The Court of Appeal has confirmed that a last straw incident can revive the employee’s right to terminate even where the employee has affirmed earlier repudiatory conduct.

The facts

For a successful claim in constructive dismissal, an employee has to show that the employer has committed a repudiatory breach of contract, and that the employee has resigned because of this breach. The “repudiatory breach” argued by employees is often a breach of the implied term of trust and confidence, and employees can argue that a series of acts that, individually, would not be a breach of trust and confidence, cumulatively amount to a breach, with the last of the acts being a “last straw” that entitles the employee to resign and claim constructive dismissal. This “last straw” does not have to be unreasonable or blameworthy conduct, but it cannot be an innocuous act.

Mrs Kaur was employed by Leeds Teaching Hospitals NHS Trust as a nurse. From the early days of her employment, there were problems with the employment relationship. She was put on a formal capability process for nearly two years, which she said was unjustified, before being considered by the Trust in 2012 to be competent. She said that this badly damaged her self-confidence. There were also problems between her and her colleagues (and one colleague, Marilyn Luckaine, in particular) whom she said were bullying her. She made a formal complaint about this conduct in 2012, but no action was taken by the Trust.

In April 2013, there was an altercation between Mrs Kaur and Ms Luckaine. Each said that the other assaulted her. There were several witnesses. Mrs Kaur (who was pregnant) went off sick and raised a Dignity at Work complaint against Ms Luckaine. The incident was investigated and there was a hearing before a disciplinary panel, which (Mrs Kaur was told) also covered her Dignity at Work complaint. The panel found that she was guilty of “inappropriate behaviour” – she and Ms Luckaine had been shouting at one another, close to an area where patients were being treated. Mrs Kaur was given a final written warning. Shortly afterwards, she went on maternity leave. Ms Luckaine was also given a final written warning.

Mrs Kaur’s internal appeal was dismissed, and she gave notice of resignation the following day. She brought a claim of constructive dismissal. Her claim relied on a series of events which began with the alleged unjustified complaints about her performance, and included the altercation and the subsequent disciplinary and appeal proceedings. Cumulatively, she said that this course of conduct amounted to a breach of trust and confidence.

The Trust applied to strike out Ms Kaur’s claim which the tribunal judge did having read a bundle of documents about the altercation, the disciplinary procedure and the appeal. The tribunal judge said that Mrs Kaur had no reasonable prospect of establishing that the conduct of the disciplinary and appeal hearings was itself a final straw that because Mrs Kaur could not show that the Trust’s conduct was “anything other than an innocuous act”. The Trust had followed the disciplinary procedure in a “perfectly proper” fashion. The judge also held that there was no reasonable prospect of Mrs Kaur succeeding on the basis of the altercation with Ms Luckaine (rather than the disciplinary or appeal process) being the last straw: she had remained in employment for many months afterwards, and had no reasonable prospect of showing that she had not affirmed or waived any possible breach relating to the altercation.

Ms Kaur’s appeal to the EAT was unsuccessful. She appealed to the Court of Appeal.

The Court of Appeal considered whether Mrs Kaur could rely on the acts preceding the disciplinary and appeal process in arguing that there had been a series of events amounting to a fundamental breach of contract, given that she had affirmed any previous breaches by remaining employed for a long period after they had occurred.

The Court of Appeal confirmed existing case law and held that where i) there has been conduct which breaches the term of trust and confidence and ii) the employee affirms this breach but iii) the conduct is continued by further acts, the employee can revive their right to terminate based on the totality of the employer’s conduct. If the employer’s conduct, as a whole, has been repudiatory, and the final act has been part of that conduct, it does not matter whether there had been a repudiatory breach of conduct at an earlier stage and the employee has not resigned: the final straw will revive their right to resign. To hold otherwise would mean that an employee who "soldiers on" and does not object at the first moment their employer's conduct breaches the implied term of trust and confidence, loses the right to rely on all conduct up to that point. The Court of Appeal held that would not be right.

However, this analysis did not help Mrs Kaur. The disciplinary process and appeal had been innocuous acts, and so she could not revive any previous breaches.

The Court of Appeal also held that the tribunal judge had been entitled to strike out Ms Kaur’s claim as having no reasonable prospect of success. The Court reiterated the principle that a tribunal ought to be very slow to strike out a claim in which there were disputed issues of fact, but that there is no absolute rule against it.

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.
  • Did the employee resign in response, or partly in response, to that breach?

What does this mean for employers?

This is good news and bad news for employers. The good news is the confirmation that it is possible (though very unusual) to get a case struck out when there are disputed facts.

However, it would have been useful for employers had they been able to argue that, once a breach has been affirmed, it cannot then be part of a series of events culminating in a last straw constructive dismissal – as one previous case had suggested might be possible. The bad news for employers is that the possibility of arguing this has now been shut down by the Kaur case. Employers will therefore need to be alive to the fact that, even if an employee remains in employment for some time after the alleged repudiatory act, a more minor subsequent act may leave the door open for a successful constructive dismissal claim.

Kaur v Leeds Teaching Hospitals NHS Trust [2018] EWCA Civ 978