In the latest of an ever increasing number of cases involving football clubs, the High Court has recently had to consider whether an assistant manager was entitled to claim for breach of his contract where he had previously suggested that he would be prepared to negotiate a termination package.
The case acts as a warning to employers not to marginalise employees, even if the employee probably doesn’t want to remain in their employment anyway…
Gibbs V Leeds United Football Club
Mr Gibbs was employed by Leeds United Football Club as assistant manager commencing his employment in 2013 on a fixed term contract due to run until 30 June 2016. Mr Gibbs came to the club as assistant manager underneath Brian McDermott (manager) having previously worked with him at Reading Football Club. It is fairly common in league football that when a new manager is appointed, they bring with them an assistant manager and other backroom staff. It is also common for such staff to have fixed term contracts to guarantee the incoming staff a period of pay in what can be an uncertain sector.
On 31 May 2014 Brian McDermott left his post as manager of Leeds United. Mr Gibbs met with the club’s owner on 2 June 2014 and although Mr Gibbs expected that he would also be asked to leave, the owner told him that he wished Mr Gibbs to remain. As part of this meeting, it was discussed whether Mr Gibbs might be interested in becoming the head coach of the club but he made it clear that he would not be interested.
The court found that it was clear that Mr Gibbs would happily leave his position if a suitable termination package was put to him but he was told by the club’s management that he was expected to return to work at the training ground, despite it being post-season when players were on holiday and typically he would have been as well. Mr Gibbs held discussions with the club’s owner, telling him that “there was a deal to be done” rather than coming back to work when there really wasn’t any work at that stage of the season. Ultimately no deal was arrived at.
Thereafter, Mr Gibbs was not included on the list of staff flying to Italy with the first team for pre-season training in July, as would normally be expected of an assistant manager. He was instead told that he could look after the first team players not travelling to Italy, but there weren’t any. Mr Gibbs had also been told that he could undertake cleaning work at the training ground. Matters got worse when a new manager was appointed and Mr Gibbs did not enjoy a happy relationship with him. Matters came to a head on 23 July 2014 when Mr Gibbs was told that he was to have no contact or involvement with the first team and his role would be confined to working with the under 21s, under 18s and other non-first team players. A day later he was told by the new manager that he was not have any contact with the first team, with the new manager confessing that he didn’t want Mr Gibbs at the club at all.
Perhaps unsurprisingly, Mr Gibbs resigned with immediate effect on the 26 July 2014 claiming that the club had breached his contract of employment through their actions. Mr Gibbs brought a claim for breach of contract in the High Court.
The High Court had to assess firstly whether Mr Gibbs had committed any breach of his contract by suggesting that he would happily part company if terms could be agreed. The court found that merely raising the prospect of an amicable termination was not a breach. It was irrelevant that Mr Gibbs had initiated such discussions, as throughout those discussions he had remained ready and willing to fulfil his duties.
Next, the High Court had to consider whether the club had committed a repudiatory breach of Mr Gibbs’ contract of employment. The court found that when he was marginalised and told he was no longer going to be allowed to fulfil his role in a meaningful way, he was entitled to consider that the club was in breach of contract and resign in response to it.
The employer in this case tried to argue that Mr Gibbs could not claim breach of contract, as he had already breached it by suggesting that he would be amenable to a termination package.
The Court rejected this argument. The important thing for employers to take away from the case is that in situations where an employee is less than happy and looking for the exit door, in the absence of amicable terms for termination, employers should make sure that they treat the employee as they would any other and in accordance with their contract of employment.
Whilst it can be difficult to maintain relations, employees in such situations should not be marginalised or singled out for unfair treatment as it can give them an opportunity to resign and claim constructive dismissal.
If you have any questions in relation to breach of contract or any other employment law/HR query, please contact Joanne Holborn, Tom Scaife or Caroline Rayner on 01228 552600 or 01524 548494.