In Atkinson v Community Gateway Association UKEAT/0457/12, the Employment Appeal Tribunal (EAT) considered whether an employee in fundamental breach of his employment contract could still bring a constructive dismissal claim against his employer.

Mr Atkinson was employed as the Director of Resources of a housing association (the Association).  When the Association discovered an overspend of £1.8 million, it gave Mr Atkinson the option of accepting a small settlement package or facing disciplinary proceedings; he chose the latter.  During its disciplinary investigation, the Association discovered that Mr Atkinson was in a relationship with a female worker of another housing association.  In breach of the Association's email policy, he had sent the female worker both sexually explicit and work related emails.  He also tried to influence the Association's recruitment panel to hire her. The Association included these matters in its investigation.  Mr Atkinson resigned before any outcome was reached and brought a claim for constructive dismissal, alleging that the Association was in fundamental breach of contract by searching his emails.  At first instance, the Employment Tribunal held that Mr Atkinson's misconduct prevented him from bringing such a claim.  The EAT disagreed: an employee who had committed a fundamental breach which had not been actioned by his employer was entitled to bring a claim for constructive dismissal if the employer itself was subsequently in fundamental breach of contract.  In this event, however, it was open to a Tribunal to reduce any compensation to the employee by up to 100% if the employer could show that the employee would have been dismissed had a fair procedure been followed. The case was remitted to a freshly constituted Tribunal for re-hearing.

This case is helpful in clarifying previous conflicting case law on the correct approach to be followed where both the employer and employee have fundamentally breached the employment contract.