Does resignation on a lengthy notice period constitute affirmation of an employment contract? And can making unwarranted findings, alleging loss of trust and confidence and reporting an employee to a regulator constitute repudiation of an employment contract?
Yes, in both respects, held the High Court in Brown & Anor v Neon Management Ltd & Anor.
The Defendants breached the Claimants’ contracts of employment. In response the Claimants resigned on notice alleging repudiatory breach of contract.
During the notice periods (six and twelve months respectively) the Defendants committed further repudiatory breaches including making unjustified findings of misconduct, alleging loss of trust and confidence and reporting the alleged misconduct to the first and second Claimants’ regulator. The first and second Claimants accepted the repudiation by resigning with immediate effect and brought actions for wrongful dismissal and breach of contract. The third Claimant continued to serve out her notice period and brought an action for breach of contract.
In determining these claims the High Court made two findings of importance.
First, at paragraph 141, resignation on notice where the notice period amounts to six months or more constitutes affirmation of the contract of employment, thus keeping it alive, in the absence of further breaches of contract.
Second, at paragraph 164, making unwarranted findings, reporting an employee to a regulator without proper foundation and alleging loss of trust and confidence all without giving an employee the opportunity to answer any allegations, could constitute repudiation of a contract of employment.
Thanks to Georgina Churchouse for preparing this case summary.