Late payment of wages is a fundamental breach of contract

The co-founder and chief executive of a charity accessed and deleted a colleague’s letter of complaint against her and repeatedly failed to pay staff on time during a period of “utter confusion”, a tribunal heard. This resulted in a £20,000 award made to an employee who claimed constructive, unfair dismissal.

The charity supports children, young people, families and carers affected by disability or a barrier to learning, and the Claimant was a staff welfare officer. He claimed constructive dismissal for a number of reasons, including the CEO’s treatment of a colleague, and repeated failure to pay him and other staff on time.

The incident that sparked the chain of events leading to the tribunal occurred when the CEO emailed a third party to accuse an employee of stealing from the charity’s shop. As staff welfare officer, the Claimant supported the accused employee during the investigation.  He had started to compose a letter in support of the accused employee but later that week he opened his work shared drive to finalise the letter and discovered that the text in the letter had been deleted. The Tribunal concluded that the CEO had accessed the account and deleted the content as her name was on the document version history as having most recently accessed it.

The Claimant submitted a grievance, comprising concerns about the CEO’s treatment of the employee accused of theft, late payment of wages and breach of trust and confidentiality by accessing private documents. He received no response and resigned, claiming constructive dismissal and cited the late payment of wages. The tribunal found that he had been paid late on four occasions and that this was a fundamental breach of contract in its own right. The tribunal concluded that the Claimant had been constructively dismissed.

This case is important because the late payment issue was not at the heart of the original claim -the alleged unfair treatment of a colleague and accessing private documents were the incidents which really mattered to the Claimant. But the findings of the tribunal were that the organisation was chaotic and badly run, resulting in wages being delayed and incorrect and this is what led to the fundamental breach of contract.

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