368 Chapter 13Employment (1): The contract of employment, employment rights and dismissal
(iii) the employee terminates the contract on the grounds of the employer’s unreasonable
conduct (this is known as constructive dismissal).
In Western Excavatingv Sharp (1978)Lord Denning explained the meaning of constructive
dismissal:
If the employer is guilty of conduct which is a significant breach going to the root of the contract... then the employee is entitled to regard himself as discharged from any further performance...
He is constructively dismissed. The employee is entitled in those circumstances to leave at the
instant without giving any notice at all, or, alternatively, he may give notice and say that he is
leaving at the end of the notice.
If a contract is frustrated there will be no dismissal. The meaning of frustration, in relation to
contracts of employment, is considered below at pp. 373 – 5 in relation to wrongful dismissal.
When is a dismissal unfair?
‘Unfair’ has a technical meaning here. Section 98 ERA 1996 provides that all dismissals are
unfair unless the employer can justify the dismissal on one of following six grounds:
(i) The employee’s capability or qualifications to do the job. (Dismissal for lack of
qualifications is very unusual. Dismissal for lack of capability often arises because the
employee is ill.)
(ii) The employee’s conduct, inside or outside the employment. (If the conduct is outside
the employment then it must be serious enough to have a detrimental effect on the
employer’s business.)
(iii) That the employee was made redundant. (Redundancy is considered later in this
chapter at p. 375.)
(iv) That it would be illegal to keep the employee on in the job.
(v) Retirement in accordance with the Equality Act 2010 (see page 380).
(vi) Some other substantial reason which would justify the employee’s dismissal.
The last category is necessary to prevent the list of reasons from becoming too rigid. Usually
the reason is a commercial one.Wilson vUnderhill House School Ltd (1977)Teachers were awarded a national pay rise. The school where the applicant was employed
was in financial difficulties and could not meet the award in full. All the other teachers
agreed to forgo some of their pay rise. The applicant would not agree to this and so she
was dismissed.
HeldThe dismissal was fair.Was the dismissal actually fair?
If the employer can show that the dismissal was for one of the six reasons which can be
fair, then the tribunal will have to decide whether the dismissal actually was fair. The
courts have adopted a test known as the band of reasonable responses. Under this test the