The claimant worked for the respondent from January 2009 until he resigned in June 2018.   The dispute arose after the claimant had given three months’ notice to leave the business in May 2018.   He had given thanks for the opportunities but stated that he wanted to spend more time with his family.   The directors of the respondent had asked him to reconsider his resignation but having thought about it the claimant decided to stick to his decision to resign.

After the claimant reaffirmed his decision to leave he met with one of the directors who asked what he was planning to do after he left.  The claimant was candid, outlining that he planned to work with a former colleague.  The director then became hostile stating that he would treat the claimant the same way he treated the former colleague who he was going to work with.  It was known within the business that the directors had sent a ‘strongly worded’ letter to the former colleague on her wedding day threatening legal action against her.  The claimant stated that he felt intimidated by the director’s behaviour and said that he broke down in tears following the meeting.  He felt the need to speak to another director who attempted to reassure the claimant.

Following the meeting, the claimant received a telephone call from a company that provided compliance services to the respondent, outlining how there was a ‘possible’ regulatory breach.’  The director who had initially reassured the claimant then had a meeting with the claimant.  At this meeting he suggested that the claimant take a sabbatical considering the suspected breach and in subsequent meetings he became aggressive.  This led to the claimant receiving a draft agreement on 4th June which would have extended the restrictive covenant in his contract from 12 months to 24 months.  The respondent also threatened to clawback commission from the claimant if he did not sign the document.  The claimant refused to sign the document and resigned with immediate effect on 7th June.

The Tribunal held that the meeting the claimant had with the directors constituted intimidating behaviour and that the respondent had made ‘spurious allegations’ against the claimant.  It was held that:

Whilst the term ‘blackmail’ may be somewhat emotive, there is no doubt that the Respondent made it clear to the Claimant that if he refused to sign the new draft agreement they would pursue allegations of gross misconduct against him which would undoubtedly tarnish his professional reputation.

As a result, the Tribunal was satisfied that when the claimant resigned on 7th June it was in response to a breach of the implied term of trust and confidence between an employee and employer. This was evidenced by the fact that the claimant did not delay in his immediate resignation nor did he affirm the breach by the respondent. Accordingly, the constructive unfair dismissal was upheld and the claimant was awarded £17,199.12.

Practical Lessons

Losing a valuable employee who could impact business is clearly a point when there may be some worry from an employer.   This decision demonstrates the wrong way of dealing with this issue.  The creation of allegations and pushing the claimant into signing a new agreement led to the compensation being payable.  The respondent should have also been aware of the fact that increasing the length of the restrictive covenant from 12 months to 24 months is unlikely to have been upheld.  This is especially so considering the judgment in Associated Foreign Exchange Ltd v International Foreign Exchange (UK) Ltd[2010] IRLR 964 when it was held that a 12 month restriction is likely to be regarded as an unlawful restraint of trade unless the employee was very senior and no other protection was available.
https://www.gov.uk/employment-tribunal-decisions/mr-peter-ward-v-fiducia-comprehensive-financial-planning-ltd-2602061-2018