Claimant v John Rae Limited (in Liquidation) — 2019

The claimant had worked for the respondent and its predecessor since 1984, with continuity of employment. After the share sale on 12 May 2017, he continued as a director and manager under terms found by the tribunal to include a net salary of £52,000 per year and continuing contractual benefits including pension contributions, paid annual leave, medical insurance, wifi and call out allowances, with a later agreed car allowance. The tribunal found that those variations were ratified after the share purchase agreement.

The tribunal found that the respondent repeatedly failed to pay the claimant the wages due under the contract after the share purchase. It accepted the claimant's evidence that arrears were repeatedly promised but not paid. In February 2018, the claimant was told to leave the premises, to resign as a director, and that payment of arrears would not be made; he was also threatened with a fraud complaint. The tribunal held that the continuing non-payment of wages, the instruction to leave, the refusal to pay arrears, and the threats were material repudiatory breaches of contract and a breach of the implied term of trust and confidence. It found that the 23 February 2018 events were also a last straw.

The tribunal held that the claimant was entitled to accept the repudiation and resign, and that his work from home while arranging handover did not amount to affirmation of the contract. It therefore found constructive dismissal and held that the dismissal was unfair under section 98(4) of the Employment Rights Act 1996 because the respondent had acted unreasonably in dismissing him, had not followed a procedure, and had threatened fraud complaints without giving details. It awarded a basic award of £14,670 and a compensatory award of £500 for loss of statutory rights.

The tribunal separately upheld the wrongful dismissal claim and awarded £8,663.01 in lieu of 12 weeks' notice. It also upheld the breach of contract claims and awarded the contractual sums found due for unpaid wages, pension contribution, holiday pay, medical insurance premium, car allowance, wifi allowance and call out allowance, producing the contractual award components set out in the judgment.