Case update (2): Unfair dismissal – waiting for the “final straw”

Summary:  Can an employee claiming constructive dismissal rely on a series of acts by an employer including a previously affirmed repudiatory breach of contract?

Yes, held the Court of Appeal in Kaur v Leeds Teaching Hospitals NHS Trust, available here.

Background:  There is an implied term of trust and confidence between employer and employee. This means that employers must not, without reasonable and proper cause, conduct themselves in a manner likely to destroy or seriously damage that relationship. Any such breach will allow an employee with two years’ service to resign in response and bring a Tribunal claim of constructive unfair dismissal.  However, if an employee continues to work, the employee will have affirmed the contract. This means that the employee loses their right to resign in relation to that particular breach.

It is well established that a series of acts which may not individually amount to breaches of contract, can when taken together amount to a breach of the implied term of trust and confidence.  The final act in the series, known as the “final straw”, can allow the employee to resign in response and bring a Tribunal claim of constructive unfair dismissal.  However, the “final straw” does need to be more than trivial.

Facts:   The employee, Ms Kaur, was employed by Leeds Teaching Hospitals NHS Trust (the “Trust”) as a nurse.  Ms Kaur was put through a performance and capability process, to which she had objected.   Ms Kaur had then made bullying allegations in respect of which she had filed a grievance and, most recently, an allegation was made against her of a verbal and physical altercation with a colleague (who was one of those alleged to have been bullying her). Both Ms Kaur and her colleague were taken through a thorough disciplinary process (which was also used to deal with Ms Kaur’s grievance) and given final written warnings.  Ms Kaur appealed but this was dismissed.

Ms Kaur then informed the Trust that she had been left with no choice but to resign and she brought a Tribunal claim for constructive unfair dismissal. Ms Kaur argued that the rejection of her appeal was the “final straw” in a series of acts that when taken together amounted to a breach of the implied term of trust and confidence. The series of acts included the alleged unjustified complaints about her performance, the altercation with her colleague and the Trust’s conduct of the disciplinary and appeal proceedings.

The Trust applied to strike out her claim. The Tribunal struck out Ms Kaur’s claim on the basis that there was no reasonable prospect of establishing that the conduct of the disciplinary and appeal hearings amounted to a breach of contract, or that this was a relevant “last straw” which allowed a claim to be brought for previous breaches. Ms Kaur also had no reasonable prospect of establishing that the altercation with her colleague was the “last straw”, given that she had remained in employment for a number of months following the incident, thereby affirming any possible breach of contract.

The EAT upheld the decision and Ms Kaur appealed to the Court of Appeal.

The Court of Appeal upheld the Tribunal’s decision to strike out Ms Kaur’s claim on the grounds it had no reasonable prospect of showing that the conduct of the disciplinary and appeal process could form the “last straw” as that process was entirely proper.

Usefully, the Court of Appeal offered guidance on constructive dismissal claims, setting out the questions a Tribunal will have to answer when deciding if an employee has been constructively dismissed:

  • What was the most recent act or omission on the part of the employer which the employee says triggered the resignation?
  • Has the employee affirmed the contract since that act?
  • If not, was that act or omission, by itself, a repudiatory breach of contract?
  • 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 trust and confidence? If it was, there is no need for any separate consideration of a possible previous affirmation. i.e. even if a past breach has previously been affirmed by an employee, it can still form a part of a series of events culminating in a “final straw” constructive dismissal.
  • Did the employee resign in response, or partly in response, to that breach?

Implications:  This case is helpful because of the guidance provided by the Court of Appeal on constructive unfair dismissal claims which involve the “final straw” argument.

Unfortunately this level of clarity from the Court of Appeal does remove the argument for employers that once a breach has been affirmed, it cannot then be part of a series of events culminating in a last straw constructive dismissal.  Employers therefore need to be aware that even if an employee remains in employment for some time after an alleged repudiatory act, a more minor subsequent act may leave the door open for a successful constructive dismissal claim.