee’s delay in resigning after a potential breach does not automatically mean they have accepted the situation or affirmed their contract. For employers, the key point is that even a lengthy period of silence or inactivity may not remove the risk of a constructive dismissal claim, particularly where the employee is off sick, disputing the breach or seeking to resolve matters. This article looks at the case and the practical implications.
Background
In constructive dismissal claims, an employee needs to show their employer committed a fundamental breach of contract and that they resigned in response to that breach. Crucially, the employee must not have accepted the employer’s breach through their conduct. Actions such as willingly continuing to work, accepting pay without protest, or behaving as if the employment relationship remains intact, may later be viewed by a tribunal as affirming the contract and, in other words, allowing it to continue. If the employee affirms the contract, any claim for constructive dismissal will generally fail.
Case facts
Dr Barry, a GP, was diagnosed with an auto-immune disorder, which led to her taking extended periods of sickness absence. In August 2020, the GP practice at which she worked notified her that she would not be entitled to any further contractual sick pay. Dr Barry argued that this was a breach of her contractual sick pay terms and a breach of the implied term of trust and confidence. Her trade union representative attempted to negotiate payment of full sick pay on her behalf.
In December 2020, she told the practice she was fit to return to work, but she refused to do so until the sick pay issue was resolved. In February 2021, the practice manager informed Dr Barry’s trade union representative that she was owed around £9,000 in sick pay but, on 26 March 2021, a senior partner told Dr Barry that she would not receive any further sick pay. She resigned on 6 April 2021 and brought a constructive dismissal claim.
The ET accepted that the practice had committed a breach by withholding sick pay, but it dismissed her claim on the basis that she had affirmed her contract by delaying her resignation. The ET focused on the fact she was first told she would not be entitled to further sick pay back in August 2020 but did not resign until April 2021. Dr Barry appealed.
EAT’s decision
The EAT overturned the ET’s decision. It found that Dr Barry’s actions did not amount to her affirming her contract. Instead, she was actively seeking to resolve the dispute and, as recently as February 2021, the practice had indicated she was entitled to backdated sick pay. The EAT confirmed that delay alone does not establish affirmation, especially if the employee is absent due to sickness, seeking to find a resolution or clearly continuing to work under protest.
The EAT therefore held that Dr Barry had not affirmed her contract and upheld her claim for constructive dismissal.
Key takeaways for employers
The EAT’s decision reinforces that an employee’s delay in resigning after an alleged breach does not necessarily mean that they have affirmed their contract. Instead, consider the employee’s wider conduct, including whether they are off sick, challenging the breach or seeking a resolution. Silence or continued absence does not mean the employee has accepted the situation. Avoid assuming that risk has fallen away simply because time has passed. Where there is a dispute over contractual entitlements, maintain clear communication and seek to resolve the issue quickly to reduce the risk of a later constructive dismissal claim.
