Aggrieved about restrictions

If you have a contractual grievance procedure (which we usually advise against!) and get the procedure wrong, an employee may allege that you have breached their employment contract and rely on this breach to bring a constructive unfair dismissal claim. A senior executive may also argue that this breach releases them from their post-termination restrictions.

However, is it safer to breach a non-contractual grievance procedure? A recent case suggests that it is not!

Here, a company’s written grievance procedure provided that a grievance appeal would be dealt with by a more senior manager (than had dealt with the initial grievance). However, the same manager dealt with the employee’s grievance and appeal, and he rejected the appeal, after which the employee resigned and brought a constructive unfair dismissal claim.

The Employment Appeal Tribunal found that the company’s failure to deal with the employee’s grievance appeal properly breached the company’s implied duty of trust and confidence to the employee, and that the employee had, therefore, been constructively dismissed. If that employee had post-termination restrictions in his contract (which the case did not mention), he would have been released from the same.

Although the Tribunal indicated that a more minor breach of a grievance procedure may not breach trust and confidence so as to give rise to a constructive unfair dismissal claim, this is not be an argument you would want to run at Tribunal!

The moral of the case is, therefore, to be familiar with your internal grievance procedure and ensure that, wherever possible, you comply with it, especially where you are dealing with a senior executive with post-termination restrictions in their contract. Otherwise, you could end up facing a constructive dismissal claim as well as a dispute regarding post-termination restrictions!

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.