EAT: employee who might be dismissed for gross misconduct may still be entitled to claim constructive dismissal

The EAT found in favour of Mr Atkinson, a former employee of a housing association in Lancashire, who had reported the disclosure of some confidential information by another member of staff to management. Atkinson claimed that this information was a protected disclosure. Atkinson then resigned after the housing association had discovered that he had been sending "overtly sexual" messages to his partner in breach of its email use policy, and that he may have influenced the decision to offer her a job with his employer.

"While a contract of employment subsists, the obligations which that contract imposes upon the parties continue to subsist," the judge said in his judgment. "[S]ome of those obligations may in certain circumstances be in suspense or not enforceable ... but the obligation of trust and confidence which lies on each party to a contract of employment are not suspended or put in abeyance because one party has broken that obligation."

"If one party commits a fundamental or repudiatory breach of that obligation and the other does not accept that breach as bringing the contract to an end, whether because he does not know about the breach or otherwise, the contract continues," he said.

However, the judge said that an employment tribunal would be expected to consider reducing compensation in the event that the dismissal was found to be unfair "if it was established that, because of the employee's original breach he could and, if the employers had known about it, would have been fairly dismissed in any event". In these circumstances, the employment tribunal would be entitled to reduce any compensation award by as much as 100% if it was appropriate to do so, he said.

Both the unfair dismissal and protected disclosure claims were sent back to the employment tribunal for reconsideration. However, the EAT ordered that a different tribunal reconsider the case due to the "strong unconscious temptation" the original tribunal would have to take the same view of the facts.

In its original decision, the employment tribunal said that Atkinson's constructive dismissal claim would not succeed due to the "fundamental breaches of his contract of employment" he had committed through his abuse of the housing association's email system. Because of this, it dismissed his claim as having no prospect of success without hearing all of the evidence.

The EAT conceded that, at the point when the tribunal considered the case, previous case law "did not speak with one clear voice" as to whether the constructive dismissal claim would automatically fail. However, after the EAT had heard evidence but before it delivered its decision, the Court of Session in Scotland had decided the point, finding that the employer's "obligation of trust and confidence" remained in place for as long as the employment relationship continued.

"In our view, the tentative steps in the English decisions to which we have referred in a different but inconclusive direction should not deter us from what we regard as the appropriate principle, as set out in those judgments which we respectfully follow," the EAT said in its judgment.

The EAT then went on to consider whether the housing association's use of evidence found in Atkinson's emails was an unjustified interference of its former employee's right to respect for his private life under Article 8 of the European Convention on Human Rights. It concluded that it appeared to be "untenable" to argue that it was an unjustified interference when the housing association was "legitimately investigating" Atkinson's conduct, noting that Atkinson had been partly responsible for devising the policy.