Red flags to look for when spotting financial abuse
Does an employee who initiates consensual termination discussions waive his right to resign and claim constructive dismissal? No said the High Court in Gibbs v Leeds United Football Club Ltd.
Mr Gibbs was employed by Leeds United Football Club as assistant manager on a three year fixed term contract. After the controversial resignation of the Manager who hired him, Brian McDermott, (and the failed attempt by Chairman Massimo Cellino, otherwise known as “The Manager Eater”, to fire him), Mr Gibbs was called into a meeting by the Chairman, assuming understandably that his time was up. Much to Mr Gibbs’s surprise, he was instead offered the role of head coach. To (presumably) no one’s surprise, given Cellino’s aforementioned nickname, Mr Gibbs turned it down.
Instead of sending Mr Gibbs off to Italy with the first team players for pre-season training as usual, Mr Gibbs was told to return to the Club to look after those first team players who had not gone to Italy; of which there were none! According to Mr Gibbs, the Club also kindly offered him some cleaning work at the training ground to keep him occupied.
Mr Gibbs’s reaction to this was to initiate discussions to agree terms upon which he could consensually leave the Club. Unfortunately, the poles between the two sides’ idea of reasonable terms were too long for the discussions to lead to a satisfactory outcome; so Mr Gibbs went back to work as assistant manager. That is, he went to work willing to do the job of assistant manager. He was not, however, actually given any work; a new head coach and assistant coach duo having by now been appointed. Again Mr Gibbs requested that either he be given some reasonable work to do, or a solution be found so that he could leave on agreed terms. This request was not responded to.
The final straw was the instruction which came a month later that Mr Gibbs was no longer to have anything to do with the first team, and was instead to be confined to working with the under 18s and under 21s, under the direction of the Head of Young Player Development. Mr Gibbs resigned with immediate effect.
By the time Mr Gibbs resigned on the basis of a repudiatory breach of contract by the Club, he had tried several times to agree with the Club a set of mutually agreed terms under which he could leave. However, in the opinion of Mr Justice Langstaff, this was “beside the point” and did not prevent the Club’s conduct from being a repudiatory breach of contract. It was held that Mr Gibbs somehow managed to remain willing, “indeed, keen”, to fulfil his duties as assistant manager at the Club, and could still therefore claim constructive unfair dismissal.
Mr Justice Langstaff also went on to clarify the position in terms of mitigation when an employee is subsequently offered another job by the same employer. Unsurprisingly, if an employer acts in fundamental repudiatory breach of their employee’s contract, claims not to be aware that their employee has even resigned, and then offers them a new job, the employee is not obliged to mitigate their loss by taking that job. Good to know.
Should you have any questions about the issues raised in this blog post please contact a member of our employment team.
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