Civil Fraud Quarterly Round-Up: Q1 2021
In Atkinson v Community Gateway Association the EAT held that an employee was not barred by his own prior repudiatory breach of his employment contract from bringing a constructive unfair dismissal claim. However, the EAT further held that if the employer could show that it would have fairly dismissed the employee, if it had known about the prior breach, then compensation could be reduced by up to 100%.
Mr Atkinson was suspended from his position as Director of Resources at a housing Association, pending a disciplinary investigation into an overspend of £1.8 million. During the investigation, the Association discovered that Mr Atkinson had been sending overtly sexual emails to an employee at another housing association, from his work email account, during the working day. This was in clear breach of the Respondent’s IT policy, which Mr Atkinson had himself drafted and which he was responsible for enforcing. In addition, it was discovered that he had assisted this lady in her application to join the Respondent, by telling her what to expect at interview and what to say in her interview presentation.
Whilst the disciplinary process was ongoing, Mr Atkinson resigned with immediate effect and claimed constructive unfair dismissal on the grounds of the Respondent’s failure to follow a fair procedure in the investigation and disciplinary process. He further claimed that the evidence as to his breaches of contract had been obtained in breach of his right to privacy and were therefore inadmissible.
The EAT held that there had been no breach of privacy and therefore the evidence in relation to Mr Atkinson’s breach of contract had been obtained lawfully. However, it further held that the obligation of trust and confidence had not been suspended as a result of Mr Akinson’s breach of that obligation. If one party commits a fundamental or repudiatory breach of contract 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. It was therefore established that Mr Atkinson has the right to claim constructive unfair dismissal, despite his prior conduct, and his claims have been remitted for re-hearing to a newly constituted Employment Tribunal.
This case is a useful reminder that employees should be made aware of work IT policies and procedures. In addition, it has clarified the relevance of a prior repudiatory breach of contract by an employee claiming constructive unfair dismissal.
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