Ms S MilfordClaimantOcean Hill Lodge LtdRespondent
Before
Employment Judge M HallenMr E. Lowe - Trade Union Representative for claimantMs. B. Oguntala - Director for respondentDate 31 March 2026
JUDGMENT
This has been a remote hearing which has not been objected to by the parties. The form of remote hearing was by Cloud Video Platform. A face-to-face hearing was not held because the relevant matters could be determined in a remote hearing. The judgment of the Tribunal is that: -[1]The Claimant’s claims for contractual sick pay, holiday pay, itemised pay slips and notice pay are dismissed upon withdrawal.[2]The Claimant’s claim for unauthorised deduction of wages with respect to annual bonus for 2024 for £2,000 gross and occupancy bonus for June, July and August 2024 for £1,500 succeeds. The Respondent is ordered to pay the Claimant £2,000 less tax for the performance bonus and £1,500 less tax for the occupancy bonus.[3]The Claimant’s claim for unfair constructive dismissal is made out and succeeds.[4]The remedies hearing to assess the level of compensation for the constructive dismissal is listed for 19 June 2026.[5]Directions will be sent out separately in respect of preparations for this hearing. It is hoped that the case can be resolved without the need for a remedies hearing based on the guidance given to the parties in this judgment.
REASONS
[1]The Claimant was employed by the Respondent, owner of a care home, as a Care Manager, from 9 September 2019 until 1 November 2024. Early conciliation started on 31 January 2025 and ended on 28 February 2025. The claim form was presented on 28 March 2025.[2]At the hearing before me the Claimant withdrew her holiday, sick pay claim and itemised wage statements claim which were dismissed upon withdrawal. The Respondent was represented by Ms. Oguntala who is a director of the company. At the outset of the hearing, the Respondent confirmed that the care home ceased trading and closed down on or around 16 May 2025. Receivers were appointed on 22 May 2025 and are acting for the bank in respect of the freehold of the property of the care home at 4-6 Trelawney Rd, Newquay, Cornwall. Ms. Oguntala has obtained authority from the Receivers to represent the company in respect of these proceedings and to give evidence. The Claimant confirmed that she wished to proceed with the claim in these circumstances and that it was a matter of principle even though there may be difficulties with her recovering compensation were she to succeed.[3]This claim had come before Employment Judge Othen on 6 August 2025 when the judge confirmed that the Claimant was required to obtain authority from the Receivers to act for the company that she has now done. The judge also set out the legal claims and list of issues for me to determine at this hearing as the hearing could not proceed at that time as the Respondent had no authority from the Receivers.[4]For the purposes of the hearing before me, the Claimant alleged that Ms. Oguntala took over as a director of the Respondent company in January 2024 and that on 26 January 2024, a new contract of employment was agreed between her and Ms. Oguntala. She alleged that a hard copy of this contract was signed on or around 26 January 2024 when Ms. Oguntala visited the Ocean Lodge Care Home. She alleged that this contract included terms entitling her to an annual performance bonus and a monthly occupancy bonus. The Claimant alleged that she was off sick from 7 October to 28 October 2024 and that she was not paid her contractual sick pay for this period. She further alleged that from September 2024 onwards, Ms. Oguntala made various unfounded accusations against her and did not pay her contractual pay or at least threatened not to do so. On 1 November 2024, the Claimant alleged that Ms. Oguntala emailed her to inform her of her intention to give the Claimant one month's notice of termination of employment and that her last day of employment would be 1 December 2024. In response to this, the Claimant resigned with immediate effect. In addition to her claim of constructive unfair dismissal, the Claimant brought claims of unlawful deductions from earnings in respect of unpaid annual bonus for 2024 and unpaid occupancy bonus. The parties agreed that the Claimant's effective date of termination was 1 November 2024.[5]The Respondent for her part asserted that the contract signed by the parties on 26 January 2024 was not a valid contract as Ms. Oguntala was unaware of the terms relating to an annual performance bonus and a monthly occupancy bonus. Ms. Oguntala had been informed by way of email that the contract which she signed on 29 January 2024 contained different terms to the ones relied on by the Claimant. The Claimant resigned on 1 November 2024 and was not constructively unfairly dismissed. The Claimant had no contractual entitlement to the annual performance bonus and the occupancy bonus.[6]The issues for me to determine in respect of the constructive unfair dismissal were: - Was the Claimant dismissed? In answering this question I had to answer the following questions : Did the Respondent do the following things (paragraph numbers refer to the particulars of claim): 1. criticised how the Claimant ran its care home (paragraph 13); 2. refused to pay her bonuses (paragraph 13); 3. made allegations of dishonesty (paragraph 15); 4. failed to pay company sick pay (paragraph 19); 5. hinted that her salary would not be paid (paragraph 20); 6. threatened to deduct staff wages from the Claimant's salary (paragraph 21); 7. suggested that the Claimant should resign and complained about her salary (paragraph 23); 8. casted doubt on the employment relationship and suggesting it be dissolved (paragraph 24); 9. casted doubt on its ability to pay the Claimant's salary (paragraph 25); 10. attempted to justify the Claimant doing "wrong", pitting staff against the Claimant, again complaining about her salary, and indicated notice of termination of employment on 1 November 2024 (paragraph 26).[7]Did that breach the implied term of trust and confidence? The Tribunal will need to decide: 1. whether the Respondent behaved in a way that was calculated or likely to destroy or seriously damage the trust and confidence between the Claimant and the Respondent; and 2. whether it had reasonable and proper cause for doing so; and/or 3. Did that breach any other contractual terms? 4. Was the breach a fundamental one? The Tribunal will need to decide whether the breach was so serious that the Claimant was entitled to treat the contract as being at an end. 5. Did the Claimant resign in response to the breach? The Tribunal will need to decide whether the breach of contract was a reason for the Claimant’s resignation. 6. Did the Claimant affirm the contract before resigning? The Tribunal will need to decide whether the Claimant’s words or actions showed that they chose to keep the contract alive even after the breach.[8]What was the reason for the breach of contract/dismissal? 1. Was it a potentially fair reason? 2. Did the Respondent act reasonably or unreasonably in all circumstances, including the Respondent’s size and administrative resources, in treating that reason as a sufficient reason to dismiss the Claimant? The Tribunal’s determination whether the dismissal was fair or unfair must be in accordance with equity and the substantial merits of the case. In this case, the Respondent asserted that the reason for dismissal was misconduct at the Claimant as the Care Home Manager did not run the home properly leading to a ‘woeful’ CQC report received by the Respondent following an inspection by CQC inspectors between 7 to 14 November 20204 shortly after the Claimant’s resignation on 1 November 2024. The Respondent received the full CQC report on or around the end of December 2024. At the hearing the parties were invited to make submissions in respect of a ‘Polkey’ reduction in compensation as the Respondent had asserted that the Claimant would have been dismissed for serious misconduct shortly after receipt of the CQC report.[9]Employment Judge Othen set out the legal claims in respect of the unlawful deduction from wages comprising the Respondent’s failure to pay an annual performance bonus for 2024 amounting to £2,000 gross and a monthly occupancy bonus for June, July and August 2024 amounting to £1500 gross. I had to determine if these were agreed to be paid by the Respondent in respect of the contractual changes made to the Claimant’s contract of employment in or around January 2024.[10]I had before me an index for an agreed bundle of documents made up of 7 pages, an agreed bundle of documents made up of 276 pages, the Claimant’s witness statement made up of 12 pages, a witness statement from the Claimant’s witness Ms. Lennie Walker made up of 3 pages, and a witness statement from Ms. Oguntala made up of 7 pages attaching the CQC report. During the course of the proceedings the Respondent made an unopposed application to submit to the Tribunal a separate Respondent bundle made up of 111 pages that also repeated a copy of the CQC report. The Respondent did not object to going first so I heard evidence from her. I then heard from the Claimant and then from Ms. Walker. The witnesses were subject to cross examination and questions from the Tribunal. I reserved my judgement at the conclusion of the liability hearing and confirmed that if the Claimant was successful, I would list a remedy hearing for 19 June 2026 and send directions to the parties to prepare for it. Those directions have gone out to the parties separately.
Facts
[11]On 9 September 2019, the Claimant was employed by Ocean Hill Lodge Limited as a Care Manager and her role was effectively to manage and run the care home. She managed a team of 22 staff towards the end of her employment. At the time she started employment she was paid £39,519,69 per annum and worked 40 hours per week.[12]On 22 July 2020, the Claimant was interviewed by the Care Quality Commission (CQC) and achieved Registered Manager status. The Respondent company provided residential care activities for the elderly and disabled. Mr. and Mrs. D were the owners of the care home at the time the Claimant was employed.[13]Around June 2023, Mr. and Mrs. D informed the Claimant that they would be selling the care home. The new buyer of the care home was Ms. B. Oguntala. The Claimant supported all parties involved in the sale by completing the necessary documents and providing the necessary information to the solicitors and accountants representing the parties in the sale.[14]On 17 November 2023, the Claimant attended an interview for the position of a Registered Manager at a different care home. She was successful in her interview and was offered the position, but she wanted to think about it carefully before accepting the role. On 23 November 2023, the Claimant decided that she would not continue to work at Ocean Hill Lodge. She accepted the offer of the new role she was interviewed for on 17 November 2023. The Claimant agreed to complete a handover to Ms. Oguntala or a new manager and support the care home over the Christmas period until she started her new role. Her new role was to start in January 2024.[15]On 15 December 2023, Ms. Oguntala visited the care home for a meeting with Mrs. D. This was the first time the Claimant met Ms Oguntala. After the meeting, the Claimant showed Ms. Oguntala around the care home. Ms Oguntala wanted to speak to the Claimant to ask her to stay. The Claimant explained that she had been offered a new position and that she would be deregistering with the CQC. Ms. Oguntala asked the Claimant what she would accept to stay at Ocean Hill Lodge. The Claimant explained that she had been offered an annual salary of £55,000, with an annual performance bonus of £2000. The Claimant also said that she would need her Occupancy bonus of £500 (which had been put in place by Mr. D very recently). Ms. Oguntala asked the Claimant what would be the lowest that she would accept to stay. The Claimant replied £50,000, and her bonuses as specified above. Ms. Oguntala agreed to this.[16]The new agreement was evidenced by the updated contract of employment dated 26 January 2024 which was signed by the Claimant and Ms. Oguntala. The sale of the care home to Ms. Oguntala, was completed in December 2023. At the hearing, Ms. Oguntala disputed that the contract was valid. I did not accept her evidence. I preferred the evidence of the Claimant as set out above. Ms. Oguntala confirmed that she was inexperienced in the care home industry and would be an absentee owner for the most part. She needed someone that could run the home in her absence, and the Claimant was the ideal solution for her. Therefore, I find that it was highly likely that Ms. Oguntala would have agreed to the new terms that were signed by the Claimant and her on 26 January 2024. This contract included an increased salary of £50,000 per annum, an annual bonus of £2,000 and a full occupancy bonus of £500 per month.[17]From January 2024 onwards, the Claimant’s working relationship with Ms. Oguntala was good. The staff were settled, and the home was not disrupted by the change of ownership. Ms. Oguntala was positive and encouraging to the staff. Ms. Oguntala made some positive changes to the home including clearing the home of some clutter and work on fire inspection. The pair shared WhatsApp messages where Ms. Oguntala praised the Claimant for her hard work and thanked her for her help. Ms. Oguntala was focused on the finances of the care home and how the home could increase the fees of the residents. Unfortunately, Ms. Oguntala had signed a contract that limited the Respondent to what it could charge. As a consequence, every month Ms. Oguntala started to worry about the bills, wages, and invoices. As an absentee owner of a business that she had no experience with, she was beginning to realise that income had to exceed expenditure to realise a good profit. The Claimant was not involved with the finance side of the business apart from dealing with personal spending invoices and private residents’ invoices. Ms. Oguntala was responsible for dealing with the business’s finances. The Claimant as the registered manager was focused on the management and daily running of the care home. Ms. Oguntala and the Claimant would have weekly WhatsApp (video calls) on Wednesdays to discuss general concerns and how the pair could improve the care home.[18]Ms. Oguntala continued to comply with the terms under the new and signed updated contract of employment. On 30 April 2024 and 31 May 2024, Ms. Oguntala paid the Claimant her full occupancy bonus of £500 for each month as well as her increased salary.[19]On 27 July 2024, as the Claimant was about to board a plane to Crete for vacation, she received a WhatsApp message from Ms. Oguntala, informing her that she could not pay her occupancy bonus of £500. No reason for this was given and the Claimant thought that this was unfair. She had worked hard for each of her bonuses. She had no prior warning, and the occupancy bonus was going to be part of her holiday spending money. This was all the Claimant thought about on the plane, and it had upset her.[20]Upon returning from her vacation to work, Ms. Oguntala was friendly at first, but after a short while she was annoyed about the business’s finances. When the pair had their WhatsApp meeting that Wednesday, the Claimant mentioned the message that she received regarding her occupancy bonus and Ms. Oguntala said that she would not be paying it. Ms. Oguntala went on to say that she believed that Mr. D had lied to her when selling the care home to her. She threatened to take Mr. D to court and that she would fight him the whole way. The Claimant tried to explain to her that she was on a lower salary when employed by Mr. and Mrs. D, but Ms. Oguntala had agreed to the higher salary and bonuses to stop the Claimant moving to another job. Ms. Oguntala was visibly angry and annoyed that the Claimant had mentioned this. The Claimant tried to reason with Ms. Oguntala and compromise without any success. The call ended very abruptly after this. This left the Claimant really shocked as she had never seen this side of Ms. Oguntala before. She felt uneasy and started to feel sick. From that meeting onwards the pairs relationship changed drastically. Ms. Oguntala installed a clocking-in machine at the home. Every day the Claimant would receive emails and messages to ask her why someone had not clocked in or out. The calls, emails and messages were becoming overwhelming for the Claimant.[21]On 2 September 2024, the Claimant emailed Ms. Oguntala to ask her for a face-toface meeting to discuss finances with herself and her deputy to try and explain the need for care hours and staff hours to match and to explain the Rota and contract staff hours. This meeting was held as part of the pairs weekly Wednesday calls. The Claimant was not convinced that Ms. Oguntala understood what was being discussed as she said, ‘’OK I see’’.[22]On 19 September 2024, the Claimant was the manager/senior on duty. The home unfortunately had a resident that was at the end of her life, and the Claimant was with her and her husband when she passed. The Claimant had to ensure that her wishes were carried out and support the family and staff. Immediately after, the home had another resident that had an emergency and needed an ambulance and hospital admission. Again, the Claimant dealt with this. She then received a phone call from the fire inspector, who was giving her feedback on his follow up inspection (first inspection was in December 2023). The fire inspector was happy with the progress that the care home had made. More work was needed but he was happy to call the home in a few months and provide support. The fire inspector informed the Claimant that he had emailed Ms. Oguntala. While on the call, the inspector told the Claimant that Ms. Oguntala had responded to him confirming that no work would be conducted until the new year due to financial constraints.[23]Straight after the phone call, the Claimant received an email from Ms. Oguntala that the Claimant took to imply that it was the Claimant’s fault that more work needed to be carried out at the home due to the fire inspection when Ms. Oguntala thought the home was safe. Due to this, the Claimant felt that no matter what she did, Ms. Oguntala was going to continue to be critical of the Claimant. The Claimant was doing her job as she had always done.[24]On 2 October 2024, Ms. Oguntala sent the Claimant an email stating that she had concerns about how the Claimant ran the care home. She also mentioned that the Claimant did not appear to be happy at the home even though she was earning £13,000 more than everyone else saying that the Claimant’s behaviour had changed after Ms. Oguntala had refused to pay the annual bonus and occupancy bonus. Ms. Oguntala said, ‘just think of everything that has gone wrong in the home since then.’ This email came across as threatening to the Claimant as she wrote that “it is all in writing in case it escalates”. The Claimant sent an email in response, seeking clarification on what she meant by her behaviour had changed and what had gone wrong in the care home on the same date. Ms. Oguntala subsequently sent the Claimant on the same day alleging that dishonesty was going on in the care home. She stated in her email ‘Do you think you can run the Home as you Iike’. She also stated, ‘We do not have to work together if you are not happy with the Home’.[25]On 3 October 2024, the Claimant responded to Ms. Oguntala’s email regarding the dishonesty allegation. The Claimant mentioned that she worked on 100% trust and all staff under her understood this. The Claimant stated that Ocean Hill Lodge had been her passion over 5 years and she worked very hard to ensure that all residents were cared for. Without being specifically accused of anything, the Claimant responded to Ms. Oguntala about how she felt that the home had been performing well with regard to staff contentment, occupancy rates and compliments from resident’s families. She asked Ms. Oguntala to provide her with an agreed way of working that would satisfy the owner moving forwards or alternatively arrange a meeting to discuss this plan.[26]Between 7 to 28 October 2024, the Claimant was signed off work for 3 weeks due to Pancreatitis/Infection. She was admitted to the hospital twice. During this time at the hospital and being off sick, Ms. Oguntala sent her some supportive messages, checking that she was doing well. There was no indication that she was unhappy with the Claimant.[27]On 22 October 2024, while the Claimant was still on sick leave, Ms. Oguntala sent her a WhatsApp message questioning the Claimant’s salary and sick pay. The Claimant responded to Ms Oguntala stating that her salary and sick pay was in her contract. At this point the Claimant thought the criticism was going to start all over again. Ms. Oguntala asked for the Claimant’s sick notes which the Claimant sent over to her. The Claimant found herself having to apologize for being ill. This made her anxious and full of dread. As a consequence, the Claimant returned to work a week earlier due to being worried that Ms. Oguntala would become angry.[28]On 29 October 2024, Ms. Oguntala sent the Claimant an email reminding her to chase for fees as salaries could not be paid. On 30 October 2024, the Claimant emailed Ms. Oguntala at the beginning of her shift as she was working on the floor, to request an agency worker to provide cover for that weekend. Ms. Oguntala replied to her email stating that the Claimant must confirm that there would never be an overlap of staff on shifts as this meant Ms. Oguntala would have to pay for two sets of staff during the overlap period. Ms. Oguntala stated the number of staff she wanted on shift. If the Claimant did not confirm that she would do this, the wages of the overlapped staff would be taken out of the Claimant’s salary. At this point, the Claimant was trying to work on the home’s floor. She had the medication to do. The Claimant felt that Ms. Oguntala would not support her or the home to fill the gaps in staffing. When she read this email from Ms. Oguntala, she felt unwell as she felt she was being blamed for the occasions when there was a need to have an overlap in staffing on shifts. Ms. Oguntala was threatening to make deductions from her salary if this continued to happen. This was when everything came to a head. The Claimant could take no more. She stood on the second-floor office leaning over the medication cabinets and started to cry. A staff member Lennie Walker came in and put her arm around the Claimant. Lennie said that she needed to speak to someone about how she was being treated. The Claimant said to Lennie “I don’t know what to do anymore”.[29]Once the Claimant assisted Lennie Walker with a resident, she decided it was time to speak to RH, who was the Quality Assurance officer for the council, as the Claimant believed that the care home felt unsafe to her. At approximately 9:00 am, the Claimant called RH and broke down on the phone to her. RH asked what had happened and the Claimant told her that she was afraid she could not keep everyone safe at the home. She had no cover for the weekend, and she was working so many hours on the floor. RH said that she would speak to her manager SC so they could have a meeting. RH suggested that the Claimant go home as she was in no state to continue. The Claimant said that she had to stay as there was no one that could do the medication.[30]On the morning of 31 October 2024, the next day, RH and her Manager SC arrived for the meeting. As soon as the Claimant saw them, she broke down. The Claimant told them everything that had been happening. The months of micromanaging, working too many hours on the floor every weekend, no support from the owner, constant threats regarding not paying her or the staff’s wages. They both advised the Claimant to contact her union and discuss bullying and harassment. RH told the Claimant that she must look after her mental health.[31]On that same day, Ms. Oguntala sent the Claimant another email questioning the hours that the Claimant had done that day. Ms. Oguntala said in that email that it was very difficult to track the Claimant’s hours as she had not logged out of the system. The Claimant also sent another email to Ms. Oguntala with her hours for that day and for the previous weeks as she had requested. Later on that day, Ms Oguntala sent the Claimant an email stating that due to the difficult months ‘we’ve encountered in the last few months, I think we need to have some difficult conversations about moving on as I am not happy with the work you’re doing’. Ms. Oguntala sent a further email to the Claimant stating that you’re acting like you have to work at Ocean Hill Lodge, if you’re not happy with what I’m saying you don’t have to work there’. Ms. Oguntala again raised the issue of the Claimant’s salary being higher than the other staff and the home was facing extremely difficult financial circumstances. Just as the Claimant was about to start the second shift of the day, Ms. Oguntala sent her a text message stating that it was becoming increasingly difficult to work together and that we should part ways. This text message left the Claimant very stressed and anxious.[32]On 1 November 2024, Ms. Oguntala sent the Claimant an email to chase for fees owed to the care home as there was no money to pay salaries of the junior staff. Ms. Oguntala subsequently sent the Claimant an email on the same day advising that she would not be able to pay the Claimants’ salary due to the high cost of running the care home and that she would keep the Claimant updated. At 18:06 pm on 1 November 2024, Ms. Oguntala sent the Claimant an email ‘I have had a telephone conversation with Sarah and her team and after listening to everything they have said I can confirm things have wrong terribly wrong between us and there's no need for us to continue to work together. We have lost almost £12,000 this month as a result of this in spite of being down by 5 residents. As you're aware I have paying you £13000 above market rate and with this current climate it’s extremely difficult to keep up with such high rates I am happy to give you one month's notice from today 01/11/ 2024 and your last day at the Ocean Hill Lodge will be 01/12/2024. Thanks for your hard work while working at Ocean Hill Lodge.’[33]The Claimant sought advice from the National Employees Union (“NEU”), her trade union representatives. Upon their advice, the Claimant sent her resignation letter to Ms. Oguntala advising that she would be resigning with immediate effect. In her resignation letter she highlighted the reasons for resigning, which included constant threats of dismissal, Ms. Oguntala’s unreasonable/threatening behaviour, breach of contract for failing to pay her occupancy and performance bonus as agreed and subjecting her to mental and physical stress. At 20:43 pm, Ms. Oguntala sent the Claimant an email confirming acceptance of her resignation.[34]Between 7 to 14 November 2024, there was a CQC inspection of the care home and a report of the inspection was presented to Ms. Oguntala on or around the end of 2024. The Claimant confirmed in her evidence that if the care home was found to be poorly run by the CQC it would be the main responsibility of the registered care home manager for this result. It was not disputed by the parties that the Claimant was the registered care home manager of the home until 1 November 2024 and that for the most part she was responsible for the running of the home as Ms. Oguntala was an absentee owner and did not have experience in the care home industry. Ms. Oguntala was reliant on the Claimant to run and manage the home in her absence. Ms. Oguntala was mainly responsible for the finances of the home. The parties did not dispute that the CQC reports conclusions with respect to the care home were poor.[35]The CQC overall rating for the home was inadequate with the conclusion that ‘The service is performing badly and we've taken action against the person or organisation that runs it’. The summary was as follows: - ‘Safe: Inadequate’, ‘Effective: Inadequate’, ‘Caring: Requires Improvement’, ‘Well-led: Inadequate.’ The overall rating was inadequate. The Claimant was asked about taking responsibility for the conclusions of the report at the hearing and sought to blame Ms. Oguntala for the conclusions of the report. I did not accept her evidence in this regard. The Claimant was the registered home manager for the home and responsible for the practices and procedures at the home. Ms. Oguntala was reliant upon the Claimant and was paying her well for running the home well and ensuring all procedures and practices were compliant. The outcome of the CQC report confirmed that the home was not being well run and was inadequate. As the report was prepared shortly after the Claimant resigned a significant amount of the failures in how the home was run must have been down to the Claimant.[36]For example, the report stated that night staff had not had a staff meeting since July 2024. The report stated that ‘information about people was not always up to date or accurate’ and this meant, ‘information shared with other agencies was not reliable.’ ‘Roles and responsibilities were not clearly defined’. ‘Some audits and checks were not taking place’, some issues were longstanding. For example……poor processes for protecting people from the risk of financial abuse’. ‘There were no processes for gathering staff views.’ ‘There was a lack of clear leadership. Staff were unclear about roles and responsibilities’. ‘The service is not well-led’. These are only a sample of examples from the CQC report to support the conclusion that the service was inadequate. Based on the conclusions of the CQC report, I find that as the Claimant was the registered manager of the home for 11 out of the 12 months to which the report applied, she was mainly responsible for the very poor outcome of the report and its conclusions.
Law
[37]Section 95 Employment Right Act 1996 (ERA). (1) For the purposes of this Part an employee is dismissed by his employer if (and, subject to subsection (2), only if) –(c) the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct.[38]A term of an employee’s contract can only be implied if:a. it is necessary to give the contract ‘business efficacy’, orb. it represents the custom and practice in that employment and is ‘reasonable, certain and notorious’ — Devonald v Rosser and Sons 1906 2 KB 728, CA.c. it is an inherent legal duty central to the relationship between employer and employee — for example, the duty to provide a safe system of work or the duty not to undermine trust and confidence.[39]The test for constructive dismissal is whether the employer’s actions or conduct amounted to a repudiatory breach of the contract of employment (Western Excavation Limited v Sharp). "If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer's conduct. He is constructively dismissed."[40]Whether or not the employer intended to break the contract is irrelevant (Bliss v South East 713 [1987] ICR 700 (CA)).[41]It is an implied term of any contract of employment that the employer shall not without reasonable and proper cause conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence between employer and employee: (Malik v Bank of Credit and Commerce International [1998] AC20 34h - 35d and 45c-46e).[42]Any breach of the implied term of trust and confidence will amount to a repudiation of the contract: see, for example, Browne-Wilkinson J in Woods v WM Car Services (Peterborough) Limited [1981] ICR 666 at 672, Morrow v Safeway Stores [2002] IRLR 9.[43]The test of whether there has been a breach of the implied term of trust and confidence is objective (Lord Nicolls, Malik page 35c) The conduct relied on as constituting the breach must impinge on the relationship that, looked at objectively, it is likely to destroy or seriously damage the degree of trust and confidence that the employee is reasonably entitled to have in its employer.[44]A breach occurs when the proscribed conduct takes place: See Malik.[45]Reasonableness is one of the tools in the employment tribunal’s factual analysis kit for deciding whether there has been a fundamental breach, but it is not a legal requirement: See Bournemouth University v Buckland [2010] ICR 908 at para 28.[46]The Claimant must not affirm the breach: Lord Denning said in Western Excavating v Sharp (referring to an employee who had been the subject of a repudiatory breach): "the employee must make up his mind soon after the conduct of which he complains. If he continues for any length of time without leaving, he will be regarded as having elected to affirm the contract and will lose his right to treat himself as discharged.":[47]Court of Appeal's decision in Marriott v Oxford Co-operative Society [1970] 1 QB 186 is an authority for the proposition that, provided the employee makes clear their objection to what is being done, they are not to be taken to have affirmed the contract by continuing to work and draw pay for a limited period of time after the breach, even if their purpose is to enable them to find alternative work.[48]The Claimant must show that it resigned in response to this breach, not for some other reason. However, the breach does not need to be the sole or primary cause of the resignation; only an effective cause (Nottinghamshire County Council v Meikle [2004] IRLR 703).[49]In Kaur v Leeds Teaching Hospital NHS Trust [2018] IRLR, the Court of Appeal approved the guidance given in Waltham Forest LBC v Omilaju (at paragraph 15-16). Those authorities give the following guidance on the “last straw” doctrine:- The repudiatory conduct may consist of a series of acts or incidents some of them perhaps quite trivial, which cumulatively amount to a repudiatory breach of the implied term of trust and confidence: Lewis v Motorword Garages Ltd [1986] IRLR 157, per Neil LJ (p167C).[50]If a dismissal was unfair due to procedural failings but the appropriate steps, if taken, would not have affected the outcome, this may be reflected in the compensatory award, Polkey v A E Dayton Services Ltd [1987] IRLR 503, HL. This may be done either by limiting the period for which a compensatory award is made or by applying a percentage reduction to reflect the possibility of a fair dismissal in any event. The question for the Tribunal is whether this particular employer (as opposed to a hypothetical reasonable employer) would have dismissed the Claimant in any event had the unfairness not occurred. In this regard I had due regard to the guidance given in Software 2000 Ltd v Andrews and others [2007] IRLR 569. Tribunals Conclusions[51]Dealing firstly with the claim relating to unauthorised deductions from the Claimant’s wages, I find that on 15 December 2023, Ms. Oguntala visited the care home for a meeting with Mrs. D. one of the previous owners of the care home. This was the first time the Claimant met Ms Oguntala. During the meeting, the Claimant showed Ms. Oguntala around the care home. Ms Oguntala wanted to speak to the Claimant to ask her to stay working at the home. The Claimant explained that she had been offered another position at another home and that she would be deregistering with the CQC as care home manager. Ms. Oguntala asked the Claimant what she would accept to stay at Ocean Hill Lodge in the position and not move to the alternative role that she had been offered and accepted. The Claimant explained that she had been offered an annual salary of £55,000, with an annual performance bonus of £2000. The Claimant also said that she would need her occupancy bonus of £500 (which had been put in place by Mr. D very recently). Ms. Oguntala asked the Claimant what would be the lowest that she would accept to stay. The Claimant replied £50,000, and her bonuses as specified above. Ms. Oguntala agreed to this.[52]Th new agreement was evidenced by the updated contract of employment dated 26 January 2024 which was signed by the Claimant and Ms. Oguntala. At the hearing, Ms. Oguntala disputed that the contract was valid. I did not accept this and find that the new contract was a valid variation of the Claimant’s original contract of employment. I preferred the evidence of the Claimant as set out in the facts section of this judgement. Ms. Oguntala confirmed that she was inexperienced in the care home industry and would be an absentee owner for the most part. She needed someone that could run the home in her absence, and the Claimant was the ideal solution for her. In order to persuade the Claimant to stay working at the home, Ms Oguntala had to offer the Claimant better terms than the new employer. Therefore, I find that it was highly likely that Ms. Oguntala would have agreed to the new terms that were signed by the Claimant and her on 26 January 2024. This contract included an increased salary of £50,000 per annum, an annual bonus of £2,000 and a full occupancy bonus of £500 per month.[53]Section 13 of the Employment Rights Act 1996 states that: “An employer shall not make a deduction from wages of a worker employed by him unless— the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker’s contract, or the worker has previously signified in writing his agreement or consent to the making of the deduction.” I find that none of these exceptions apply. It follows, therefore, that the Respondent has breached four express terms of the Claimant’s contract relating to her pay. The Respondent paid the Claimant her sick pay following the preliminary hearing with Judge Othen. Therefore, the Respondent owes the Claimant her £2,000 annual bonus for 2024 and occupancy bonuses for June, July, and August of £1,500 gross having already paid the occupancy bonuses for April and May 2024. I find that the Respondent has made unlawful deductions of the Claimant’s wages under Section 13 of the Employment Rights Act 1996 and is ordered to pay her £3,500 less tax.[54]With regard to the claim for constructive unfair dismissal, I have to decide if the Respondent was responsible for conduct which was a significant breach going to the root of the contract of employment. The conduct relied upon by the Claimant must constitute a fundamental breach of contract which looked at objectively was likely to destroy or seriously damage the degree of trust and confidence that the employee was reasonably entitled to have in her employer.[55]In the first instance I find that there was a breach of express fundamental terms in the Claimant’s contract of employment dated 26 January 2024. The Respondent’s failure to pay the Claimant her performance bonus for 2024, her occupancy bonuses for June, July and August 2024, her sick pay for three weeks while she was off work due to illness between 7 to 28 October 2024, and her holiday pay were breaches of fundamental express terms of the contract of employment. I find that a failure to pay wages is breach of contract and the Respondent’s failure to do so was a fundamental breach of contract. Furthermore, as the Claimant raised this in her letter of resignation dated 1 November 2024, she resigned due to these breaches.[56]In the second instance, I find that there was a breach of the implied term of trust and confidence in the Claimant’s contract of employment by the Respondent. This was evidenced in the chronology of events outlined by me in the fact section of this judgement. In particular the Respondent’s emails to the Claimant on the following occasions amounted to a breach of the implied term of trust and confidence. The Respondent’s email about how the Claimant ran the home and refusing to pay her bonuses on 2 October 2024, unfounded allegations of dishonesty against the Claimant on 2 October 2024, failure to pay company sick pay to the Claimant for her absence between 7 to 28 October 2024, hinting to the Claimant on 22 October 2024 that her salary would not be paid, threatening to deduct staff wages from the Claimant’s salary on 30 October 2024, suggesting the Claimant resigns and complaining about her salary on 31 October 2024, casting doubt on the employment relationship and suggesting it be dissolved on 31 October 2024, casting doubt on their ability to pay the Claimant’s salary 1 November 2024, and again complaining about her salary, issuing an ambiguous dismissal of the Claimant on 1 November 2024 in the absence of following any disciplinary procedure. I find that all of these examples looked at objectively amount to a breach of the implied term of mutual trust and confidence in the Claimant’s contact of employment and are a fundamental breach of contract. The Claimant resigned by her letter of resignation as a result of these breaches. In such circumstances, the I find that the Respondent constructively dismissed the Claimant on 1 November 2024.[57]In respect of what would have occurred had the Claimant not resigned from her employment due to the Respondent’s fundamental breach of contract I find that on the basis of the CQC report and its findings received by the Respondent on or around the end of 2024, she would have been fairly dismissed for gross misconduct without notice by no later than 31 January 2025 pursuant to the Respondent’s disciplinary procedure. I find that had the Claimant not been constructively unfairly dismissed, it was highly likely that the Respondent would have instituted its disciplinary procedure for serious misconduct against the Claimant for the many failures identified by the CQC report in the way that the home was being run that lead to the conclusion that the care home was inadequate. As the home was being run by the Claimant it was highly likely that the Respondent would upon receipt of the report instituted disciplinary proceedings against the Claimant in January 2025 and very likely have dismissed her for the failings identified in the report by no later than the end of that month. I did not find that the Respondent was responsible for the many failures in the running of the home identified in the CQC report. The Claimant was the registered manager for the home for 11 out of the 12 months that the report applied to. Ms. Oguntala was reliant on the expertise of the Claimant in helping her run the home to ensure that it was compliant. It was clearly not compliant based on the conclusions of the report. The blame for this was due to the Claimant. My conclusion in this regard means that the Claimant’s compensation for unfair constructive dismissal would be limited to her basic award and a compensatory award for loss of earnings from 1 November 2024 to 31 January 2025, her loss of statutory rights and any incidental costs of him searching for alternative employment after her constructive dismissal.[58]The remedies hearing is listed for Friday 19 June 2026 and directions for this hearing will follow. It is hoped that the parties can come to an amicable agreement on compensation given the guidance I have given above to the parties.