Western Excavating (ECC) Ltd v Sharp
An employee is constructively dismissed only where the employer has committed a repudiatory breach of the contract, and unreasonable conduct by the employer is not enough.
Facts
Mr Sharp was suspended without pay for five days for taking time off work without permission. He was short of money, and asked his employer for an advance on his holiday pay or a loan, which was refused. He resigned, so that he could collect his holiday pay, and claimed unfair dismissal, arguing that he had been constructively dismissed because his employer had acted unreasonably in refusing to help him.
Legal principle
The Court of Appeal held that he had not been constructively dismissed. Lord Denning MR said that the test for constructive dismissal is a contractual one: if the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, the employee is entitled to treat himself as discharged and to resign. The employer's refusal to make the loan was not a breach of contract, so Mr Sharp had not been dismissed, however unreasonable the refusal might have seemed.
Related cases on the contract of employment and implied terms
- Braganza v BP Shipping Ltd [2015] UKSC 17, [2015] 1 WLR 1661
- Cresswell v Board of Inland Revenue [1984] ICR 508
- Eastwood v Magnox Electric plc [2004] UKHL 35, [2005] 1 AC 503
- Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2011] UKSC 58, [2012] 2 AC 22
- Faccenda Chicken Ltd v Fowler [1987] Ch 117
- Geys v Société Générale [2012] UKSC 63, [2013] 1 AC 523
- Gisda Cyf v Barratt [2010] UKSC 41
- Herbert Morris Ltd v Saxelby [1916] 1 AC 688
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