Constructive Dismissal May Constitute An Act Of Harassment

Please note this article was also included in the Discrimination Law Association‘s March 2022 Briefing.

Driscoll v (1) V&P Global Ltd and (2) Varela

Case background

Ms Driscoll started employment with V&P Global Ltd, a legal recruitment consultancy, as an executive assistant/operations manager, on April 2, 2019. Mr Varela was the founder and chief executive of V&P Global Ltd.

Ms Driscoll’s employment was terminated on July 29, 2019. She presented an employment tribunal claim asserting (amongst other things) that, on various occasions during her employment, Mr Varela made comments that constituted harassment related to sex, race or disability, contrary to Section 26 of the Equality Act 2010 (EA). Ms Driscoll claimed that she had resigned in response to the alleged harassment and this amounted to a constructive dismissal which was, in itself, an act of harassment.

Employment Tribunal

At a preliminary hearing, the ET held that it was bound by the EAT’s decisions in Timothy James Consulting Ltd v Wilton [2015] IRLR 368 and Urso v Department for Work and Pensions [2017] IRLR 304 to conclude that, as a matter of law, a constructive dismissal could not amount to harassment contrary to Section 26 of the EA. The ET, therefore, struck out Ms Driscoll’s claim, under Rule 37(1)(a) of the Employment Tribunals Rules of Procedure 2013 (as amended), as having no reasonable prospect of success.

Ms Driscoll appealed to the EAT arguing (amongst other things) that the Wilton and Urso cases should not be followed and/or are inconsistent and/or do not implement properly the relevant anti-discrimination EU Directives.

Employment Appeal Tribunal

The EAT allowed Ms Driscoll’s appeal with Ellenbogen J (sitting alone) undertaking careful analysis of the EAT’s decisions in the Wilton and Urso cases.

Ellenbogen J observed that, in the Wilton case, the EAT had held that, although incidents of harassment
related to sex had led the Claimant to resign, the application of harassment as prohibited conduct in the
context of employment in Section 40 of the EA did not include a resignation amounting to constructive dismissal; and that, accordingly, it had not been open to the ET, as a matter of law, to find that the constructive dismissal had been, in itself, an unlawful act of harassment, contrary to Section 26 of the EA.

Ellenbogen J noted, however, that the EAT had decided the Wilton case without regard to the relevant EU Directives.

Turning to the Urso case, Ellenbogen J found that Supperstone J’s comments in relation to constructive
dismissal (which endorsed the EAT’s decision in the Wilton case) were obiter (and therefore not binding
precedent) and, in any event, were themselves expressed without the benefit of any potentially relevant EU law or related submissions.

Ellenbogen J used Supperstone J’s analysis of the nature of a constructive dismissal, finding that “there can be no dismissal in the absence of conduct of the requisite manner on the part of the employer“.

She relied on the CA’s decision in Meikle v Nottinghamshire County Council [2005] ICR 1 as authority for the proposition that there is no principled basis for distinguishing between different types of dismissal when considering a discrimination claim. Ellenbogen J observed that the Meikle case, which concerned the question of whether a constructive dismissal amounted to a ‘dismissal’ within the meaning of Section 4(2)(d) of the Disability Discrimination Act 1995 (the equivalent of which is now found in Section 39(2) of the EA), was not referred to in the Wilton or Urso cases (and, as such, both cases were decided without regard to it).

Analysing the relevant EU Directives, Ellenbogen J held that “there is no principled basis upon which, in the Directives with which I am concerned, the word dismissal should be taken to exclude constructive dismissal“.

Turning to the EA, Ellenbogen J held that its harassment provisions must be construed purposively so as to conform with the relevant EU Directives (a position that is unaffected by Brexit due to Section 5(2) of the European Union (Withdrawal) Act 2018). She held that “the [EA] must be construed so as to proscribe harassment in the form of dismissal, including constructive dismissal” and concluded that the decision in the Wilton case was “manifestly wrong“, having been made without regard to the relevant EU Directives and the Meikle case.

Comment

This is an important decision and one which may carry significant practical implications for employment law practitioners and their clients.

One of its main effects relates to time limits under Section 123 of the EA. Under the law espoused in the Wilton case, each act of harassment by an employer leading up to an employee’s resignation would trigger a primary three-month limitation period within which a claim in respect of that act of harassment would have to be brought. A series of acts of harassment leading up an employee’s resignation might amount to “conduct extending over a period” for the purposes of s123(3) EA, in which case, all the acts in the series might be actionable even if some of them occurred outside of the primary three-month limitation period. If not, however, then some or all of the acts which occurred outside of the primary three-month limitation period might be time-barred, with the Claimant being able to bring claims only in relation to those acts that were within the three-month limitation period.

The EAT’s decision that a constructive dismissal can constitute an act of harassment may alleviate limitation difficulties in some cases. The resignation of an employee in response to a series of acts of harassment would, in a sense, bring all those acts into scope for the purposes of the harassment claim (and do away with limitation difficulties in respect of earlier acts in the series) provided, of course, that the resignation occurred within the three-month limitation period.

Moreover, the ability to base a harassment claim on a constructive dismissal, as opposed to having to couch the constructive dismissal in terms of direct discrimination, avoids the need for a claimant to identify a comparator and imports the wider test for claims of harassment (whereby the conduct complained of need only be ‘related to’ the relevant protected characteristic rather than ‘because of’ it, as is the case in the context of direct discrimination).

Furthermore, the EAT’s decision, in this case, may give rise to a potentially greater remedy for a successful claimant than was the case previously in that, where a constructive dismissal is found to constitute an act of harassment, the claimant would be entitled to compensation for any losses flowing from it, which might reflect a substantial loss of earnings (without a statutory upper limit) in addition to injury to feelings.