Constructive dismissal: why handling grievances correctly is so important

A recent Employment Appeal Tribunal decision demonstrates how a school’s failure to handle a grievance process properly may give rise to a breach of the implied term of trust and confidence leading to a claim for constructive dismissal. In addition, the fact that the employee chose not to complete the grievance process was irrelevant to the question of whether the employer had breached the implied term as only the employer’s conduct can be taken into account when determining this issue. Schools therefore need to make sure they handle grievances in a fair and unbiased manner, and in accordance with their grievance procedure.

Read below for further information on the case of Nelson v Renfrewshire Council.

Nelson v Renfrewshire Council

The Employment Appeal Tribunal has ruled that an Employment Tribunal erred when it took into account a teacher’s failure to exhaust the grievance procedure when finding that a school had not breached the implied term of trust and confidence.

Ms Nelson, a teacher, alleged that the head teacher had behaved in an aggressive and intimidating way towards her during a meeting in the head teacher’s office and afterwards in a stairwell. This was partially corroborated by two witnesses who overheard the incident.

Ms Nelson lodged a grievance alleging that the head teacher had behaved in a threatening, insensitive and aggressive way, contrary to the school’s Respect at Work Policy. Her grievance was investigated and dismissed following a first stage grievance hearing and her appeal was also rejected. The letter rejecting the appeal reminded Ms Nelson that she had a further right of appeal.

Ms Nelson decided not to exercise her further right of appeal as she had lost faith in the grievance process. She resigned, stating she had no option to resign as the evidence of two first-hand witnesses had been ignored, and the person who conducted stage one of the grievance process had admitted she was not impartial and yet that admission had been ignored on appeal.

Ms Nelson claimed unfair constructive dismissal, relying both on the head teacher’s conduct and the handling of the grievance process as giving rise to a breach of the implied term of trust and confidence. The Employment Tribunal ruled that the head teacher’s conduct had caused some damage but not serious enough damage to destroy the relationship of trust and confidence. As for the grievance process, the handling of stage one had been inadequate, unfair and biased, and this had not been corrected on appeal. However, the Tribunal considered that there was a reasonable expectation that the further appeal would have been independent, fair and free from bias and have a realistic chance of righting the earlier wrongs. As the internal processes had not been exhausted when Ms Nelson resigned, and the remaining stage could potentially remedy the earlier wrongs, it considered that the relationship of trust and confidence had not been damaged sufficiently seriously to give rise to a claim for constructive dismissal.

Ms Nelson appealed to the Employment Appeal Tribunal, which agreed with her that the Employment Tribunal should not have taken her failure to exhaust the grievance process into account when deciding that the employer had not breached the implied term of trust and confidence; only an employer’s conduct should be taken into account. It was irrelevant that Ms Nelson did not engage in the further appeal or that, had she done so, she might have achieved a favourable outcome.

The Employment Appeal Tribunal also ruled that the Employment Tribunal had applied the wrong test by considering whether the conduct actually damaged the relationship of trust and confidence, rather than whether it was likely to have that effect.

The Employment Appeal Tribunal sent the case back to the Employment Tribunal to consider whether the school’s conduct did breach the implied term of trust and confidence.

What does this mean for schools?

A failure to deal with a grievance in a fair and unbiased manner, and in accordance with your grievance procedure, may give rise to a breach of the implied term of trust and confidence, entitling an employee to resign and claim constructive dismissal.

Schools cannot rely on an employee’s failure to exhaust the grievance process to support an argument that the school has not breached the implied term.

However, an employee’s failure to exhaust the grievance process may affect the level of compensation they receive. The Acas Code of Practice on Disciplinary and Grievance Procedures requires an employee to raise a grievance with their employer, to attend a meeting to discuss it, and to appeal if they are not happy with the grievance outcome. Where an employee unreasonably fails to follow the Acas Code of Practice, an Employment Tribunal can reduce the amount of compensation awarded by up to 25%.

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