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In the recent Employment Tribunal case of Mrs Stoate v British Airways: 3305972/2018 an Employment Tribunal sitting at Watford decided that British Airways had breached the contract of employment by failing to make a voluntary redundancy payment to Mrs Stoate.

The background to the case is that the Claimant was employed as a Turnaround Manager that fell within a wider group described by the acronym “TRMC”. British Airways wished to reduce costs and this was going to result in a reduction of staff numbers. The proposals stated that those in TRMC roles would be replaced by a newly created role. A ballot took place to vote on the proposed ways of reducing costs. British Airways stated that if the ballot was supportive of the proposals then the Turnaround work would remain in-house. If it was negative however the Turnaround work would be outsourced.

Crucially, the Tribunal found that in order to provide an incentive to TRMCs to vote in favour of the changes, British Airways had stated that all TRMCs would have the opportunity for voluntary redundancy. British Airways argued that, as is usual with a voluntary redundancy process, they did not intend to be bound by this before having had the opportunity to scrutinise the volume of applications received. However, the Tribunal found that across various documents including slides and responses to FAQs, British Airways had effectively promised that voluntary redundancy would be available in the event that the ballot resulted in support for the cost-cutting proposals. The language used included such phrases as, “All TRMCs would be offered voluntary redundancy,” and “voluntary redundancy is available to all…TRMC staff”.

The Tribunal found that British Airways had created a unilateral contract. This arises where one party makes a promise that it will grant something, in the event that particular conditions are met. In this case, the promise was to grant voluntary redundancy, in the event that the ballot supported the cost-cutting proposals.

The failure to uphold Mrs Stoate’s application for voluntary redundancy was thus a breach of contract and she was awarded £14,914, which was an enhanced amount that British Airways had committed to where Voluntary Redundancy was granted.

This case demonstrates that employers need to take care regarding the language used when inviting applications for voluntary redundancy. If the Respondent intends to retain a discretion as to whether to grant voluntary redundancy this ought to be clearly stated whenever applications for voluntary redundancy are invited.

In addition, the Claimant had pursued a constructive dismissal claim. This arises where an employee resigns but argues that it was in response to conduct by the employer that amounts to a fundamental breach of the contract of employment.

The Claimant alleged that the employer had fundamentally breached the contract of employment by failing to uphold her application for voluntary redundancy but also relied on alleged failures in respect of holiday pay and not being given a contract of employment or job description. The Employment Tribunal found however that the failure to offer voluntary redundancy had occurred some months before her resignation. By continuing to work the Claimant was deemed to have affirmed the breach of contract and thus could not rely on this. The Tribunal also decided that the Claimant’s resignation letter was rather vague and did not clearly state what the reason for resignation was. The Claimant had resigned prior to the completion of the grievance process. Her decision to raise a grievance was consistent with the continuation of the contract of employment. As the Respondent had not completed that process, it was unclear what had then caused the Claimant to resign. As such British Airways successfully defended the claim for constructive dismissal.

This case illustrates that it will be difficult for employees to succeed with a claim of constructive dismissal if they resign prior to the completion of a grievance process and also if the resignation letter does not clearly refer to the matters that will be later relied on as breaches of contract.

A link to this case can be found here.

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