Gibbs v Leeds United Football Club Ltd [2016]
In Gibbs v Leeds United Football Club Ltd [2016] EWHC 960 (QB) (28 April 2016) this matter before Mr Justice Langstaff concerned a contract of employment between the Claimant and Leeds United FC. The issue to be determined was whether the Claimant was constructively dismissed, by reason of a repudiatory breach of contract by Leeds United, or whether he chose to go without there being any breach and as to whether the Claimant acted unreasonably in failing to mitigate his losses by rejecting an offer, to take over as Head Coach in August 2014 after he had resigned.
In the contract of employment, his position and duties were described as:“diligently exercise such powers and perform such duties as may from time to time be assigned to him by the Chief Executive and the Board at which are commonly undertaken and exercised by managers of Professional football club companies of the Company’s status in relation to the playing, coaching and scouting aspects of the Company’s undertaking (including but not limited to player conditioning and the development of tactical instructions and playing standards generally) and in the discharge of the same he shall:……..comply with all reasonable and lawful instructions and requests given:… (B) to the Assistant Manager by the Chairman; (C) to the Assistant Manager by the Company (D) to the Assistant Manager by the Chief of the Executive…and perform such hours of work as may from time to time reasonably be required of him…”
The contract was for a fixed term until the 30th June 2016. For the period of 1st July 2014 to 20th June 2015 he was to receive £200,000 per annum and in the last year £220,000, to be paid monthly in arrears. Also, provisions made in the contract for car allowance, private medical insurance and 25 days paid holiday in addition to public holidays.
The Claimant resigned by letter on the 26th July 2014. The issue before Mr Justice Langstaff was had he been constructively dismissed by the football club through a breach of contract by them or had he chosen to leave.
He observed that it was argued the Claimant wanted to go but not that he was in breach of his terms of contract. He considered the main issue as to liability was, whether the football club was in breach of the contract, had they breached their obligations under the Contract and the Claimant resigned, at least in part, due to that breach.
He looked at the issues as to quantum and, firstly, he had to determine whether the Claimant had acted unreasonably when he turned down an offer from the chairman to become Manager/Chief Coach in August 2014. Secondly, take into account his loss of salary and benefits against his later positions with another football club from December 2014 to June 2015 and with a premiership football club as Assistant Head of Player Development which started in October 2015.
Following the departure of the Manager on the 31st May 2014, with whom the Claimant had worked with before at another football club, the Claimant had a meeting with the Chairman on the 2nd June who said he wished him to remain at the Club. Mr Justice Langstaff observed that the Claimant had expressed loyalty to the outgoing manager in his conversation with the Chairman but he did not give any indication he was leaving the football club or was intending to do so. He had gone to the meeting with the expectation of being dismissed. He considered that, although the Claimant would have been prepared to negotiate an early release of his contract, he was happy in his job and was prepared to remain in his position and abide by its terms.
The Chairman wrote to the Claimant on the 4th June 2014 referring to him rejecting the position of Assistant Manager and that his fellow directors would like him to stay at the Club. The position he held at the Club was Assistant Manager which mistake by the Chairman, Mr Justice Langstaff considered, was not the point as the letter had demonstrated that the football club wanted him to remain in the position he occupied.
The Claimant was told to return to work on the 9th June when the season had ended and the players were away. He had a meeting and exploratory discussions with the person who worked closely with the Chairman about consensually leaving the Club. Mr Justice Langstaff considered these conversations demonstrated
- “that the Claimant was not unwilling in principle to go, but that the terms on which he would do so were critical, and that if they were not met he intended to stay and work out his contract”.
The Claimant spoke to the Chairman on the 23rd June and this time raised the issue under what terms he could leave the club. The Claimant had known for some 11 days before that he was not flying out with the players to Italy for pre-season training, which he would have done in his role as assistant manager. The Claimant, in his note, had put that the Chairman said he could look after first team players not going to Italy. There were none aside from injured ones and
- “he also said I could do some cleaning work at the training ground”.
Though the Claimant in his evidence said it was apparent that the Chairman did not want him to stay at the football club because he was discussing a package for him to leave, Mr Justice Langstaff considered it was the Claimant who first raised the matter as to a financial package with the inference being that the Claimant wanted to leave if terms were agreed rather than the Chairman wanted him to go.
At a press conference the Chairman announced the new manager and assistant manager positions saying that he expected the Claimant to remain at the club. The Claimant and the new manager did not have a good working relationship and the new manager indicated to the Claimant he would speak to the chairman to resolve the situation but he did not contact the Claimant. In the meantime the Claimant was not given any work even though he turned up ready to work the week of the 23rd June 2014. On that day he complained to the chairman about his situation and, if he could not be given work in his role as assistant manager there had to be a solution as to leaving on agreed terms. They did not speak again until August.
Mr Justice Langstaff said the overall picture, confirmed by evidence before him, was that the Claimant was without work and not part of the training. Subsequently on the 23rd July he was informed that he would receive an email that his role was to be with under 18 and under 21 players, neither group consisted of first team players. The email said:
“Dear Nigel
Further to our earlier conversation I am instructed to write to advise you as follows: (i) with immediate effect you are to have no contact and/or involvement with the LUFC First Team and your role at the Club should be confined to working with the Under 21s , Under 18s and other non-first team players…
Kind regards
Graham”
In their defence, the Club said that the day before the email was sent, the chairman had decided the Claimant should not have dealings with the first team but with their other players. The day after the email was sent; the new manager told the Claimant he did not want him near the first team or at the club.
On the 26th July, the Claimant wrote to the chairman resigning with immediate effect on the basis that the club were not prepared to honour his contract.
The chairman next spoke to the Claimant on the 23rd August and in his witness statement said that he was not told about the Claimant’s resignation even though it had been addressed to him. After the club experienced a heavy defeat and the new manager was sacked, the chairman asked the Claimant to return to the club as head coach, which he turned down.
Mr Justice Langstaff on reviewing liability looked at all the circumstances and found that even though the Claimant had said he was prepared to leave the club upon suitable terms being offered, it did not detract from the conduct of the club being in breach. The Claimant had remained ready and willing to carry on his duties under his contract as assistant manager
He did not consider requiring a manager and coach who had previously worked with the first team to have no contact with the first team only with the Under 18s and Under 21s could be said to be a reasonable direction. The loss of status was plain to all to see. To require the Claimant to work as directed by the email of 23 July showed an intention to refuse to perform the contract as it had originally been made.
- “The receipt of the email of 23 July prompted the resignation. I accept Mr Gibbs’ evidence to that effect. It is supported by the close connection in time between the two events. It is what one would expect a self-respecting person (such as I hold Mr. Gibbs to be) to do.”
With regard to damages, he found there to be nothing unreasonable about the Claimant refusing the Chairman’s offer made in August, his position had been made untenable by the club. Mr Justice Langstaff referred to the Claimant’s later employment with another football club and now at a premiership club since 21st August 2015, where he is Assistant Head of Player Development. Under that contract he is entitled to a player development bonus and a discretionary bonus payable after he has worked there for a year but, payable in part up to the 30th June 2016. His contract with the Defendant expired on that date and Mr Justice Langstaff considered
- “ credit must be given to the Defendant in respect of the net sums receivable in respect of those bonuses, by way of further deduction from the sum of £331, 426.05 set out in the Schedule of Loss and Damage which was filed in December last year”.
Mr Justice Langstaff left it to counsel to draft the order to provide for the award of £331,426.05 to be paid to the Claimant’s Solicitors to hold as stakeholder taking into account the two bonuses for which the Claimant must give credit to the Defendant.
The Claimant, Nigel Gibb had therefore, succeeded in his claim that he had been constructively dismissed from his position with Leeds United Football Club after he resigned following what was in his opinion a demotion.