Employment Tribunal decisions provide useful reminders that flawed disciplinary or grievance investigations can create real litigation risk for employers, even where the employer still has a defensible case.
Constructive dismissal arises where an employee resigns in response to the employer’s fundamental breach of contract. Often, the alleged breach is of the implied term of mutual trust and confidence: conduct which, viewed objectively, seriously damages or destroys the employment relationship.
In Mr T Dalton v Capita Employee Benefits[1], the claimant brought a claim for unfair constructive dismissal after concerns were raised about his timesheets. The employer conducted an investigation into the claimant’s completion of time sheets and subsequently the claimant took out a grievance about the investigation process. The grievance was initially rejected but the claimant appealed and the appeal was upheld.
The claimant applied for the employer’s defence to the claim to be struck out on the grounds that it had no reasonable prospect of success. He argued that the employer’s own grievance appeal had accepted serious flaws in the disciplinary and grievance process, including that the informal process should have lasted longer and that managers had not been properly briefed on their roles.
The Tribunal did not strike out the employer’s defence. It recognised that further issues still had to be decided, including whether there was a fundamental breach, whether the employee resigned, at least in part, because of it, and whether he resigned prematurely before the grievance appeal had concluded.
However, the case carries an important warning. Risk increases where an employer:
- fails to follow its own disciplinary policy;
- moves too quickly from informal to formal action;
- does not properly brief decision-makers; or
- gives the impression that the outcome has been prejudged.
Any of these failings may support an argument that the implied term of trust and confidence has been breached.
Employers should also take care with internal appeal outcomes. If an appeal accepts that a process was flawed, that finding may later be relied on as evidence in tribunal proceedings. Findings should therefore be accurate, balanced and clear about what has, and has not, been accepted.
The practical lesson is straightforward: investigations should be properly planned, handled by appropriately briefed managers, and conducted in line with the employer’s policies and basic fairness. A poor process may not automatically mean liability, but it can make a claim significantly harder to defend.
Where the issues are sensitive, complex or senior-level, employers should consider seeking support from an external investigator.
If you would like to discuss any of the issues raised in this article, please contact Ed Henderson or Reshma Derasari.
[1] Case No. 2201765/2021, Preliminary Hearing Judgment