Constructive dismissal: affirmation does not affect employee’s right to rely on employer’s previous conduct

An employee who “soldiers on”, even though his employer’s actions cumulatively amount to a breach of the implied term of trust and confidence, can still rely on the whole of that conduct to support a subsequent claim of constructive dismissal. A further last straw act by the employer reactivates the employee’s right to terminate.

Background

An employee can resign and claim constructive dismissal if their employer acts in breach of the implied term of trust and confidence.  The employee can rely on a series of acts by the employer, ending with a “last straw” act, even if each act viewed on its own is not serious enough to amount to a breach of the implied term. 

Facts

In Kaur v Leeds Teaching Hospital NHS Trust, Ms Kaur was involved in an altercation with a colleague in April 2013 which led to disciplinary proceedings and a final written for both her and her colleague. Ms Kaur resigned in July 2014 after her employer rejected her appeal against the final written warning. She argued that the rejection of her appeal was the “last straw” in a series of acts which together amounted to a breach of the implied term of trust and confidence.  

The employment tribunal struck out her claim on the basis it had no reasonable prospect of success. The disciplinary process and its outcome was entirely reasonable and Ms Kaur could not therefore rely on them as a “last straw”. In addition, she had lost the right to rely on the altercation as a “last straw” as she had continued in employment for many months after it. This meant that she had affirmed the contract and waived her right to rely on that conduct.  

Ms Kaur lost her appeal to the Employment Appeal Tribunal (EAT) and she appealed to the Court of Appeal.  

Decision

The Court of Appeal considered whether an employee who affirms the contract by “soldiering on” following a breach of the implied term of trust and confidence, loses the right to rely on the employer’s earlier conduct if they resign following a further “last straw” act by the employer which continues that earlier conduct. The Court of Appeal ruled that they did not.  An employee faced with a further act can still rely on the totality of the employer’s conduct to found their constructive dismissal claim. Their right to terminate is revived by the employer’s later act. 

The Court of Appeal disagreed with a previous EAT decision which indicated that once an employee has affirmed the contract following a breach of the implied term, they have to start again from scratch and cannot rely on the employer’s previous conduct. That case should not be followed.  

The Court of Appeal went to on to rule that the employment tribunal had been correct that neither a properly followed disciplinary process, nor its outcome, can contribute to conduct which cumulatively breaches the implied term of trust and confidence. Ms Kaur could not therefore rely on it as a “last straw”. In addition, the altercation itself could not be a last straw as it was not conduct of the employer.

Implications

Employees do not have to resign as soon as the employer’s conduct crosses the threshold for breach of the implied term of trust and confidence.  If they choose not to resign at that stage and the employer then does something else which continues the previous conduct, the employee can rely on the totality of the employer’s conduct to demonstrate that the employer has breached the implied term of trust and confidence and that they were constructively dismissed.