Mr Gibbs was employed by Leeds United Football Club Ltd as Assistant Manager. Following the departure of the Manager, Mr Gibbs was asked if he was interested in the Manager vacancy. He told them that he was not interested. Nonetheless Mr Gibbs was told that the club would like him to stay on. He was called back to work at a time when there was little work to be done (post-season) and when he would usually expect to be on holiday. He was not invited to join the team on pre-season in Italy (something which would ordinarily form part of his duties). Mr Gibbs approached the club and indicated that he was willing to consider an exit package if a suitable agreement could be reached. The parties were too far apart and discussion bore no fruit.
A new manager was appointed. He and Mr Gibbs did not see eye to eye. Mr Gibbs repeatedly turned up for work and was ready and willing to work. He was not assigned any work pursuant to his contract. He was excluded from training sessions. He was not invited to a staff meeting, which he would ordinarily have been so. He was even told on one occasion by the chairman that he could do some cleaning work. Mr Gibbs subsequently received a written communication from the club stating that he was to have no contact with the first team and that he would work with the under 18 and under 21 players. In response, he resigned with immediate effect.
Mr Gibbs argued that this was a repudiatory breach of contract by the employer – it was a plain loss of status. He pursued a claim in the High Court seeking damages for his lost wages. The court found in his favour. Interestingly, the court repelled a suggestion that Mr Gibb’s initiation of settlement discussions was a repudiation of contract by him. This did not frustrate his claim which was predicated upon the employer’s breach of contract. He was awarded substantial damages (Gibbs v Leeds United Football Club Ltd).
Employers should be aware that settlement discussions can be used to grasp the nettle with a problem employee. However, care should be taken when initiating such discussion as there are different types of discussion which can apply depending on the circumstances. Employers should always take advice when dealing with settlement discussions with an employee to prevent these discussions from being relied on in court at a later date.