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Employment tribunals should punish the constructive dismissal, not the history

A victim of a constructive dismissal can only be compensated by an employment tribunal for damages relating to that actual dismissal, not for an employer's bad behaviour leading up to it, the Court of Appeal has ruled.06 Feb 2008

Constructive dismissal refers to an employee leaving an organisation usually because the trust and confidence implied in every employment contract had broken down. Workers leave jobs and subsequently take actions against the employers.

The Court of Appeal has said that employees cannot ask a tribunal to order payouts to compensate for the behaviour of an employer that led to the constructive dismissal. For this they must pursue a normal case through the courts, the Court said.

"Whilst the employer's repudiatory conduct [causing the breakdown of trust and confidence] is an essential condition of a constructive dismissal, it is not that conduct that effects the dismissal. It is the employee's acceptance of it," said Lord Justice Tuckey in his ruling. "Damage caused by that conduct is not damage suffered in consequence of the dismissal."

The ruling helps to clarify the relationship between the courts and employment tribunals. Tribunals were set up in the early 1970s to deal with many employment cases and they had a monopoly on cases of unfair dismissal, which cannot be tried in normal courts. Only cases of wrongful dismissal, which turn on a specific employment contract, can be heard in courts. Tribunal rulings can, though, be appealed through the courts.

In a case in which Gillian Triggs sued her former employer GAB Robins, an employment tribunal and the Employment Appeals Tribunal (EAT) both conceded that Triggs would have to begin a separate court action for compensation for lost wages or distress related to alleged bullying by her employer.

Triggs could either launch a personal injury claim against her former employer or a claim of breach of the implied term of trust and confidence against it.

Both the employment tribunal and the EAT, though, had ruled that Triggs's loss was caused by the dismissal, and that that should include losses due to ill health caused by the employer's conduct prior to the dismissal.

Lord Justice Tuckey expressed considerable sympathy with the view that Triggs should be awarded compensation for the employer's behaviour before the dismissal as well as as a direct result of it.

"Sympathy cannot, however, be allowed to get in the way of principle," he said. "The point, in short, was that loss of the type identified by the employment tribunal did not flow from the dismissal, which happened in March 2005. In so far as it was caused by the employer, it was caused by the employer's antecedent breaches of the implied term of trust and confidence, being breaches which, by the time of the dismissal, had already caused Mrs Triggs to become ill and so impaired her earning capacity."

Lord Justice Tuckey reminded the parties in a previous ruling where Lord Nicholls of Birkenhead said that the overlap of responsibilities is "not satisfactory" but must be policed well because some advisers were trying to go through the courts rather than tribunals because tribunal awards are capped and court awards are not.

Lord Justice Tuckey concluded that any tribunal award must be strictly limited to losses caused by a dismissal, not an employer's conduct leading up to a dismissal.

"It is fallacious to regard those antecedent breaches as constituting the dismissal," he wrote. "The dismissal was effected purely and simply by [Triggs's] decision in February 2005 that she wished to discontinue her employment. On a claim for unfair dismissal, that entitled her to compensation for whatever loss flowed from that dismissal."

"But that loss did not include loss (including future loss) flowing from wrongs already inflicted upon her by the employer's prior conduct … Mrs Triggs had an already accrued right to sue for damages in respect of them before the dismissal."

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