NEWS: Leeds United Football Club Guilty of Constructive Dismissal
When Brian McDermott was sacked as manager of Leeds United Football club, the assistant manager, Nigel Gibbs, tried to negotiate an exit package. He later resigned, claiming constructive dismissal. The High Court upheld his claim.
Can you still claim constructive dismissal if you resign after settlement negotiations have broken down?
Constructive dismissal is a type of unfair dismissal. It occurs when an employee resigns after there has been a fundamental breach of their contract of employment, entitling them to treat it as at an end. Examples of constructive dismissal could include an employee being demoted or having their core duties taken away from them.
Gibbs was the assistant manager at Leeds United. He was asked if he was interested in becoming head coach after the manager he worked with was sacked. But he turned down the offer.
Gibbs remained in employment after McDermott and Leeds parted company on 30th May 2014 but his role was largely undefined once David Hockaday took charge of the first team as head coach and named Junior Lewis as his assistant.
He and club owner Massimo Cellino previously discussed the possibility of severing his contract but failed to reach an agreement.
It was made clear to the Claimant that he was not expected to work with the new manager.
His normal duties included training the first team, but he was excluded from this.
Leeds did not take Gibbs on their summer tour of Italy and he spent much of pre-season observing training sessions at Thorp Arch. He was told by email that he was to have no contact with the first team and he would work with the youth academy instead. He resigned in response to this.
He then made a claim for constructive dismissal.
The High Court made clear that they did not consider it was a breach of contract on his part to initiate a discussion about a consensual termination of employment. The fact that he had said that he was prepared to leave if suitable terms were agreed was irrelevant. He had remained ready and willing to fulfil his duties but these were taken away from him. The email was a breach of his contract, as it led to a clear loss of status, and he had resigned in response to that. He was therefore entitled to succeed in his claim for notice pay.
This judgment is really important. It means that you do not need to be too cautious about entering into settlement discussions for fear that if they break down you would not be able to make a claim for constructive dismissal. It also shows that although constructive dismissal claims can be difficult, you might be successful if, like Gibbs, your main duties are taken away from you.