General Manager's constructive dismissal claim fails but holiday pay awarded
A General Manager with 13 years' service resigned claiming constructive dismissal after a dispute over a promised reward for a business sale. The tribunal rejected his claim but awarded £326.41 in unpaid holiday pay.
1 min read · Last updated 19 May 2026
Case details
- #constructive-dismissal
- #holiday-pay
- #employers-contract-claim
- #sale-of-business
- #suspension
- #repudiatory-breach
Key facts
- The claimant was employed as General Manager from 9 March 2009 until his resignation on 28 May 2022.
- The respondent's managing director, Jon Hall, proposed selling the business and promised to reward the claimant financially.
- The claimant received a £15,000 payment in two instalments in October and November 2021, which the tribunal found was an unconditional gift.
- The claimant was suspended on 19 April 2022 following a meeting where he demanded £100,000 by Easter and implied staff would leave.
- The claimant resigned on 28 May 2022 after a meeting at a golf club where he made unrealistic demands.
- The tribunal found the claimant was not constructively dismissed but was owed £326.41 in unpaid holiday pay.
Timeline
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Employment commenced
Claimant started work as a technician, later promoted to Operations Manager and General Manager.
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Sale of business discussed
Jon Hall informed the claimant he was considering selling the business and would look after him financially.
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Meeting in York
Claimant and Hall discussed heads of terms for a reward package, including a £60,000 payment at sale and a two-year rolling contract.
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First £7,500 payment
Claimant received £7,500 as part of a £15,000 goodwill payment.
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Second £7,500 payment
Claimant's wife Victoria received £7,500, completing the £15,000 payment.
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Covertly recorded conversation
Claimant recorded a call with Hall discussing a £60,000 payment at sale and £40,000 after one year.
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Radisson Blu meeting
Claimant became abusive, threatened Hall, and accused him of disloyalty.
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First draft contract
Respondent sent a draft contract with a fixed term and post-termination restrictions.
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Second draft contract
Draft included £60,000 and £40,000 payments on sale, but claimant did not send it to his solicitor.
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Meeting at claimant's home
Claimant demanded £100,000 by Easter and implied staff would leave; Hall felt threatened.
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Claimant suspended
Hall suspended the claimant pending investigation for misconduct.
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Victoria Southern incident
Claimant's wife confronted Hall in front of staff, leading to her suspension.
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Golf club meeting
Claimant made unrealistic demands including £50,000 credit line and £40,000 car; Hall felt intimidated.
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Claimant resigned
Claimant resigned with immediate effect, citing constructive dismissal.
The legal issue
The tribunal had to decide whether the employer's actions, including suspending the claimant and failing to honour promises of financial rewards, amounted to a fundamental breach of contract entitling the claimant to resign and claim unfair constructive dismissal.
The outcome
The tribunal dismissed the claimant's complaints of unfair constructive dismissal and wrongful dismissal. The claimant was not constructively dismissed because the employer's conduct did not breach the implied term of trust and confidence.
The tribunal found that the £15,000 payment was an unconditional gift, not a retention bonus, and the employer's counterclaim for repayment also failed.
Compensation:
- Unpaid holiday pay: £326.41
Lessons & takeaways
- Constructive dismissal claims require a fundamental breach of contract by the employer — a disagreement over bonus terms is unlikely to suffice.
- Suspension pending investigation is not automatically a breach of trust and confidence if there are reasonable grounds.
- Keep clear records of any agreements about financial rewards — oral promises can be difficult to enforce.
- Holiday pay must be paid on termination even if the resignation is not accepted as a dismissal.
A dispute over promised rewards leads to resignation
This case shows how a breakdown in the relationship between a long-serving manager and his employer over a promised financial reward can lead to a resignation — but not necessarily a successful constructive dismissal claim. The General Manager, who had worked for the company for 13 years, believed he was entitled to a substantial payment when the business was sold. When the deal did not materialise as expected, he made increasingly aggressive demands, leading to his suspension and eventual resignation.
The tribunal found that the employer's managing director had made promises to 'look after' the claimant, but those promises were not legally binding. The £15,000 paid to the claimant was an unconditional gift, not a retention bonus. The claimant's demands for £100,000 and his threats that staff would leave were unreasonable, and the employer's suspension was a reasonable response.
What the employer could have done differently
The employer could have avoided the dispute by putting any reward package in writing from the outset, with clear conditions. The managing director's informal promises created expectations that were not met. However, the tribunal accepted that the employer acted reasonably in suspending the claimant after he made threats, and in not agreeing to his escalating demands.
Why this matters for similar claims
This case is a reminder that constructive dismissal is a high bar — the employer's conduct must be so serious that it goes to the root of the contract. A disagreement over bonus terms, even where promises were made, does not automatically amount to a breach of trust and confidence. Employees who feel let down by broken promises should consider whether the employer's conduct is truly repudiatory before resigning. The award of holiday pay, though small, shows that employers must still pay all sums due on termination, regardless of the circumstances of the resignation.
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