In a judgment this morning in Kaur -v- Leeds Teaching Hospitals NHS Trust (the trust), the Court of Appeal has clarified the law on waiver of breach/affirmation of contract in ‘final straw’ constructive unfair dismissal cases. Previously, there have been conflicting approaches to this question which merited consideration at the Court of Appeal.

We acted on behalf of the trust which has succeeded in defending the claim brought by Mrs Kaur. In line with the findings at each previous stage of appeal, the Court of Appeal found that the employment judge had been entitled to strike out the claim for constructive unfair dismissal as having no reasonable prospect of success. Mrs Kaur argued that the respondent’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 Court of Appeal agreed with the employment judge’s striking out of this claim in which he endorsed the respondent’s decisions and handling of the disciplinary processes.

Clarification of the law of constructive dismissal

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. By its very nature, a cumulative breach case of this type means that the ‘final straw’ itself may be relatively insignificant and may not always be unreasonable or ‘blameworthy’. However, the last incident cannot be utterly trivial or innocuous, and it must contribute something to the breach.

Where an employee ‘soldiers on’ when the employer’s behaviour crosses the threshold, so as to become capable of amounting to a repudiatory breach of contract, the employee will have affirmed the contract. Ordinarily, this means that the employee loses the right to resign in relation to the breach and claim constructive unfair dismissal.

However, the lord justices in this case confirmed the crucial proviso for constructive dismissal, that in a cumulative breach case, further contributory acts effectively ‘revive’ the employee’s right to rely upon the whole series of acts, notwithstanding the earlier affirmation(s). An employee, in such cases, is able to resign and claim constructive unfair dismissal, so long as the resignation is in response to an act which is capable of contributing to the cumulative breach.

The court also confirmed its view that:

  • The trust was entitled to proceed with the appellant’s disciplinary process simultaneously with her dignity at work complaint (against the colleague involved in the altercation) as they arose out of the same facts
  • An employee's exercising of their right of appeal is unlikely to amount to an unequivocal affirmation of contract
  • 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

Confirmation of the approach to strike out applications

The court confirmed that, whilst a tribunal ought to be slow to strike out a claim where there are disputed facts, there is no absolute rule against it. Whether it is appropriate in a particular case requires assessment of the nature of the disputes and the facts that can be realistically disputed. Where there are real grounds for asserting bad faith on the part of the decision makers, oral evidence would be required.

Permission to appeal to the Supreme Court was refused.

Comment

Employers need to be aware that employees may later 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.