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Undermined Estate Agent Unfairly Dismissed

A senior estate agent, who was moved from a lucrative area manager’s post to take charge of a number of unprofitable ‘graveyard’ offices, has succeeded in an unfair dismissal claim – but will not receive as much compensation as he had hoped for.

The man’s income was directly linked to the profitability of the branches he managed and his move had led to a reduction in bonuses due to him. However, as he was ‘an honourable and trusting man’, he had relied upon his boss’s promise that he would not lose out financially in the end.

However, that promise was not kept, nor were assurances relating to his healthcare and pension benefits. The man was subsequently moved again to a more junior role as manager of two branches. He felt so undermined and unsupported by his boss that he ultimately resigned, considering his position untenable.

In ruling that he had been constructively dismissed unfairly, an Employment Tribunal (ET) found that his boss had fundamentally breached the implied term of trust and confidence in a way that went to the root of the employment relationship.

The ET assessed the man’s compensation on the basis of the higher earnings he had enjoyed in his original role as area manager of a number of successful branches. It also awarded him damages for breach of contract.

However, in allowing the employer’s appeal, the Employment Appeal Tribunal (EAT) found that the ET had no power to make an award of damages for breach of contract when the man had neither raised nor pursued such a claim.

Noting that he had been moved from the area manager’s role more than four months before his resignation, the EAT also found that the man’s compensation ought to have been based on the lower salary he was earning at the time of his departure. The case was sent back to the ET for the man’s award to be reassessed.