Programme Executive loses constructive dismissal claim after resigning for higher-paid role
A Programme Executive with 10 years' service at Rolls Royce Plc failed to prove constructive unfair dismissal after resigning to take a significantly higher-paid job elsewhere. The tribunal found no breach of trust and confidence.
2 min read · Last updated 18 May 2026
Case details
- #constructive-dismissal
- #international-assignment
- #tax-equalisation-policy
- #salary-disparity
- #affirmation-of-contract
- #resignation-for-better-role
Key facts
- The claimant accepted an international assignment to the US and signed a policy excluding tax on rental income.
- The assignment was terminated early due to restructuring, and the claimant was repatriated.
- The claimant incurred a tax liability on rental income because of early repatriation, which the respondent refused to pay under policy.
- The claimant complained about his salary being lower than a direct report, but the respondent gave him an out-of-cycle pay increase.
- The claimant resigned to take a higher-paid senior role elsewhere, not because of the alleged breaches.
- The tribunal found no breach of mutual trust and confidence and dismissed the claim.
Timeline
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Employment commenced
The claimant started working for Rolls Royce Plc in a staff-level role.
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International assignment began
The claimant started a Lead Customer Manager role in the US, originally due to end April 2021.
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Assignment terminated early
Due to restructuring, the assignment ended early and the claimant repatriated to the UK.
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Started new role
The claimant began a Programme Executive role at £70,000 per annum.
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Raised tax issue
The claimant emailed the tax compliance manager asking the respondent to cover his rental income tax liability.
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Respondent refused tax payment
The respondent confirmed it would not pay the tax, citing the policy.
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Raised salary issue
The claimant complained to his manager about being paid less than a direct report.
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Out-of-cycle pay increase
The claimant received a pay rise to £72,800, eliminating the disparity.
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Resignation
The claimant resigned, citing a new senior role at Rapiscan Systems with significantly higher pay.
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Started new employment
The claimant began his new role at £126,500 per annum.
The legal issue
The tribunal had to decide whether Rolls Royce Plc's refusal to cover a personal tax liability and an initial salary disparity amounted to a repudiatory breach of the implied term of mutual trust and confidence, and whether the claimant resigned in response to that breach.
The outcome
The tribunal dismissed the claim for constructive unfair dismissal.
The key reasons were:
- The claimant resigned to take a senior role at Rapiscan Systems with a salary of £126,500, significantly higher than his £72,800 at Rolls Royce.
- The tribunal found no breach of the implied term of mutual trust and confidence. The tax issue was governed by a clear policy that the claimant had signed, and the salary disparity was promptly corrected with an out-of-cycle pay rise.
- Even if there had been a breach, the claimant had affirmed the contract by continuing to work for several months after the alleged breaches and by resigning for an unconnected reason (the better job offer).
No compensation was awarded as the claim failed.
Lessons & takeaways
- To succeed in a constructive dismissal claim, you must resign in response to a fundamental breach of contract by your employer, not for other reasons like a better job offer.
- Continuing to work for several months after an alleged breach can be seen as affirming the contract, which may lose your right to claim constructive dismissal.
- A clear written policy that you have signed will usually be upheld by tribunals, even if it leads to an unexpected financial outcome.
- If your employer corrects a salary disparity promptly after you raise it, that is unlikely to amount to a breach of trust and confidence.
When a resignation is about a better offer, not a breach
This case shows how important it is for employees to understand that a constructive dismissal claim requires a clear link between the employer's conduct and the decision to resign. The Programme Executive had worked for Rolls Royce Plc for a decade and had been on an international assignment in the US. When the assignment ended early due to restructuring, he incurred a personal tax liability on rental income because of the early repatriation. The company refused to pay this, citing a policy he had signed. Separately, he discovered he was paid less than a direct report, but the company gave him an out-of-cycle pay rise to fix that.
Despite these frustrations, the tribunal found that neither issue was a fundamental breach of contract. The tax policy was clear and agreed, and the salary issue was resolved promptly. More critically, the claimant resigned only after securing a senior role elsewhere with a much higher salary — a fact that undermined his claim that he left because of the employer's conduct.
What the employer did right
Rolls Royce Plc had a documented policy on tax equalisation that the claimant had signed. When he asked for an exception, the company stuck to its policy — which the tribunal accepted as reasonable. On the salary point, the company acted quickly once the disparity was raised, giving an out-of-cycle increase that eliminated the difference. This responsiveness helped show that the company was not acting in a way that destroyed trust and confidence.
Why this matters for similar claims
For anyone considering a constructive dismissal claim, this case is a reminder that timing and motive are everything. If you continue working for months after the alleged breach, or if you leave primarily because of a better opportunity elsewhere, the tribunal is likely to find that you affirmed the contract or resigned for an unconnected reason. The legal test is strict: you must show a repudiatory breach by the employer and that you resigned in response to it — not because you found a better job.
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