Fundamental breach

A claim for constructive dismissal can arise where an employee resigns in response to a series of acts which when taken together amount to a fundamental breach of contract - so called “last straw” cases. In Kaur v Leeds Teaching Hospitals NHS Trust, the Court of Appeal clarified that where an employee has affirmed earlier breaches, their right to claim constructive dismissal is “revived” if they resign in response to a further breach.

Basic facts

Ms Kaur, a nurse, had an argument with another member of staff on 22 April 2013. Following an investigation into the incident, a disciplinary hearing took place in October 2013 and she was given a final written warning. Ms Kaur appealed. The appeal hearing which took place in July 2014 dismissed her appeal.

Ms Kaur resigned following the outcome of her appeal claiming that this was the final straw in a series of acts by the Trust. These included unjustifiably criticising her performance, the incident in April 2013, the investigation, the decision to proceed with the disciplinary hearing and the way in which the disciplinary hearing and appeal hearing were conducted. She claimed that she had been constructively unfairly dismissed.

Decisions of tribunal and EAT

The Trust applied to have her claim struck out on the basis that it had no reasonable prospects of success. The preliminary issue for the tribunal to consider was whether the appeal and its outcome were capable of constituting a final straw.

The tribunal struck out her claim. It considered that by remaining in employment following the incident on 22 April and engaging with the employer’s procedures she had affirmed or waived any breach of contract by the Trust. Furthermore, the tribunal considered that she had no reasonable prospect of success of establishing that the appeal and its outcome amounted to a last straw, which would entitle the tribunal to look back at the other alleged breaches of contract. While she was upset by the decision to discipline her, it had been carried out in a “perfectly proper fashion”.

The EAT dismissed her appeal. Ms Kaur appealed to the Court of Appeal.

Decision of Court of Appeal

The Court of Appeal held that the tribunal had properly applied the law on constructive dismissal and in particular the last straw principle. It considered the case law on constructive dismissal and held that even if an employee has affirmed the contract, following a breach by their employer, the right to resign and claim constructive dismissal is “revived” if their employer later commits a further act (or omission) which can be viewed as contributing to a continuing breach.

In this case, Ms Kaur had not asserted that the employer had acted in bad faith and therefore the tribunal had correctly concluded, on the documentary evidence, that following through a disciplinary process “in perfectly proper fashion” cannot “constitute a repudiatory breach of contract or contribute to a series of acts which cumulatively constitute a breach. The employee may believe the outcome to be wrong; but the test is objective, and a fair disciplinary process cannot, viewed objectively, destroy or seriously damage the relationship of trust and confidence between employer and employee”.

The Court also confirmed the approach a tribunal should take when considering a claim for constructive dismissal by asking itself the following questions:

• What was the most recent act (or omission) by the employer which, according to the employee, triggered their resignation?
• Did the employee affirm the contract since that act?
• If not, was that act (or omission) by itself a repudiatory breach of contract?
• If not, was it part of a course of conduct comprising several acts and omissions which, viewed cumulatively, amounted to a repudiatory breach of the implied term of trust and confidence?
• Did the employee resign in response (or partly in response) to that breach?