Affirmation of contract and 'last straw' constructive dismissal

Kaur v Leeds Teaching Hospitals NHS Trust

The ‘last straw’ doctrine in constructive dismissal cases allows a claimant to rely on the totality of an employer’s acts, even though earlier breaches by the employer may have been affirmed, so long as the final act forms part of a series.

Constructive dismissal is when an employee resigns in response to their employer’s conduct and then brings an employment tribunal claim saying they were forced to resign. It’s a concept grounded in contract law, i.e. for a claim to succeed, the employee must show that their employer’s conduct was so bad (what’s called a repudiatory breach of contract) that it destroyed the employment contract, thus entitling them to resign.

It is increasingly common (as happened in this case) for breach of the implied term of trust and confidence to be alleged by an employee in constructive dismissal cases (as such a term is fundamental and goes to the root of the contract).

A repudiatory breach can be a one-off act by the employer or a course conduct on the employer’s part which can cumulatively amount to a breach of contract entitling an employee to resign following a ‘last straw’ incident, even though this last straw by itself does not amount to a breach of contract. The EAT recently held that if the employee did not resign once these incidents amounted to the fundamental breach, and instead ‘soldiered on’ at work, they will have affirmed the contract. They would not be able to rely on these breaches in any future last straw claim even if new incidents of poor treatment arose.

Background

This case involved Ms Kaur, a nurse, who argued that her employer’s instigation, handling and outcome (a final written warning, upheld at internal appeal) of its disciplinary process following her altercation with a colleague, was unreasonable such that it amounted to a repudiatory breach of the implied term of mutual trust and confidence. The tribunal struck out her claim as it had no reasonable prospect of success. Her appeal to the EAT was unsuccessful so she headed off to the Court of Appeal. The actual facts aren’t significant here – her appeal failed. What is of interest is that the Court of Appeal took the opportunity to review the operation of the ‘last straw’ doctrine.

Court of Appeal decision

According to the Court of Appeal, the concept of affirmation of contract isn’t strictly relevant in ‘last straw’ cases. All that is required for a last straw resignation is that a series of incidents, whether or not previously affirmed, amounts to a fundamental breach of contract. In other words, further contributory acts effectively ‘revive’ the employee’s right to rely upon the whole series of acts, notwithstanding the earlier affirmation(s). If the employee does not delay in their resignation from the last of these incidents, their claim will be well-founded.

In its judgment, the court said there are five questions for tribunals to consider:

  1. What was the most recent act (or omission) on the part of the employer which the employee says caused, or triggered, the resignation?
  2. Has the employee done anything to suggest that they have accepted (or affirmed) the contract since that act?
  3. If not, was that act (or omission) by itself a repudiatory breach of contract (i.e. of sufficient importance to justify resignation)?
  4. If not, was it nevertheless a part of a course of conduct comprising several acts and omissions which, viewed cumulatively, amounted to a repudiatory breach of the employee’s contract by showing that all trust and confidence had been destroyed? If it was, there is no need for any separate consideration of a possible previous affirmation.
  5. Did the employee resign in response (or partly in response) to that breach?

The Court of Appeal also confirmed that:

  • an employee’s exercising of their right of appeal is unlikely to amount to an unequivocal affirmation of contract, and
  • an employer properly following its disciplinary process and/or the outcome of such a process, cannot amount to, or contribute to, a repudiatory breach of contract

Link to judgment: http://www.bailii.org/ew/cases/EWCA/Civ/2018/978.html

Comment

While the Court of Appeal’s analysis is helpful, it does have the potential to cause practical problems. For instance, employees may rely upon historical ‘complaints’ as contributing to a cumulative breach of trust and confidence, notwithstanding that the employer may have considered the complaints to have been addressed or even forgotten. Will this end up with hearings arguing about things that happened years ago and about which no-one can remember the details?