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The High Court has upheld an employee's claim for constructive dismissal and found that his willingness to negotiate a suitable termination package did not prevent his employer's conduct from being a repudiatory breach of his contract of employment.
In Gibbs v Leeds United Football Club, Mr Gibbs was the assistant manager at Leeds United Football Club (Leeds), engaged under a fixed term contract.
The manager of Leeds, who had worked closely with Mr Gibbs at other clubs, left Leeds on agreed terms. As it is common for new managers to bring assistant managers with them, Mr Gibbs expected to be dismissed. Instead, he was asked whether he would be interested in becoming the head coach at Leeds, a position he indicated he would decline.
Mr Gibbs made it clear he was prepared to negotiate an early termination of his contract, but was also equally content to remain as assistant manager at Leeds for the remainder of the contractual term.
In the absence of any resolution, Mr Gibbs began to be excluded from meetings and other duties he would expect to perform as assistant manager. He was given little to do, as advised that there was cleaning work to be done and was subsequently told he was to have no involvement with Leeds' first team and would instead work with the youth academy.
Mr Gibbs resigned on the basis that Leeds was not prepared to honour his contract and pursued a claim for constructive dismissal.
The High Court's decision
The High Court upheld Mr Gibbs' claim and found that Leeds' conduct was a repudiatory breach of Mr Gibbs' contract of employment, which prompted his resignation. Mr Gibbs' willingness to negotiate a managed exit did not prevent Leeds' conduct from being a breach and did not thwart his claim for constructive dismissal.
In this case, negotiations for a managed exit barely got off the ground. Though Leeds indicated that they wanted Mr Gibbs to stay with the club in his existing role, its conduct demonstrated otherwise.
Where an employee expresses a willingness to negotiate a termination package, consideration should be given to the employee's usual duties and these should continue during the negotiation period.
If this is undesirable for any reason, the employer should consider putting the individual on garden leave rather than creating a situation in which the employee feels pushed out and inclined to resign.