Resignation on a lengthy notice period can constitute affirmation of contract


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The High Court has held in Brown & anor v Neon Management Ltd & anor that resignation on a lengthy notice period can constitute affirmation of an employment contract.

The claimants resigned as a result of an alleged repudiatory breach of contract, including a failure to pay salary increases/discretionary bonuses and trying to introduce new detrimental contractual terms. During the notice periods, which were six and twelve months respectively, the defendants committed further repudiatory breaches (further failure to pay salary increase/bonuses, and making an unjustified finding of misconduct and reporting that conduct to the regulator, Lloyd's of London).

The High Court found that resignation on notice where the notice period amounts to six months or more constitutes affirmation of the contract of employment, and keeps it alive in the absence of further breaches of contract. However, further breaches during the notice period may be taken into account. Here the further breaches amounted to a repudiation of the contract and the claimants were entitled to damages.

Take note: It seems. following this decision, that an employee's resignation as a result of a breach of contract will not be effective where the notice period lasts six months or more. It will be amount to an affirmation of the contract rather than a repudiation of the breach.

This article is taken from HR Law - September 2018.

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