The Employment Appeal Tribunal case of the week this week is The Carphone Warehouse Ltd v Martin [2013] UKEAT 0371_12_1202. This case concerns a claim for indirect disability discrimination (under the Disability Discrimination Act 1995) and a claim for constructive dismissal.

  1. The facts in The Carphone Warehouse Ltd v Martin
  2. The law relating to constructive dismissal
  3. The Employment Appeal Tribunal’s judgment in The Carphone Warehouse Ltd v Martin
  4. Our specialist employment law solicitors’ thoughts on The Carphone Warehouse Ltd v Martin

The facts in The Carphone Warehouse Ltd v Martin

Mr Martin (“the Claimant”) commenced employment with the Carphone Warehouse (“the Respondent”) in June 2004 as a branch manager. He initially performed well in this post. In April 2008 a new regional manager was appointed. Mr Martin and Mr Scott appear to have personal and professional problems with one another. In October 2009 the Claimant became bankrupt. This had an effect on his ability to work in his position as he needed to have FSA authorisation to do so (and if he became bankrupt then this authorisation could apparently be removed). On 6 November 2009 the Claimant was suspended by Mr Scott for breach of the companies’ trade-in policies (he was apparently retaining mobile phones that were traded in). A disciplinary process ensued and was slightly delayed due to the obtaining of a report from the Claimant’s GP. Due to a mistake of the Respondent’s, the Claimant’s pay was withheld for the month of March 2012. The Claimant complained about this. On 6 April 2010 the Claimant submitted a 14-page grievance relating to Mr Scott’s behaviour and bullying and the fact that he was yet to receive a disciplinary hearing or a suspension letter. He also complained that the process was affecting his mental health. In July 2012 the Respondent again wrongly processed the Claimant’s payslip. The Respondent rectified this in August 2010 but the Claimant complained that these problems were again seriously affecting his mental health. On 9 August 2010 a finding to the disciplinary process was issued, with the Claimant being given a final written warning and demoted. There was a further dispute over the Claimant’s ability to practice (due to FSA regulations) and the Claimant was apparently threatened with further disciplinary action if he did not provide the Respondent with particular information (believed to be his certificate that he had been discharged from bankruptcy). The Claimant submitted his notice of termination on 31 October 2010 and made claims to the Employment Tribunal of direct disability discrimination, unlawful deduction from wages, indirect disability discrimination and constructive dismissal.

The Employment Tribunal found in the Claimant’s favour on both the indirect disability discrimination claim and the claim for constructive dismissal but dismissed the claims for unlawful deduction from wages and direct disability discrimination. The Respondent appealed this. The Claimant cross-appealed on a number of points.

The law relating to constructive dismissal

In order to succeed in a claim for constructive dismissal a Claimant must resign and demonstrate to the Employment Tribunal (on the balance of probabilities) that:

  1. The Respondent had engaged in conduct which could be deemed to be a fundamental breach of contract
  2. The breach of contract was sufficiently serious (both subjectively and objectively) to entitle the Claimant to resign
  3. The Claimant resigned (at least in part) because of the breach and not for any other reason; and
  4. The Claimant did not delay too long in resigning from their employment after the breach took place

The Employment Appeal Tribunal’s judgment in The Carphone Warehouse Ltd v Martin

The Employment Appeal Tribunal upheld the Respondent’s appeal against the finding of indirect disability discrimination but dismissed the Respondent’s appeal against the finding of constructive dismissal. The EAT found that in relation to the indirect disability discrimination claim, the Employment Tribunal had incorrectly deemed the Respondent’s deduction of pay and failure to deal with the disciplinary process to constitute a “practice” (and that a PCP was therefore established). The EAT found that these issues could not in fact constitute a practice and the claim for indirect disability discrimination was therefore dismissed. The EAT further found that the Respondent’s conduct in deducting the Claimant’s pay, failing to deal with the disciplinary process in a timely manner, and threatening further disciplinary action in October 2009 was sufficient to establish a fundamental breach of contract (of the implied term of mutual trust and confidence) and that the Employment Tribunal’s findings in this respect was not perverse (and therefore could not be subject to challenge).

Our specialist employment law solicitors’ thoughts on The Carphone Warehouse Ltd v Martin

Chris Hadrill, a specialist employment law solicitor at Redmans, commented that “this case demonstrates that employers should be extremely careful to carry out disciplinary processes in a timely and efficient manner. A failure to do so may allow the employee to resign from their employment and claim constructive dismissal – even if the employer had perfectly reasonable grounds for disciplining the employee in the first instance”.

About Redmans Employment Team

Redmans Employment Team deal with employment matters for both employers and employees, including drafting employment contracts and policies, advising employers and employees on compromise agreements, handling day-to-day HR issues, advising on restructures, and handling Employment Tribunal cases for both employers and employees

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