News & Insights

The last “last straw”

Katie Burley clarifies when an employee can rely on a breach they had previously waived.

In circumstances where an employer’s conduct amounts to a significant breach of the contract of employment, the employee is entitled to treat the contract as having terminated and claim constructive dismissal. This breach by the employer can be a single act or a continuing course of conduct which culminates in the employee resigning, known as the “last straw”. In the event of a repudiatory breach by their employer, an employee has to decide whether to accept the breach and treat the contract as at an end, or affirm the contract in which case it continues and the employee waives their right to resign and claim constructive dismissal. In the recent case of Kaur v Leeds Teaching Hospitals NHS Trust, the Court of Appeal was asked to determine if an employer’s conduct which itself does not amount to a breach of contract can revive an employee’s ability to resign and rely on a breach they had previously waived to claim constructive dismissal.

Ms Kaur had an altercation with a colleague in April 2013 and subsequently raised a complaint against this colleague. Her employer commenced disciplinary proceedings against both individuals, which also addressed Ms Kaur’s complaint, and both were given final written warnings. The investigation and disciplinary process took some months to complete and shortly afterwards Ms Kaur went on maternity leave. She appealed the decision but due to her leave this hearing did not take place until July 2014. Her appeal was dismissed and she resigned the following day claiming constructive dismissal based on the initial incident with the colleague in 2013 and her employer’s response to that incident and the complaint she had raised.

The Court of Appeal held that it is possible for an employee to rely on earlier repudiatory conduct by the employer even if they have affirmed the contract, but only if the employee can show:

1. The employer committed a series of acts which together amounted to a breach of the implied term of trust and confidence; and

2. There is a later act after the affirmation which itself contributes to this breach of trust and confidence.

Ms Kaur’s circumstances did not satisfy this second requirement as the later act she was seeking to rely on to revive her right to resign and claim constructive dismissal was the outcome of a disciplinary process which had been deemed to be a fair and proper process. Following a fair disciplinary process cannot destroy or seriously damage the relationship of trust and confidence between an employer and employee.

Constructive dismissal cases based on the concept of the “last straw” are always complex and potentially difficult for an employer to see coming. Employees may seek to rely on matters that the employer considered had been resolved a long term before. If you need any advice on how to manage such matters please do not hesitate to contact us.