Can An Honest Mistake By An Employer Allow An Employee To Claim Constructive Dismissal?

In the case of Roberts v Whitecross School [2012] UKEAT 0070_12_1906 the Employment Appeal Tribunal (“EAT”) held that although the employer’s mistake was an honest one, there was a settled intention to reduce pay, which amounted to a fundamental breach of contract. This meant that the Employee was entitled to resign in anticipation of the breach.

The facts of the case were that the Employee was on long-term sick leave, due to work related stress and depression. After a time, the Employer informed the Employee that they proposed to reduce his pay by 50%.

They believed that they were entitled to do this, because a collective agreement provision negotiated with all employees and their union allowed 100% pay only for accidents or injury at work. The Employer honestly believed that this applied only to physical injury, whereas the Employee successfully showed that this also applied to psychological and psychiatric injuries at work. The Employee was entitled to be paid his wages which had been unlawfully deducted, and for damages for constructive dismissal because the Employer’s actions amounted to a fundamental breach of contract.

The moral of this is that even honest mistakes can lead to fundamental breaches, and when intending to make a major change to any employment contract, take legal advice first.

If you wish to discuss any issue arising from this article, or any employment issue contact Janet Long on 020 3254 1435 (direct line) or by email to j.long@pj-h.co.uk

The contents of this article are intended for general information only. It is not a substitute for legal advice, and shall not be deemed to be or constitute legal advice. We therefore cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. We will, however, be pleased to advise you on the specific facts of your case