Should an employee quit as soon as they consider there to be a breach of the employment contract?

When advising employees on their various options following an alleged breach of contract by an employer, one issue which always arises is at what stage the employee should formally resign, if taking this course of action. There is always the concern that, through not resigning immediately, it could be held that an employee has affirmed any breach of conduct. Potentially, this could be the case even where it should be clear that they did not intend for the contract to continue.

The Employment Appeal Tribunal have held however in the recent case of Chindove v Morrisons Supermarkets that delay in resigning in itself cannot amount to an affirmation of a breach of contract. The Employment Tribunal had held in the first instance that due to the fact that the last act of mistreatment (this being the failure of an HR manager to investigate a grievance) had occurred 6 weeks prior to resignation, the employee had affirmed the breach of contract. On appeal however, it was held that the matter of time is not to be taken in isolation. What is more important is whether the employee has demonstrated through their conduct that they have made a choice that they wish for the contract to continue.

This is good news for employees who are simply considering their options following a breach of contract, or attempting to negotiate a settlement with their employers, as often happens in sport. It is not uncommon for negotiations of a settlement to take several weeks, particularly in these days of foreign owners and busy schedules. The news that it is possible to undertake this process without running the risk of being accused of affirming a breach is well received therefore. As confirmed in the case, it is the conduct which is important. Therefore, if it can be shown that a participant has been replaced (as is easily demonstrated where a new manager or coach have been appointed) and that the individual has been engaged in attempting to agree a settlement, it will not be held that the breach which lead to the resignation has been affirmed, simply by the fact that it occurred some time before any resignation, following a breakdown in negotiations.

Published July 25, 2014

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