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Repudiatory breach by an employer in light of termination negotiations

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Repudiatory breach by an employer in light of termination negotiations

Repudiatory breach by an employer in light of termination negotiations

In the recent case of Gibbs v Leeds United Football Club, the High Court considered whether an employee's engagement in discussions around a consensual departure could prevent a claim of constructive dismissal by that employee.

The Claimant was employed as Assistant Manager by Leeds United Football Club ("the Club") on a fixed term contract from 12 April 2013 to 30 June 2016. The Claimant's contract provided for various benefits and set out the parameters of his role in serving the Club as Assistant Manager. The Manager that the Claimant worked with was dismissed by agreed terms on 31 May 2014. The Claimant was then asked if he was interested in becoming head coach but declined this role. The Claimant was accustomed to an environment in which a new manager would often bring in his own assistant, meaning he would lose his post. Whilst he expected to be dismissed, he continued in his role at the request of the Club.

When continuing in his role the Claimant was then required to work at a time during which he had expected to be on holiday and was usually treated as such, as the players of the Club were away and there was therefore little or no training work to be done. Discussions were held around terms upon which the Claimant might consensually leave Leeds. These discussions involved the Claimant expressly stating that he was unhappy at being brought back into work when there was no work to be done, and that "there was a deal to be done".

As the Claimant continued in this role it became more and more apparent that he was not expected to work with the new manager, was not expected to undertake his usual duties, and further was not invited to training events and meetings that an Assistant Manager in his position would have been expected to attend. He was then expressly told by email that his position would, with immediate effect, consist of working solely with the under-18 and under-21 players of the club, and he was told to have no contact and/or involvement with the first team. He was issued with training kit from the previous season as none was available specifically for him.

The Claimant resigned from his post with immediate effect by letter dated 26 July 2014. He then claimed constructive dismissal by reason of a repudiatory breach of contract by the Club. The High Court, in considering the Claimant's negotiations around leaving the club, held that such discussions were "beside the point" and did not prevent the conduct of the Club being a breach of the Claimant's contract. What was relevant was the fact that the Claimant "remained throughout willing - indeed, keen - to fulfil his contractual duties as Assistant Manager". The Claimant had therefore not breached his contract and instead, the Club's email was a repudiatory breach as it demonstrated that the Club no longer intended to be bound by the essential terms of the contract.

This case is useful in demonstrating that whilst employers and employees are free to engage in discussions surrounding a consensual termination of the employee's employment, such discussions in these circumstances do not prevent a claim for constructive dismissal by that employee.

If you have any queries, please do not hesitate to contact one of our employment specialists.