Constructive dismissal - Unfair dismissal

McBride v Falkirk Football and Athletic Club: Employment Appeal Tribunal (Lady Smith, Mr P Pagliari, and Mr M Smith): 17 June 2011

The employee was a football coach at the employer club (the club). In about June 2009, he was appointed as manager/head coach of the club’s under-19s team (the team). At the time of his appointment he had been assured that he would be in charge of the team, without interference. His role had included training, coaching, development and team selection. Nothing was said to him about what might happen if or when the club appointed a director of their youth academy.

In December 2009, the overall manager of the club (the manager) had become extremely angry with the employee. He spoke to the director of the club’s youth academy (the director) and told him that he (the director) was to pick the team in future. The director was also told to inform the employee of the change. The employee was very unhappy about the change to his role and resigned, claiming that he had been constructively dismissed.

The employment tribunal (the tribunal) found that the change to the employee’s role had not been a breach of contract as the real intention of the club at the material time had been that the employee would be replaced, in time, by the director of the youth academy once he had been appointed. The tribunal implied a term into the employee’s contract to that effect. The tribunal also found that the lack of prior consultation with the employee had not been a breach of the term of trust and confidence as an autocratic style of management was normal practice in football. The employee appealed.

The employee submitted that: (i) there had been no proper basis on which the term implied into his contract could have been so implied; and (ii) that the tribunal had erred by finding that the term of trust and confidence had not been breached: the tribunal’s finding had amounted to saying that because employees in football were often treated badly, it had not been unfair to treat him badly. Consideration was given to the test set out in Malik v BCCI SA (in liq) [1997] 3 All ER 1 (Malik). The appeal would be allowed.

(1) The general principle was that the express terms of a contract prevailed; it was to be assumed that parties would have expressed, at the time of contracting, all the material terms of their contract. It was only appropriate to imply a term where, on a consideration of the express terms of the agreement and the facts and circumstances that surrounded it, an implication arose that the parties had actually intended the term in question to be part of their original contract (see [54] of the judgment). In the instant case, the tribunal had had no proper basis in their findings of fact for implying a term that the employee would relinquish responsibility for selecting the team once the new academy director was in place and properly fulfilling the role. 

Quite apart from such a term being too imprecise to be enforceable, nothing had been said to that effect when the employee had been appointed to the team. The express term that the employee would have unqualified control of the team without interference, had been contrary to the term implied by the tribunal. Further, as the tribunal had accepted that the change in the employee's role had been causative of his resignation, it had erred in failing to find that the club had been in breach of contract when it had imposed a unilateral variation of contract on the employee. The change had plainly been a matter of substance and it had been a fundamental breach of contract (see [48], [54], [56]-[57], [59]. Keegan v Newcastle United Football Co Ltd [2010] IRLR 94 considered.

(2) It was established law that an employer had a duty not, without reasonable and proper cause, to conduct themselves in a manner likely to destroy or seriously damage the relationship of trust and confidence between employer and employee and it was plain from the test articulated by Lord Nicholls in Malik, that the conduct in question fell to be objectively tested (see [61] of the judgment).

In the instant case, the tribunal had further erred in finding that there had been no breach of the term of trust and confidence. The tribunal had accepted that the employee should have been consulted and that had he not been working in the world of football, a finding of breach of trust and confidence would have been made. The club could not pray in aid that it and others in the industry treated all employees badly and therefore treating an employee badly could not amount to a breach of the duty to maintain trust and confidence.

The tribunal’s approach had involved a one way duty of trust and confidence, rather than a mutual one, and that had not been right. The approach of the club had been a plain breach of the term of trust and confidence and the employee had resigned in response to it (see [60]-[61], [63]-[65] of the judgment).

A finding of unfair dismissal would be substituted and the matter remitted to a freshly constituted tribunal to determine remedy (see [66] of the judgment). Mahmud v BCCI SA (in liq); Malik v BCCI SA (in liq) [1997] 3 All ER 1 applied; Morrow v Safeway Stores plc [2001] All ER (D) 63 (Sep) applied.

Amanda Jones (instructed by Maclay, Murray & Spens LLP, Edinburgh) for the employee; John Carruthers (instructed by Russel & Aitken Solicitors, Falkirk) for the employer.