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Suing employee for breach of contractBack

“I have an employee, John Smith, who walked out of the office on Monday of last week having cleared his desk and removed all his possessions.  Next day we received a letter saying that he had resigned with immediate effect. His employment contract states that he has to give us 3 months notice. 

We have made enquiries and there was absolutely no reason for him to walk out without giving the requisite notice period.  We suspect he has found alternative employment and wants to join his new employer as soon as possible.

Is there anything we can do?”

The first thing to establish is whether he was legally entitled to walk out without giving the contractual 3 months’ notice.

The only basis upon which he could resign with immediate effect would be if he could establish that the employer had fundamentally breached his contract of employment.   It is important to remember that this is an objective test, i.e. would a reasonable person fully aware of the facts, think that the employer had breached the contract of employment.

Contrary to popular belief this is quite a difficult hurdle for the employee to establish.   The employee has to show that the employer has done something fundamentally wrong in order to establish a breach.  Thus minor issues would not be sufficient.

In these circumstances on the facts of this case, the employee as a matter of law should have given 3 months contractual notice.

The employer therefore is entitled to sue the employee for damages for the failure to abide by the employment contract terms.   Damages would normally be either losses incurred by the employer in terms of extra locum costs, or indeed damages for loss of business or reputational damage. The burden would be on the employer to establish the extent of damages.

Don’t forget, this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.

Motor Industry Legal Services

Motor Industry Legal Services (MILS Solicitors) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.

Posted by Sue Robinson on 19/01/2018