Withholding paternity pay and threatening discipline during leave led to constructive dismissal
A senior store manager who resigned after his new employer withheld paternity pay and started disciplinary proceedings for unauthorised absence has won a constructive unfair dismissal claim. The tribunal awarded £20,446.
2 min read · Last updated 18 May 2026
Case details
Key facts
- The claimant was employed by Vodafone as a Senior Store Manager and transferred to Credentia Foods Ltd under TUPE on 1 November 2021.
- The claimant had been granted 8 weeks paid paternity leave by Vodafone before the transfer, which was not rescinded.
- The respondent withheld paternity pay for 5 weeks and initiated a disciplinary process for unauthorised absence.
- The claimant resigned on 20 December 2021 citing the respondent's failure to pay paternity pay and disciplinary threats.
- The tribunal found that the respondent's conduct breached the implied term of trust and confidence and amounted to constructive unfair dismissal.
- The respondent was fixed with Vodafone's knowledge that the leave had been booked and not cancelled.
Timeline
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Claimant informs manager of pregnancy
The claimant told his manager AB that his wife was pregnant and he wanted to take 8 weeks paternity leave.
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Updated paternity leave request submitted
The claimant submitted an updated paternity leave request to change the start date to 25 October 2021, still for 8 weeks.
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Manager AB delays approval
AB responded to HR that the updated request 'can't be approved yet', but HR had already updated the system.
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AB asks to retract paternity leave
AB emailed HR asking how to retract the paternity leave, claiming insufficient notice. HR suggested he discuss with the claimant but no cancellation was effected.
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Paternity leave starts
The claimant began his 8 weeks paternity leave as booked.
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TUPE transfer to Credentia Foods Ltd
The Lakeside store transferred from Vodafone to Credentia Foods Ltd. The claimant was on paternity leave.
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Respondent requests evidence of leave
Mr Sachdeva asked the claimant to provide evidence that 8 weeks paternity leave had been approved.
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Respondent states only 2 weeks entitlement
Mr Sachdeva told the claimant that Vodafone indicated only 2 weeks paternity leave was contractual, and his absence was unauthorised.
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Disciplinary hearing scheduled
The claimant was invited to a disciplinary hearing on 17 December 2021 for unauthorised absence.
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Claimant resigns
The claimant resigned with immediate effect, citing unfair treatment, loss of pay, and disciplinary threats during paternity leave.
The legal issue
The tribunal had to decide whether the respondent's conduct – including withholding paternity pay and threatening disciplinary action for absence that had been pre-approved by the transferor employer – amounted to a repudiatory breach of contract, entitling the claimant to resign and claim constructive unfair dismissal.
The outcome
The tribunal ruled in favour of the claimant, finding that Credentia Foods Ltd had constructively unfairly dismissed him. The key reason was that the respondent's failure to honour the paternity leave agreed by Vodafone (the transferor), together with withholding pay and initiating disciplinary proceedings, destroyed the mutual trust and confidence required in the employment relationship.
Compensation awarded:
- Basic award: £7,344.00
- Compensatory award: £7,359.00
- Loss of statutory rights: £500.00
- Unpaid paternity pay: £2,830.45
- Loss of pension contributions: £1,221.90
- ACAS Code uplift (10% on £11,911.35): £1,191.14
- Total: £20,446.49
Lessons & takeaways
- If you acquire a business via TUPE, you must honour all pre-existing contractual rights, including approved leave arrangements, unless you have a clear legal basis to vary them.
- Threatening disciplinary action for absence that was pre-approved by the previous employer is likely to be seen as a fundamental breach of contract.
- Withholding pay without proper justification can be an unlawful deduction of wages and may also support a constructive dismissal claim.
- Employees who resign in response to a serious breach of contract should do so promptly to avoid being seen as having affirmed the contract.
What this case shows in practice
This case highlights the risks that arise when a TUPE transfer takes place while an employee is on a pre-approved period of leave. The claimant, a senior store manager with 11 years' service, had arranged eight weeks of paid paternity leave with his original employer, Vodafone. Shortly after the transfer to Credentia Foods Ltd, the new employer refused to pay the full entitlement, claiming only two weeks were contractually due, and began disciplinary proceedings for unauthorised absence.
The tribunal found that Credentia Foods was fixed with Vodafone's knowledge that the leave had been properly booked and not cancelled. By withholding pay and threatening discipline, the respondent acted in a way that was calculated to destroy the trust and confidence essential to the employment relationship. The claimant's resignation in December 2021 was therefore a response to a repudiatory breach, making it a constructive dismissal.
What the losing side could have done differently
Credentia Foods could have avoided this outcome by simply honouring the leave arrangements that were in place at the time of transfer. If they had concerns about the length of leave, they should have raised them with Vodafone before the transfer or sought legal advice on their obligations. Instead, they chose to challenge the employee's entitlement and escalate the matter to a disciplinary hearing, which the tribunal described as unreasonable.
A more collaborative approach – such as contacting Vodafone to verify the leave approval, or at least pausing the disciplinary process while the employee provided evidence – would have been far more likely to be considered within the range of reasonable responses.
Why the result matters for similar claims
This decision reinforces that TUPE transfers do not give the new employer a blank cheque to disregard existing contractual rights. Employees who are on family leave at the time of a transfer are particularly vulnerable, and tribunals will scrutinise any attempt to withdraw agreed benefits or treat the employee's absence as unauthorised.
For employees considering a constructive dismissal claim, this case shows that a series of actions – not just one incident – can cumulatively amount to a fundamental breach. The ACAS Code uplift of 10% also serves as a reminder that employers who fail to follow proper procedures may face increased compensation.
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