In 2010 the Court of Appeal gave its judgment in the case of Buckland v Bournemouth University Higher Education Corporation. One of the Court’s significant findings in that case was that, once an employer had committed a fundamental breach of an employee’s contract, it could not repair that breach by any subsequent action, such as, for example, by admitting fault or apologising to the wronged employee in any subsequent grievance process. Following Buckland one option for employers who were concerned that they may have committed a fundamental breach of contract was simply not to accept any wrongdoing. After all, the employer could not repair the breach and any admissions of fault could serve to improve an employee’s future claim for constructive dismissal.
However, in the recent case of Assamoi v Spirit Pub Company (Services) Ltd, the Employment Appeal Tribunal (EAT) held that, where an employer’s behaviour towards an employee had the potential to amount to a fundamental breach but had not quite done so, how the employer responded to the employee’s grievance - admitting fault and apologising where appropriate - could well make the difference between whether a fundamental breach will be found to have occurred or not.
Clearly then, where an employer believes a constructive dismissal claim may be on the cards, its decision on whether to accept fault and apologise to the employee may be informed by its view of whether a fundamental breach has already occurred or not. However, this will almost always be a fine distinction to draw. So what is an employer to do?
Unfortunately, not much assistance was given by the EAT in Assamoi. In his leading judgment, His Honour Judge Pugsley observed, “There is a fundamental distinction, which is perhaps more easy to recognise than to define, between there being a fundamental breach of contract that an apology by an employer cannot cure and there being action by an employer that can prevent a breach of contract taking place.” If the EAT had such difficulty defining the distinction perhaps it is not such a fundamental one after all.
Things get worse for employers in this space between Buckland and Assamoi in that there is, in any event, no litmus test in law which tribunals use to determine whether a breach or a course of conduct is, or has become, serious enough to be fundamental. The basic test is that the breach must go to the root of the contract or show that the employer no longer intends to be bound by one or more of the essential terms of the contract. However, that will turn on the facts and will be left to the tribunals to decide on a case by case basis.
Whilst the state of the law does not assist employers in deciding whether or not to admit fault in such circumstances, perhaps one thing these decisions do is to remind employers of the importance of having grievance officers who are, as far as is possible, removed from the events that have occurred and the people involved, and to consider using external HR consultants to hear grievances in certain cases. Only then may the employer come close to achieving a level of objectivity similar to that which will be applied by any future tribunal called upon to decide whether or not a breach has occurred.
Where the objective grievance officer is not convinced that the employer is at fault then an apology is unlikely to be appropriate. However, where the officer believes the employer may be at fault, the employer’s approach as regards offering any apology should be guided by such factors as the extent of the fault, whether the relationship is likely to be salvaged by an apology, and the likelihood of the employee resigning and claiming constructive dismissal.
Where fault must be admitted employers should consider drafting grievance responses in such a way as to help mend a potentially broken relationship without giving the employee ammunition to use against it in a future constructive dismissal claim. Wherever in doubt, legal advice should be sought.