Constructive Dismissal – Must the employee exhaust internal appeal processes before resigning?

Constructive dismissal occurs where the conduct of the employer is such that the employee can consider his/her contract of employment to have been fundamentally breached (thus allowing him to resign and to treat him or herself as having been dismissed).

The old ones are the best ones and the case that governs constructive dismissal remains Western Excavating (ECC) ltd v Sharp [1978] ICR 221. That case says that if the employer is guilty of conduct going to the root of the contract or which shows that the employer no longer intends to be bound by the contract then the employee is entitled to consider that s/he has been discharged from the contract. The case went on to specify that the employee must resign promptly following the employer’s breach.

In Nelson v Renfrewshire Council [2024] EAT 132 the EAT considered the extent to which the obligation to resign promptly still exists.  In this case, the employee (a teacher) was argued to have resigned too promptly. In particular, she resigned before exhausting all the appeal possibilities available to her under the grievance procedure. Her rationale was that she and her witnesses had not been believed in the earlier stages of her grievance so she had little confidence that the final stage of the appeal process would produce a different result.  The Employment Tribunal, at first instance, held that she could not maintain that there had been a fundamental breach of contract until all appeal avenues had been exhausted.

The EAT disagreed citing Tolson v Governing Body of Mixenden Community School [2003] IRLR 842. In that case, the EAT had unequivocally stated that the only conduct to be considered when determining whether there had been a constructive dismissal was that of the employer.  Accordingly, in the present case the employee’s failure to exhaust internal appeal procedures was not relevant and the employee’s prompt resignation fell in line with the requirement to do so set out in Western Excavating.