July 29, 2016

Constructive Dismissal and Managing Departures

In Gibbs v Leeds United Football Club Ltd [2016] EWHC 960 (QB), the High Court considered whether changes to an employee’s duties amounted to a fundamental breach of contract entitling him to bring a claim for constructive dismissal.

Mr Gibbs was the assistant manager of Leeds United Football Club (Club). Following the departure of the Club’s manager, Mr Gibbs entered into discussions with the Club with regard to his own future during which he expressed the view that he would be willing to leave if suitable terms could be agreed. However, no agreement was reached. After the appointment of a new manager, the Club informed him of changes to his role, including that he could have no further contact with the first team and could only now work with the youth team. Mr Gibbs resigned and brought proceedings for constructive dismissal, claiming this change to his duties amounted to a demotion. The Club argued that there had been no breach because Mr Gibbs wanted to leave in any event. The High Court found in favour of Mr Gibbs. It agreed with him that the Club’s actions meant a clear loss of status for him which amounted to a fundamental breach of his employment contract. The fact that he had previously expressed a willingness to leave the Club on agreed terms was not material to this finding.

This case highlights the fact that employers should tread very carefully when dealing with disgruntled or disaffected employees and should avoid imposing detrimental changes to their terms of employment in the hope that they will simply leave.

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