Constructive dismissal claim fails after employer rescinded disciplinary penalty
A sales executive who resigned after a flawed disciplinary process and proposed pay plan changes lost his constructive unfair dismissal claim. The tribunal found the employer's prompt retraction of the warning and fine prevented a breach of trust and confidence.
1 min read · Last updated 18 May 2026
Case details
- #customer-complaint
- #flawed-disciplinary-process
- #acas-code-breach
- #rescinded-penalty
- #pay-plan-proposal
Key facts
- The claimant was employed as a sales executive from 28 October 2019 to 31 December 2021.
- On 25 November 2021, the respondent received a customer complaint about the claimant's rudeness.
- A disciplinary meeting was held on 29 November 2021 without proper notice or representation, resulting in a final written warning and £300 deduction.
- The respondent rescinded the warning and deduction on 13 December 2021, acknowledging procedural flaws.
- The respondent proposed changes to the commission pay plan on 30 November 2021 but did not implement them.
- The claimant resigned on 31 December 2021, citing loss of trust and confidence.
Timeline
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Employment started
Claimant began employment as a sales executive at Avalon Motor Co Ltd.
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Customer complaint received
Respondent informed of a complaint about the claimant's rude and unfriendly behaviour from a customer.
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Disciplinary meeting and penalty
Claimant attended a disciplinary meeting without prior notice or representation. He was issued a final written warning and a £300 deduction from commission.
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New pay plan proposed
Respondent proposed changes to the commission pay plan, which would potentially reduce earnings. Both sales executives objected.
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Claimant objected to disciplinary process
Claimant emailed respondent disputing the disciplinary process and penalties, requesting retraction.
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Respondent rescinded warning and deduction
Respondent withdrew the final written warning and £300 deduction, admitting procedural errors. Claimant acknowledged but considered his position.
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Meeting with managing director
Mr Ruddle met claimant, confirmed no further action, but did not exonerate claimant. Claimant expressed feeling unwanted.
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Claimant resigned
Claimant resigned by letter, listing 12 points concerning the disciplinary process and proposed pay plan changes.
The legal issue
The tribunal had to decide whether the employer's actions—a flawed disciplinary meeting without proper notice or representation, followed by a rescinded penalty and a proposed pay plan change—amounted to a fundamental breach of the implied term of trust and confidence, entitling the employee to resign and claim constructive unfair dismissal.
The outcome
The tribunal dismissed the claim of constructive unfair dismissal. It found that the employer did not fundamentally breach the implied term of trust and confidence.
Key reasons:
- The employer rescinded the final written warning and £300 deduction within two weeks, acknowledging procedural errors.
- The proposed changes to the commission pay plan were not implemented and did not constitute a breach.
- The claimant resigned before giving the employer a reasonable opportunity to address his concerns.
No compensation was awarded as the claim failed.
Lessons & takeaways
- If your employer quickly corrects a flawed disciplinary decision and apologises, a constructive dismissal claim is unlikely to succeed.
- Resigning without giving your employer a chance to resolve the issue can undermine a claim that trust and confidence was destroyed.
- Proposed changes to pay or terms that are not implemented are unlikely to amount to a fundamental breach of contract.
- Employers who promptly admit and rectify procedural errors can avoid liability for constructive dismissal.
A flawed process, but a swift fix
This case shows that even a badly handled disciplinary process does not automatically give an employee the right to resign and claim constructive dismissal. The sales executive was called to a disciplinary meeting without proper notice or the chance to be accompanied. He was issued a final written warning and a £300 deduction from his commission. However, the employer, Avalon Motor Co Limited, quickly realised its mistake. Within two weeks, it rescinded both the warning and the deduction, acknowledging the procedural flaws.
What the employer did right
The tribunal noted that the employer's prompt action—withdrawing the penalty and apologising—meant that any breach of trust was not fundamental. The employer also proposed changes to the commission pay plan but never implemented them. The tribunal found that a proposal alone did not breach the contract. The key lesson for employers is that admitting and correcting errors swiftly can prevent a constructive dismissal claim from succeeding.
Why the employee's claim failed
The sales executive resigned on 31 December 2021, listing 12 grievances. But the tribunal decided he had not given the employer a fair chance to address his concerns after the warning was rescinded. The law requires that an employee resign in response to a fundamental breach, not simply because they feel unhappy. Since the employer had already taken steps to put things right, the resignation was not a response to an ongoing breach.
What this means for similar claims
For employees, this case is a reminder that constructive dismissal is a high bar. A single flawed decision, if quickly corrected, may not justify resignation. For employers, it highlights the importance of following proper procedures—and the value of acting fast to fix mistakes. The ACAS Code of Practice sets out minimum standards, and while breaching it can be evidence of unfairness, it does not automatically mean a dismissal is unfair if the employer takes corrective action.
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