The claimant had a contract entitling her to six month’s notice. She left claiming constructive dismissed, but found work shortly after. She still sought the full six months’ pay. The EAT found in her favour. The employer appealed.
Held: The appeal succeeded. The key question is what good industrial relations practice requires. Though the rule requiring payment of the full contractual liability applied in gross misconduct dismissals, ‘It is simply not the case, however, that the same practice applies in circumstances where the employer is in repudiatory breach of contract which is subsequently accepted by an employee . . it would plainly not be appropriate for the employer to give pay in lieu at the time of the alleged repudiatory breach. He is purporting to keep the contract alive and he is willing to continue to pay the wages. Furthermore, the employee may want to keep the contract alive. He may be willing to tolerate the breach and do no more about it. Alternatively, he may wish to sue for damages but remain in employment. Nor is it a general practice, let alone good practice, for the employer to make a payment in lieu of notice at the point when an employee resigns in response to an alleged repudiatory breach. There would typically be a real dispute as to whether there has been any repudiatory breach or not.’
Though this meant that an employee constructively dismissed may be worse off: ‘this limited exception to the general principle that the compensation must reflect actual loss is rooted in good practice rather than in wider considerations of justice or logic.’
Scott Baker LJ, Maurice Kay LJ, Elias LJ
 EWCA Civ 938
England and Wales
Appeal from – Stuart Peters Limited v Bell EAT 22-Oct-2008
EAT UNFAIR DISMISSAL: Compensation/Mitigation of loss
The employee was unfairly constructively dismissed. She was entitled to a 6 month notice period that was not paid by the employees in that period, . .
Cited – Norton Tool Co Ltd v Tewson NIRC 30-Oct-1972
(National Industrial Relations Court) The court was asked to calculate damages on a dismissal, and particularly as to whether the manner of the dismissal should affect the damages.
Held: The common law rules and authorities on wrongful . .
Cited – Burlo v Langley and Carter CA 21-Dec-2006
The claimant had been employed by the defendants as a nanny. She threatened to leave, but then was injured in a car acident and given a sick note. The employer immediately engaged someone else. She was found to have been unfairly dismissed. The . .
Cited – TBA Industrial Products Ltd v Locke EAT 1984
The employee had been unfairly dismissed with 12 weeks pay in lieu of notice.
Held: The court re-affirmed the narrow principle of Norton Tool v Tewson. Browne Wilkinson J P said: ‘It seems to us that the decision in the Tradewinds  IRLR . .
Cited – Dunnachie v Kingston-upon-Hull City Council HL 15-Jul-2004
The claimant sought damages following his dismissal to include a sum to reflect the manner of his dismissal and the distress caused.
Held: The remarks of Lord Hoffmann in Johnson -v- Unysis were obiter. The court could not, under the section, . .
Cited – Babcock FATA Ltd v Addison CA 1987
The employee was unfairly dismissed for redundancy. He was given 5 weeks pay in lieu, a statutory redundancy payment and a severance payment under the employers’ own scheme. He did not obtain another job until well after his period of notice had . .
Lists of cited by and citing cases may be incomplete.
Updated: 01 November 2021; Ref: scu.374696