Constructive Unfair Dismissal – Western Excavating v Sharp

Western Excavating v Sharp [1978] ICR 221

When attempting to take an employer to the tribunal for Constructive unfair dismissal one of the key cases that has to be considered is that of Western Excavating v Sharp. This case lays out the foundation elements to create constructive dismissal.

The facts of the case are fairly simple. An employee (Mr Sharp) worked for the company and one of his terms of contract was that if he worked extra time he could have time off in lieu. He then went on to take an afternoon off work to partake in a card game which led to his dismissal. He appealed the dismissal and was reinstated but with a 5 day pay suspension in its place. Without these 5 days pay he was in financial difficulty and attempted to get his employers to pay his accrued holiday pay in advance and when they refused that he asked for a loan of £40. The welfare officer explained they couldn’t loan that amount but suggested that Mr Sharp should see him again to discuss the details. Mr Sharp was not happy with this and so resigned. He then claimed for constructive unfair dismissal at the tribunal.

At tribunal they held that the company should have “leant over backwards” to help Mr Sharp and although at appeal they all disagreed with this decision they could not overturn it due to the fact that the tribunal had made findings of facts that were not perverse.

When it reached the court of appeal however Lord Denning took a different approach to the matter and the Court reversed the decision of the tribunal and held that Mr Sharp had not been constructively dismissed at all. Lord Denning went on to state,

“If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer’s conduct”

Elements of Constructive Dismissal

There are from this judgment thus established four main elements to constructive, which are as follows:

  1. A repudiatory breach on the part of the employer. This may be an actual or anticipatory breach, but must be sufficiently serious to justify the employee resigning.

  2. An election by the employee to accept the breach and treat the contract as at an end.

  3. The employee must resign in response to the breach

  4. The employee must not delay too long in accepting the breach, as it is always open to an innocent party to waive the breach and treat the contract as continuing (subject to any damages claim that they may have)

So if you have resigned and fulfil the 4 criteria as mentioned above then you may potentially have a case for constructive dismissal. If you think this is the case or if you are unsure please do no hesitate to contact us on 01207.655178 to gain some free initial advice.

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