Veitch Penny LLP - Exeter | Crediton, Devon

Case

Anthony Bundy & Associates v Bewer & Boxwell

Issues

(1) Contract of Employment
(2) Non-payment of Arrears of Salary
(3) Fundamental Breach of Employment Contract

Facts

The Defendants Contracts of Employment were terminated and they claimed for:

(i) Constructive Dismissal
(ii) Arrears of Salary
(iii) Payment of a loan allegedly made by them to the Claimant
(iv) An investigation and account in relation to alleged pay arrears based on a percentage of profits.

The Claimant had in fact withdrawn the claim but they were proceeding on their counter-claim and in his defence, the Claimant contended that the Contracts of Employment had been varied in correspondence in respect of remuneration, so that no arrears were due and owing to the Defendant.

Decision

There was never any concluded variation in relation to the Defendants' Contracts of Employment so far as remuneration was concerned. However despite the Claimant omitting to pay their salaries, this was tolerated by the Defendants and it was held therefore not to be an operative factor amounting to a fundamental breach of contract.

The Defendants were understandably dissatisfied with their employment, but there was no constructive dismissal in either case.

Upon the evidence it was held that the Defendants had made a loan to the Claimant that they were entitled to have repaid to them with interest and there was to be an account and enquiry into the issue of profit related pay, and payment on all monies due and owing from the Claimant to the Defendants.

Comments

This case goes to show that the non-payment of salary would not amount to a fundamental breach of an employment contract in circumstances where it was tolerated by the employee and as would not constitute grounds for a successful case of constructive dismissal. Employees would need to put the Employer on some form of notice that continued non-payment of salaries was an intolerable position for them to be in, to do so.

Compiled by Peter Taylor