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Constructive Dismissal and the Last Straw Doctrine

26 April 2022

More commonly than not, reference to a “dismissal” tends to be to an express dismissal by the employer to the employee. Employment law, however, has developed the concept of constructive dismissal, whereby an employee resigns in response to a repudiatory breach of contract by the employer. The breach may be a standalone act or an accumulation of acts culminating in the final act or “last straw”.

In order to claim constructive unfair dismissal, an employee has the additional hurdle of proving that their resignation amounted to a dismissal (i.e. that they resigned in response to a repudiatory breach). Sometimes a tribunal will also need to consider whether the last straw doctrine applies, something that it failed to do in the recent case of Craig v Abellio Limited.

What constitutes a Repudiatory Breach?

An employer must be in repudiatory breach of either an express term of the contract (e.g. reduction in salary or number of hours worked) or of an implied term (e.g. the duty of trust and confidence) in cases of constructive dismissal. The breach can be “actual” (meaning the employer has already committed it) or “anticipatory”, where the employer has demonstrated an intention not to be bound by the contract in the future.

Once a breach has been established, it must then be decided whether it is repudiatory and whether the employee has resigned in response to it. As is common in employment law, there is no clear test to establish whether a breach is repudiatory. Instead, you have to look at the facts within the specific context of the case (this must be done objectively, whether the breach was intentional or not is not always relevant). What case law has determined, however, is that for a breach to be repudiatory it must be significant and must go to the root of the contract or show that the employer no longer wants to be bound by the contract. A repudiatory breach cannot be cured unless the employee has waived the breach (i.e. not resigned in response to it) or affirmed the contract (by treating the contract as if it has continued).

What is the last straw doctrine?

The last straw doctrine is where an employee has put up with a series of acts or incidents by the employer but resigns in response to a final act (or omission), often referred to as the “last straw”. Alone, the final act may be relatively insignificant, but in the context of a series of prior incidents, they may cumulatively amount to a repudiatory breach of the implied term of trust and confidence.

This doctrine allows employees to rely on past breaches provided that they constitute – along with the latest breach – a continuing course of conduct.

What happened in Craig v Abellio Limited?

Mr Craig was a bus driver having worked for Abellio Limited (“Abellio”) since July 2014 until he resigned on 20 July 2019. At the time of his resignation, he was absent from work on sick leave. He had taken three prolonged periods of sick leave, the first of which started in March 2018. Prior to resigning, Mr Craig lodged a grievance about his entitlement to sick pay. The grievance was initially rejected, but Abellio reversed this decision on appeal and it was concluded that Mr Craig be paid £6,114 on 19 July 2019.

On 20 July 2019, having not received the payment, Mr Craig resigned, stating in his letter of resignation that he had been “left with no choice but to resign in light of my recent experiences regarding my sick pay dispute which subsequently has become a fundamental breach of contract”. He complained of constructive dismissal and referred to the last straw doctrine, stating that whilst he had waived Abellio’s breaches in the past, he was “no longer willing or able to endure this consistent pattern of emotional abuse and calculated deceit”.

The Employment Tribunal dismissed Mr Craig’s claim for constructive unfair dismissal as it ruled that the grievance process had found in his favour and therefore that Abellio “was not guilty of any fundamental breach of contract towards him”. Mr Craig appealed this decision.

What did the Employment Appeal Tribunal rule?

The Employment Appeal Tribunal (“EAT”) found that the Employment Tribunal did not correctly apply the last straw doctrine to the facts of Mr Craig’s case and that it incorrectly found that the historic breaches had been remedied by the grievance. The EAT found that “the claimant’s case was a litany of errors in relation to his pay and hours and the failure to engage with him when he raised complaints and queries”. It rejected Abellio’s argument that there was a genuine dispute about the terms of the contract, which they argued they had resolved in Mr Craig’s favour at the grievance appeal. It therefore ordered that Mr Craig’s constructive unfair dismissal case be remitted to a new Employment Tribunal.

Conclusion

Whilst we are yet to know whether Mr Craig’s claim is going to be successful in a newly constituted tribunal, given the ruling of the EAT and applying the last straw doctrine, it seems likely that it will be.

Irrespective of the outcome, this case should be a reminder to employers that the last straw doctrine can help employees win constructive dismissal cases where there has been an accumulation of breaches, whether intentional or not, whether seemingly insignificant or not and even if individually they have not previously been acted upon by the employee.

Employees should also be aware that in order to argue constructive dismissal, they need to accept the breach (or “last straw” where there has been a series of breaches) by resigning without undue delay. Any delay in resigning might constitute affirmation of the contract as opposed to acceptance of the breach.

This article is provided by Burlingtons for general information only. It is not intended to be and cannot be relied upon as legal advice or otherwise. If you would like to discuss any of the matters covered in this article, please contact Helena Antoniou or write to us using the contact form below.

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