Circumstance can be relevant when considering whether misconduct amounts to gross misconduct from a contractual perspective

When dismissing an employee, employers will usually need to give notice, or make a payment in lieu of notice. The main exception is where an employee has committed a serious breach of contract - often referred to as 'gross misconduct' - which may justify dismissal without notice (known as summary dismissal).

However, employees can challenge a summary dismissal by bringing a wrongful dismissal claim. This is a contractual claim i.e., alleging that the employer has breached the employment contract by failing to give notice when dismissing allegedly for gross misconduct. If successful, an Employment Tribunal can award compensation for the pay and benefits the employee would have received during their notice period.

In relation to wrongful dismissal claims these cases, the legal issue (which is different from the statutory test for unfair dismissal) is whether the employee’s conduct was serious enough to amount to a repudiatory breach of contract, thereby entitling the employer to dismiss without notice. While this assessment has traditionally focussed on the nature of the misconduct itself, the recent case of XX v YY [2026] EAT 89 suggests that the wider context, including duress, could be relevant when determining whether the employee’s actions truly justified summary dismissal.

XX v YY

Background

The Claimant was an assistant head teacher at the employer's school. Whilst employed in this position, the claimant sent a message of a sexual nature to an individual the Claimant believed to be under 18.

Outside of work, the Claimant had been in a controlling extra-marital relationship for several years. The Court accepted the Claimant's explanation that, in sending the sexual message to a child, they had acted under duress for fear of harm to themselves and their children by their abusive partner.

Following an investigation and subsequent disciplinary procedure, the Claimant was summarily dismissed on the 9^th June 2020 for both sending the message and not disclosing this to their employer for a long period of time.

After raising an internal appeal, the Claimant brought Employment Tribunal proceedings against their employer for discrimination for something arising from disability, unfair dismissal and wrongful dismissal.

ET Decision

At the First Tier Tribunal, all complaints failed. The Tribunal did (briefly) consider the impact of duress in deciding whether there was a repudiatory breach of contract but concluded that such breaches are to be determined on an objective basis (i.e. did their actions amount to a fundamental breach of contract), and that the motives for doing so are not a relevant factor.

A subsequent appeal was allowed to proceed in relation to the complaint of wrongful dismissal only.

EAT Decision

The EAT allowed the appeal. It determined that the correct question to consider when determining whether there has been a repudiatory breach is whether 'the conduct, when viewed objectively, and in all the circumstances, so undermined the trust and confidence inherent in the employment relationship' that summary dismissal was justified.

Accordingly, where an employee is under duress, this is a relevant circumstantial factor for the tribunal to consider when viewing the employee's conduct objectively.

The EAT remitted the issue to the same ET to re-consider accordingly.

Key implications for employers

The EAT’s judgment is a helpful reminder that disciplinary investigations should not focus solely on the misconduct itself. Employers should also take reasonable steps to understand the surrounding circumstances, including any factors that may have influenced the employee’s behaviour. This will be highly relevant for an affair dismissal from a statutory point of view also.

If an employee later brings a wrongful dismissal claim following a summary dismissal, clear and thorough documentation will be important. Recording not only the conduct in question but also the context considered can help demonstrate that the employer took a balanced approach and reasonably concluded that the conduct amounted to a repudiatory breach of contract.

The Employment Tribunal’s judgment in this case is therefore awaited with interest. This will be particularly relevant for employers in sectors where employees hold positions of trust, and where summary dismissal for gross misconduct is often seen as essential to maintaining confidence and reputation.