The claimants claimed that the respondents breached their contracts of employment by, amongst other things, failing to pay salary increases and discretionary bonuses. They argued that these breaches amounted to a repudiatory breach of contract which entitled them to resign.
The respondent had attempted to condition payment of salary increases and bonuses on acceptance of new employment contracts. However, since the claimants had resigned giving notice the High Court found that they had affirmed their contracts and had confirmed their willingness to accept the new contracts. However, the Court held that the employer then went on to commit serious breaches of the claimants’ contracts. These included making unsubstantiated findings of wrongdoing against them without any investigation as well as reporting them to their regulator without any opportunity to first respond to any misconduct allegations.
Consequently, the fact that the claimants had resigned with notice was immaterial and the post-termination restrictions that the respondent had sought to rely on were no longer enforceable. The claims were successful.
Practical Lessons
The Judge in this case noted that certain acts by an employee may be sufficiently serious to justify an employer dismissing an employee without notice. However, it may well be that the facts of this case make it unique. The Court felt that an investigation into the employee’s conduct was clearly warranted, not least because their alleged conduct was “widely tolerated in other parts of the organisation”. Further, the rash decision to notify the regulator without giving the claimants a chance to explain themselves was criticised.
It shouldn’t be assumed that the absence of an investigation into misconduct allegations will automatically result in a finding of wrongful dismissal and of post-termination restrictions being unenforceable. Whether an investigation is necessary in the circumstances is a judgement call, but a fair and balanced process will at least protect employers more than it will harm them.
https://www.bailii.org/ew/cases/EWHC/QB/2018/2137.html
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