UK: employee's failure to appeal grievance does not prevent constructive dismissal claim based on earlier procedural flaws

In Nelson v Renfrewshire Council the Employment Appeal Tribunal ruled that an employer's failures in relation to the operation of the first two stages of a three stage grievance procedure were serious enough to amount to a breach of trust and confidence entitling the employee to resign and claim constructive dismissal, and this was unaffected by the employee's failure to exhaust the grievance procedure. 

The claimant, a teacher, had raised a grievance about the behaviour of the Head Teacher.  The tribunal found that the first stage of the grievance procedure had been inadequate, unfair and biased: the initial decision-maker had failed to take formal statements from the Head Teacher and a witness supporting her version of events, and had not shared the content of those undocumented conversations with the claimant.  She had also failed to explain why she preferred their evidence to that of the claimant who was supported by written statements from two other witnesses.  At the second stage, the appeal manager failed to explain even in the broadest terms why he gave more or less weight to any particular piece of evidence and simply concluded that the evidence did not establish that the alleged behaviour had occurred.  He had also failed to detect, from comments made at the stage two hearing by the original decision-maker, that she was biased and had a predisposition to believe the Head Teacher because of her role and status within the school hierarchy.  Further, he had failed to appreciate that, given this stage was intended to be a re-hearing, he could and should have sought direct witness evidence himself.  The tribunal had found that the third stage, an appeal to an external council, would have carried out a proper inquiry and corrected the earlier failings, with a realistic prospect that the grievance would have been upheld.  However, the EAT made clear that the employee's failure to engage in the third stage and its likely outcome were irrelevant in determining whether there was a breach of trust and confidence at the point the employee resigned.

This case serves to remind employers that flaws in the early stages of a grievance (or disciplinary) procedure may be enough to entitle an employee to resign and claim constructive dismissal.  It will be no answer to argue that the final stage would have remedied the employee's complaints had they chosen to engage with it (although the employee's failure to appeal could lead to a reduction in compensation for not following the Acas Code of Practice).  It will be important to ensure every stage of a grievance or disciplinary investigation is carried out thoroughly and fairly, with all relevant witnesses formally interviewed and their evidence recorded.  It would be prudent to provide regular training for managers on how to operate disciplinary and grievance procedures, including collecting and assessing witness evidence, and provide checklists to flag the key steps and issues to consider.