Marisol's resignation at Ridgemont Ceramics
Marisol has worked for Ridgemont Ceramics Ltd for six years as a regional sales manager on a salary of £58,000. Her contract gives three months' notice and contains no mobility clause. In January she raised a written grievance: the company owed her £9,000 in commission on two contracts she had won. No meeting was ever arranged. On 3 April her manager told her that her role was being relocated 200 miles away and that she could 'take it or leave it'. She said nothing, continued working as normal, and on 12 May resigned by letter citing 'the company's ongoing failure to deal with my grievance and the relocation of my role'. She began a new job on 1 September at £50,000. She is 58. Ridgemont argues that she affirmed the contract by staying for six weeks and that the relocation was a reasonable management decision.
1. Has Marisol been constructively dismissed, or did she affirm the contract?
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Constructive dismissal under section 95(1)(c) ERA 1996 requires a repudiatory breach by the employer, resignation in response, and no affirmation. Western Excavating v Sharp requires the employer's conduct to be a fundamental breach going to the root of the contract.
Relocating a role 200 miles with no mobility clause is a unilateral and fundamental change to the place of performance, and it is a strong candidate for repudiatory breach. The failure to progress a written grievance, particularly where commission is unpaid, is also relevant: a sustained failure to deal with a contractual grievance procedure, or an accumulation of conduct that destroys trust and confidence, can amount to breach. Under Kaur v Leeds Teaching Hospitals a series of breaches may be relied on cumulatively, and a final 'last straw' need not itself be repudiatory.
Affirmation is the weak point. Staying six weeks while continuing to work and accept pay after learning of the breach suggests she accepted the contract continued. But courts assess whether the employee genuinely had a choice, and the continuing failure to hear the grievance gives her a live, ongoing breach rather than a single spent one. Her letter cites the grievance first, which helps. On balance she has a strong arguable case, but affirmation is a real risk and the first six weeks should be analysed carefully.
2. If Marisol succeeds, how is her compensation for unfair dismissal calculated and what reductions apply?
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Six years' service satisfies the two-year qualifying period. The basic award follows the statutory formula on age, length of service and gross pay, capped by the statutory maximum week's pay and the 20-year limit. Because she is 58, all six years fall in the 41-and-over band, giving 1.5 weeks' pay per year, so nine capped weeks.
The compensatory award is based on the financial loss suffered, subject to the statutory cap (or a year's salary if lower, being the greater of the two-the cap is uprated annually and must be checked). Loss includes net pay for the notice period and the period out of work, the difference between £58,000 and £50,000 for the period after she starts the new job and any future loss, pension loss, and a modest sum for loss of statutory rights.
Reductions matter here. Polkey allows a percentage reduction for the chance she would have been fairly dismissed anyway-for example had the employer consulted properly and imposed the relocation after notice. Contributory fault is unlikely. Mitigation is satisfied because she found work, but only from 1 September, so the four months before then are recoverable. An ACAS Code uplift of up to 25% under section 207A ERA 1996 may apply to the grievance failure. Claim must be presented within three months less one day of the effective date of termination, extended by ACAS early conciliation.
3. What claims arise for the unpaid commission and for notice pay, and in which forum should each be brought?
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Commission earned under the contract is 'wages' within section 27 ERA 1996. Paying none of it is an unauthorised deduction from wages under section 13, and the tribunal can order repayment. The claim must be brought within three months less one day of the deduction, with the ACAS early conciliation extension, though a series of non-payments may extend the reference period.
Notice pay is different. If she can establish constructive dismissal, the employer's repudiation relieves her of her own notice obligation and she can claim the three months' pay, £14,500, as damages for wrongful dismissal. Unfair dismissal and wrongful dismissal are separate causes of action: the first is statutory and depends on fairness, the second is contractual and depends on breach. Compensation for wrongful dismissal is not subject to the unfair dismissal cap but is subject to the duty to mitigate, so the salary from her new job from 1 September reduces the overlap if the notice period had run that far.
Both the wages claim and the wrongful dismissal claim can be heard in the employment tribunal, which has contract jurisdiction where the claim arises on termination, but the contract claim limit of £25,000 applies. A high-value breach of contract claim can go to the county court instead. Advise pursuing commission as an unlawful deduction and notice pay as a termination-linked contract claim.