Constructive Dismissal - Can a Previously Waived Breach of Contract Be Revived by a Later 'Last Straw' Act by an Employer?
Yes, held the Court of Appeal in a recent case.
What Does the Law Say?
An employee who resigns in response to their employer's serious breach of contract is entitled to claim that they have been constructively dismissed.
In order for a claim of constructive dismissal to be successful, the claimant must show that the employer's breach of contract is serious enough to justify the resignation and allow the employee to treat the contract as being at an end.
This can be in the form of a one-off fundamental or 'repudiatory' breach, or a series of minor acts which individually may not be significant, but which viewed together amount to a repudiatory breach. This is known as the 'last straw' principle. Although the last act may not amount to a breach of contract itself, it must contribute to the overall cumulative breach and can be enough to render the whole series of events as a breach of contract.
The employee must resign promptly in response to the breach, or they risk being considered to have 'waived' (or 'affirmed') the breach.
Kaur v Leeds Teaching Hospitals NHS Trust
Ms Kaur, was employed as a nurse. In April 2013, she was involved in an altercation with another staff member. Following a disciplinary process which took place some six months later, she was issued with a final written warning and appealed. Her appeal was rejected and Ms Kaur resigned the following day.
She claimed constructive unfair dismissal, relying on the rejection of the appeal as the last straw in a series of acts which together amounted to a breach of contract.
The Employment Tribunal struck out the claim, holding that the conduct and decision of the appeal hearing were reasonable and Ms Kaur had no reasonable prospect of establishing that it constituted a last straw. The EAT dismissed Ms Kaur's appeal.
The Court of Appeal
The Court held that where the 'last straw' act forms part of a series which cumulatively amounts to a breach of the implied term of trust and confidence, there is no need to consider whether the earlier acts have potentially been waived. The employee is entitled to rely on the totality of the employer's acts regardless.
However, in this case it was held that there was no 'last straw' as the handling of the disciplinary process had been fair. Therefore the appeal failed.
Best Practice
Employers should be mindful that an employee's waiver of a breach of contract does not necessarily mean that the employer is safe from the risk of a constructive dismissal claim, as a future act may revive the earlier breach.
However, it will be for the employee to establish that the 'last straw' is part of a series of breaches that together constitute a repudiatory breach.