The claimant was the company that employed the defendant in February 2015.  He was employed as a broker.   The defendant resigned summarily on 11th November 2019 and the court found at that time he had engaged in negotiations with other financial services businesses about joining them instead. The claimant brought the claim relating to the employment contract arguing that the defendant had breached the requirement to give six months’ written notice and that they were treating the resignation as an intention to end the agreement in six months’ time.  On foot of this, they then sought an order invoking a term of the employment contract that stopped the defendant from working for any other third party whilst employed with the claimant.   There were then post-termination restrictive covenants that the claimant wanted to enforce that would then stop the defendant from working with a competitor for another six months after he officially leaves his employment.  It must also be noted that the claimant brought an action for damages relating to the estimated loss of profits of £396,000.

The defendant stated that his resignation was effective in law by way of constructive dismissal as the course of conduct entered into by the claimant was such that it broke the implied term of trust and confidence. This especially related to the alleged ‘brushing off’ of a grievance the defendant attempted to raise in October 2019.   On the point of constructive dismissal, this was dismissed by the Judge citing that there was no repudiatory breach of the contract by the claimant.   There was an interesting assertion made on the use of ‘constructive dismissal’ as a defence as outlined by Jack J in Tullett Prebon Plc v BGC Brokers and whether the standard is weakened when compared to using constructive dismissal as a claim in the Tribunal.  In this case, it was held that it did not strictly apply as the defendant had not borne out the claim of a repudiatory breach.

On the claim of breach of contract and the notice period it was held that there was then a breach of the notice period clause.  Therefore, there was an order stating that the defendant would continue as an employee until the end of the notice period, which would then be 11th May 2020.   On foot of this, the claimant was able to ensure that the defendant could not accept employment with any third party whilst he was still their employee.   Furthermore, this then, in essence, delayed the effect of the non-compete clause in the defendant’s contract.  It would only start running from 11th May 2020 and would then end on 11th November 2020.  This would be the point at which he would then be able to take up work with a third party.  The Judge sought further submissions on the issue of damages.

Practical Lessons

This case demonstrates the counter to an assertion of constructive dismissal in that, by its very nature, it will also be contrary to the employee’s obligation under the contract to give notice.   The decision of Jon Turner QC here is an indication and clarification of the rights that the employer has in such a situation.   On that basis, where the employee attempts to resign summarily but the real reason is to take up another position this may give much needed ammunition to the employer to protect their position and ultimately their business from unwanted competition.
https://www.bailii.org/ew/cases/EWHC/QB/2020/1008.html