In Gibbs v Leeds United Football Club Ltd, the High Court has given some useful guidance on constructive dismissal and the need to take care when negotiating an exit with an employee.
Facts
Mr Gibbs was the assistant manager at Leeds United. In May 2014, the current manager Brian McDermott (who Mr Gibbs worked under) left on agreed terms.
As with most football clubs, the appointment of a new manager was likely to mean Mr Gibbs was replaced with the new manager’s choice of assistant. Indeed most contracts in this sphere are for a fixed duration with a manager and assistant manager’s contract being for the same period.
Mr Gibbs discussed with the club’s owners that he would be prepared to leave on agreed terms given that Mr McDermott had left, but he also made it clear in the absence of such an agreement he was happy to stay on in his current role.
In June 2014 a new manager, David Hockaday, was appointed and over the course of the next few weeks, Mr Gibbs was not invited to fly with the first team for pre-season training in Italy, was not given his usual assistant manager duties for a period of weeks, was not invited to staff meetings, was not even given the new season’s training kit to wear. He was then told via an email that going forward he would be working solely with the U-18 and U-21 players and he was to have nothing to do with the first team.
Mr Gibbs resigned in response to what he alleged was a repudiatory breach of his employment contract and brought a claim in the High Court for various sums including notice and bonus.
Decision
The main point of interest in the decision was the argument runs by Leeds that Mr Gibbs’ indication that he was willing to leave on agreed terms meant there could be no repudiatory breach on the club’s part. This argument was roundly rejected by the High Court, who held that it was not a breach of contract on Mr Gibbs’ part to initiate a discussion about consensual termination.
The fact that Mr Gibbs had said that he was prepared to leave if suitable terms were agreed was beside the point. He had remained ready and willing to fulfil his duties. The email he received removing him from his first team duties was clearly
Comment
The case provides confirmation that a common sense approach will be taken by the courts when considering whether there has been a repudiatory breach of contract. Simply because an employee has entered into discussions about a consensual termination does not then give an employer ‘carte blanche’ to treat them poorly or denigrate their role.
Employers should always take care when discussing an agreed exit with employees. Even if it appears that an exit is inevitable, care should always be taken to ensure that the status quo is preserved until a binding agreement is reached. Many employers proceed on the assumption that the employee will be leaving and end up in hot water if the deal then breaks down.
Gibbs v Leeds United Football Club Ltd [2016] EWHC 960 (QB)
