Sales executive constructively dismissed after unfounded allegations and withheld commission

This case illustrates how a breakdown in trust and confidence can arise when a new manager imposes a heavy-handed approach without following proper procedures. The claimant, a sales executive with nearly three years' service and a clean disciplinary record, found himself subjected to a series of actions by the managing director that the tribunal described as intended to intimidate and assert authority.

What went wrong

The managing director, Mr Johnson, introduced a new disciplinary policy but then failed to follow it. He issued a written warning for a minor logbook issue without proper process, and later ambushed the claimant in a meeting to issue a final written warning for dishonesty – allegations the tribunal found to be unfounded. Mr Johnson also repeatedly threatened to sack the claimant and withheld commission payments without justification. The tribunal concluded that this conduct was calculated to destroy the relationship of trust and confidence.

What the employer could have done differently

Forest Master Limited could have avoided this outcome by following its own disciplinary procedure, giving the claimant a fair opportunity to respond to the allegations, and not making threats of dismissal. The commission payments should have been paid or at least properly explained. A fair and transparent process would have preserved trust and confidence.

Why this matters

This case is a reminder that constructive dismissal claims can succeed when an employer's conduct, taken as a whole, makes continued employment untenable. For employees, it shows the importance of documenting treatment and resigning promptly after a breach. For employers, it underscores that even small businesses must follow fair procedures and avoid conduct that undermines trust.