A (Stamford) Bridge too far? Trouble at Chelsea FC

Recent media reports indicate that Eva Carneiro, Chelsea FC’s former Doctor is bringing a claim for constructive unfair dismissal against her former…

Recent media reports indicate that Eva Carneiro, Chelsea FC’s former doctor, who was removed from first team duties following her on-pitch treatment of an injured player, is bringing a claim for constructive unfair dismissal against her former employer. The incident attracted plenty of media attention following the very public nature in which manager Jose Mourinho criticised his medical staff over the incident, and also when he was alleged to have publically insulted Dr Carneiro. 

So what is a constructive unfair dismissal and what does the employee need to prove? 

Constructive dismissal: the definition 

Section 95(1)(c) of the Employment Rights Act 1996 provides the following definition: 

“an employee is dismissed by his employer if…and…only if… the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct.” 

That clears that up then. Fortunately, case law adds greater clarity. In Western Excavating v Sharp, a key case on constructive dismissal, Lord Denning said: 

 “if an employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer's conduct. He is constructively dismissed”. 

So, an employee can resign with or without notice, in circumstances where he or she is entitled to terminate as a result of the conduct of the employer. That means the employer does not dismiss the employee expressly, but its conduct towards the employee is so poor that the employment relationship is undermined and the employee is entitled to resign. The result is that a dismissal takes place, and if proven, such dismissal will almost always be unfair and entitle the employee to compensation, where appropriate. 

The four-step test 

There are four key elements that make up a constructive unfair dismissal claim: 

  1. There must be a repudiatory (fundamental) breach of the employment contract by the employer, justifying the resignation of the employee;
  2. The employee must act through resigning in the face of that breach and treat the contract as being terminated;
  3. The employee must resign in response to that breach and not for some other unrelated reason; and
  4. The employee must not delay too long, otherwise they may be considered to have waived their right to action the breach. This is referred to as affirmation. 

All four elements must be satisfied to be successful. 

Fundamental breaches can usually be more readily established if express (written) terms of the contract are breached such as the provision of pay, holiday entitlement, benefits etc. Often however, employees will seek to rely upon the ‘implied term of mutual trust and confidence’ as the term which has been fundamental breached. In other words, the employee is (justifiably) able to say that they are no longer able to continue to work for the employer in light of the employer’s conduct in its dealings with them. Effectively the argument is that there has been a break down in the reciprocal relationship of trust between employer and employee. It is important to recognise that the test is an objective one and that the intentions of the employer are irrelevant. 

Unlike other unfair dismissal law, there is no need to assess the employer’s conduct against ‘the range of reasonable responses’ test. Unreasonable conduct may well be a fundamental breach of contract but the reasonableness of the employer’s conduct is not the standard applied here. Take a prolonged failure to pay wage, for example. It may not be the employer’s fault, due to a third party error, but there remains a breach of contract that is very likely to be fundamental. 

Where next for Chelsea FC? 

Whilst the precise details of Dr Carneiro’s dispute with Chelsea FC are unknown (and we are not involved in advising on it), one element likely to feature in her particulars of claim will be her alleged enforced ‘demotion’ in subsequent matches and the restrictions imposed on her in performing her role. It is alleged that she was prevented from sitting pitch-side and from treating players in her usual way. Arguably, although the full facts are not available, this is a reduction or change in duties rather than a formal ‘demotion’ or change in grade. 

Would demotion amount to a fundamental breach of contract? Demotion will almost always be a fundamental breach of contract enabling the employee to resign and claim constructive dismissal (where demotion is not being used as a disciplinary sanction). If your contract or disciplinary procedure entitles you to impose demotion as a disciplinary sanction you may be entitled to demote. The ACAS Code says that demotion may only be used as a sanction where it is allowed for in the employee’s contract or is with their agreement. Demotion is always relatively high risk and certainly if it transpires that the demotion was not, objectively, for a very good reason then such an action would most likely amount to a fundamental breach. Where no formal ‘demotion’ takes place but an employee’s duties are changed or reduced, it will be a matter for a Tribunal to decide based on all the facts of the case whether a fundamental breach has occurred. Consideration will be given to what the employee’s duties are under their contract of employment and what the contract says about flexibility/variation. 

There has been much speculation about whether Mr Mourinho verbally abused Dr Carneiro at pitch side, or whether he was seen to be cursing in general. We will leave the linguistic experts to resolve that one and the facts of that case, but if an Employment Tribunal finds an employee has been verbally abused by their manager then there is likely to be a compelling case for a breach of the implied term of mutual trust and confidence. In addition, those potential allegations may also give rise to discrimination complaints. It has been reported that Mr Mourinho has been personally named as a respondent to the claim, strongly indicating that some aspect of discrimination has also been raised. If, of course, an employee complains of discrimination and is then treated adversely for doing so, that would amount to unlawful victimisation (but we don’t know if that is something asserted in this particular case). 

Time will tell whether Mr Mourinho and the club went too far in his alleged touch-line behaviour and in the subsequent decisions about Dr Carneiro. Of course, the parties could decide to settle the matter before it reaches the Employment Tribunal, because as Mr Mourinho’s lawyers will tell him, it is ill-advised to take a ‘no comment’ stance in the Tribunal. 

Chris Bailey-Gibbs (chris.bailey-gibbs@weightmans.com) is a Solicitor in the Employment, Pensions and Immigration Team in Leeds. 

If you are concerned that your organisation may face a claim of constructive dismissal or you would like advice to prevent a tricky situation from escalating please do not hesitate to get in touch with Chris or speak to your usual Weightmans contact.

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