In this case the EAT held that the tribunal had considered an irrelevant consideration of whether the employee had exhausted all stages of the grievance process when determining whether a repudiatory breach of contract had occurred.
The Facts
Ms Nelson is a teacher. She lodged a grievance about the school’s head teacher. Ms Nelson felt the headteacher had behaved in an aggressive and intimidating way towards her during a discussion about a work-related issue both during a meeting in the head teacher’s office and afterwards in a stairwell. The headteacher's voice was overheard by witnesses to be raised and described as having an angry tone when she was speaking to Ms Nelson in her office. Ms Nelson was seen to be visibly upset when leaving the office and followed by the head teacher who said words to the effect of "If you've got something to say, say it to my face" as well as what "we were discussing is confidential" while pointing at her.
Ms Bell, the education manager, was appointed to deal with the grievance. She investigated and following a Stage 1 hearing with Ms Nelson and her trade union representative, dismissed the grievance. Ms Nelson appealed the outcome to a Stage 2 hearing, which was chaired by Mr Trainer, the Head of Care and Criminal Justice. Ms Nelson's grievance was again rejected, and the Stage 2 outcome letter reminded Ms Nelson of her right to appeal to Stage 3. Stage 3 would be the final stage of the grievance and heard by a panel of Council members rather than members of the local authority management team. Having lost faith in the grievance process, Ms Nelson did not appeal to Stage 3 but resigned with immediate effect. In her resignation letter, Ms Nelson stated that she had no option other than to resign because of a serious material breach of contract referring to the evidence of first-hand witnesses being ignored, Ms Bell having admitted that she was not impartial, and Mr Trainer having ignored that admission. She brought an unfair constructive dismissal claim.
In dismissing the claim, the tribunal found that:
- the head teacher had acted in an aggressive and intimidating way, but this was a one-off incident of relatively brief duration, which was out of character. While causing some damage to the relationship of trust and confidence, it did not seriously damage or destroy that relationship so did not amount to a breach of the implied term.
- Ms Bell's handling of Stage 1 of the grievance process was inadequate, unfair and biased against Ms Nelson and Stage 2 of the process failed to correct the earlier bias and its approach to the evidence was also problematic. While this was distressing for Ms Nelson, there was no breach of the implied term because the situation had not reached the level of serious damage to, or destruction of, the relationship of trust and confidence.
- there was a reasonable expectation that Stage 3 would have been independent, fair and free from bias and that it would have provided a realistic chance of righting the wrongs of Stages 1 and 2. Accordingly, the internal processes had not been exhausted at the date of Ms Nelson's resignation and the potential of the remaining stages meant that the relationship of trust and confidence had not been damaged sufficiently seriously to found a claim for constructive dismissal.
In upholding Ms Nelson's appeal, the EAT found that:
- earlier case law held that only the employer's conduct should be considered when determining whether there has been a constructive dismissal.
- the fact that Ms Nelson did not engage with the third stage of the grievance procedure, or that, had she done so, a favourable outcome might have been achieved, was an irrelevant consideration when determining whether a repudiatory breach had occurred.
- the tribunal had also made an error in considering whether the conduct had actually damaged the relationship of trust and confidence as opposed to whether it would be likely to have that effect, and in failing to consider whether the whole of the employer’s conduct in the grievance process could be regarded cumulatively as a repudiatory breach.
What this means for employers
This case reminds employers that it is risky to rely on a final stage of a grievance process to correct earlier flaws: employees are not required to exhaust internal grievance processes, and they may still establish a constructive unfair dismissal where they have been let down in the early stages of a grievance. The lack of an appeal by the employee may be considered after liability has been established when considering the impact on compensation of any failure to follow the ACAS Code of Practice on disciplinary and grievance procedures.
In this case the tribunal were also critical of how the evidence was gathered and assessed at Stages 1 and 2 of the process. One criticism was that the reason why more or less weight was given to any particular piece of evidence had not been explained even in the broadest terms. Assessing evidence is difficult, but it is a crucial part of an investigating manager's role.
