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Constructive Dismissal and Harassment

Can constructive dismissal itself amount to an act of harassment?

In a recent case decided by the Employment Appeal Tribunal the question as to whether harassment included constructive dismissal itself was discussed in a case where the employee had been successful in claiming harassment on the grounds of her sex.

The Law

The definition of harassment is set out in section 26 of the Equality Act 2010 which provides:

“(1) A person (A) harasses another (B) if

(a) A engages in unwanted conduct related to a relevant protected characteristic, and

(b) the conduct has the purpose or effect of

(i) violating B’s dignity, or

(ii) creating an intimidating, hostile, degrading, humiliating or offensive environment for B…

(4) In deciding whether conduct has the effect referred to in subsection (1)(b), each of the following must be taken into account –

(a) the perception of B;

(b) the other circumstances of the case;

(c) whether it is reasonable for the conduct to have that effect.

(5) The relevant protected characteristics are (in this case) … sex …”

Constructive unfair dismissal occurs where the employer does not dismiss the employee, but the employee resigns and can show that they were entitled to do so by virtue of the employer’s conduct.

The law regarding constructive unfair dismissal is set out in section 95(1)(c) of the Employment Rights Act 1996 which provides:

(1) For the purposes of this Part an employee is dismissed by his employer if (and, subject to subsection (2) … only if) −

(c) the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer’s conduct.

This means that if the employer’s behaviour is a repudiatory breach of the employment terms the employee can treat the contract as being at an end and resign.

The Facts

In this case Ms Wilton had been employed by Timothy James Consulting Limited (the ‘Employer’) for just under 6 years when she resigned and pursued claims for constructive unfair dismissal and sex discrimination.

Ms Wilton started her employment with the Employer in January 2007 as Head of Sales, and at the time she started her employment it was a relatively small Company run by two Directors, Mr O’Connell and Mr Bennett.

In May 2011 Ms Wilton started a personal relationship with Mr O’Connell and was promoted to a Director in July 2011 along with two colleagues, Mr Backhouse and Mr O’Dair.

In February 2012 the relationship between Ms Wilton and Mr O’Connell ended. They remained on good terms and it was not an acrimonious split.

Also in February 2012 a new employee started working for the Employer, Ms Docker, and she was managed by Ms Wilton. By June 2012 Ms Docker had started a personal relationship with Mr O’Connell. When Ms Wilton became aware of this she raised concerns with Mr O’Connell that this relationship was having an effect on her team.

In September 2012 a meeting took place between Mr O’Connell, Ms Wilton and Mr Backhouse regarding repayment of loans that Ms Wilton and Mr Backhouse had each made to the Employer. When Ms Wilton and Mr Backhouse refused to sign a document prepared by Mr O’Connell he became abusive and threw a pen at them both.

On the 31st October 2012 a further meeting took place between Mr O’Connell, Ms Wilton and Mr Backhouse. During this meeting Mr O’Connell was critical of Ms Wilton’s management style. This lasted for approximately 30 minutes, during which time he called her a ‘green eyed monster’, referring to alleged jealousy and her behaviour to Ms Docker.

On the 13th November 2012 a further meeting took place with all Directors and Mr O’Connell was once again very aggressive to Ms Wilton, insisting she apologise to Ms Docker.

Ms Wilton denied any wrongdoing towards Ms Docker and no investigation or action was taken in respect of allegations made by Mr O’Connell.

At around the same time the Employer entered into settlement negotiations with Ms Docker who was paid approximately £11,000 under a Settlement Agreement.

Following Ms Docker’s departure from the business Mr O’Connell invited Ms Wilton to a meeting within which he stated that he wanted to draw a line under matters and move on. Ms Wilton asked if he thought that she had bullied Ms Docker, to which, crucially, there was no reply.

As result of the meeting and Mr O’Connell’s refusal to answer the question Ms Wilton left her employment giving one months’ notice. She argued that she had the impression Mr O’Connell believed the allegations against her, despite no proper investigation, and therefore she had lost all trust and confidence in the Employer.

Ms Wilton’s claims to the Employment Tribunal were successful for both constructive unfair dismissal and discrimination.

The Employer appealed against the decision of the Employment Tribunal regarding unlawful harassment. There was no appeal against the finding of unfair dismissal.

The Decision

In the course of the appeal the Employment Appeal Tribunal considered the Employment Tribunal’s decision and reasoning in respect of the four specific events which Ms Wilton alleged amounted to harassment under the Equality Act.

The Appeal Tribunal agreed that the Employment Tribunal had made the correct reasoning and analysis of the evidence in deciding that the October meeting, exclusion from investigation against team members and conduct of Mr O’Connell at the 13th November meeting all constituted harassment.

The meeting in September 2012 did not amount to harassment related to sex as it had been aimed at both Ms Wilson and Mr Backhouse.

With regards to the Employment Tribunal’s decision that constructive dismissal constituted harassment the Appeal Tribunal accepted that prior acts of harassment may give rise to a constructive dismissal however the act of constructive dismissal itself does not fall within the definition of harassment and therefore in itself cannot amount to an unlawful act of harassment.

Points to Note

This case serves as a useful reminder for Employers of why workplace relationships should be discouraged and avoided, particularly where managers and staff are concerned.

The fact that Mr O’Connell had previously been in a relationship with Ms Wilton was important in the Tribunal’s finding of harassment and also practically in the events that led up to the Tribunal case.

It can be difficult to manage in a small business, but wherever possible, if a relationship develops between staff, steps should be taken to ensure any management or supervision is then diverted to a third party. Where break ups occur these should be handled with care to avoid future potential issues.

You can read the full case details and judgement here Timothy James Consulting Limited V Wilton

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The information contained in this blog post is provided for guidance and is a snapshot of the law at the time it is written. It is provided for your information only and should not be used as a substitute for obtaining legal advice that it specific to your particular circumstances.

The guidance should not be relied upon in any decision making process. It is strongly recommended that you seek advice before taking action.

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