Constructive dismissal - the last straw

Constructive dismissal is the term used to describe an employee’s claim that he or she has been unfairly dismissed by the actions of the employer.

There are 4 tests that must be satisfied:

1. There must be a breach of contract by the employer. This may be either an actual breach or an anticipatory breach.
2. That breach must be sufficiently important to justify the employee resigning or else it must be the last in a series of incidents, which justify his leaving.
3. He or she must leave in response to the breach and not for some other, unconnected, reason.
4. He or she must not delay too long in terminating the contract in response to the employer’s breach; otherwise, he may be deemed to have waived the breach and agreed to vary the contract.

The ‘last straw’ doctrine is important in this context. A final straw, not in itself a breach of contract, might result in a breach of the implied term of trust and confidence. The final straw had to be an act in a series whose cumulative effect was to amount to a breach of the implied term. The act did not have to be of the same character as the earlier acts. Its essential quality was that, when taken in conjunction with the earlier acts on which the employee relied, it amounted to a breach of the implied term of trust and confidence. It had to contribute something to that breach, although what it added might be relatively insignificant. There was no need to characterise the final straw as ‘unreasonable’ or ‘blameworthy’ conduct. The only question was whether the final straw was the last in a series of acts or incidents which cumulatively amounted to a repudiation of the contract by the employer.

A leading case on this subject is still Western Excavating v Sharp 1978 which is the case that held that there must be a repudiatory breach going to the root of the contract of employment. In what was one of author’s first employment tribunals in 1989, his attempt to explain that case to the judge was met with a kindly explanation that it wasn’t necessary. That it was not necessary would have been obvious to a more experienced advocate but the particular reason given was that the tribunal was well aware of Western Excavating as it started in that very room in the Exeter Tribunal.

Another important point that we like to bear in mind is that the test for breach is an objective and not a subjective one. There is, for example, no constructive dismissal if there is ‘only’ unreasonableness. Also important to note is that it is not possible to cure a fundamental breach - once it has happened it has happened.

This news article was originally put on the website to deal with the case of Omilaju v Waltham Forest London Borough Council. That dealt with how serious the last in a series of incidences, the so-called ‘last straw’, must be. The Court of Appeal had previously held that if there was a final act by an employer that caused an employee to resign and claim constructive dismissal, it was not essential for that final act itself to constitute a breach of contract. In that latest case, the Court of Appeal elaborated further on the necessary quality of a final straw. The Court held that there is no need for the final act to be “unreasonable” or “blameworthy” conduct by an employer. The quality that the final straw must have is that it should be an act in a series whose cumulative effect is to amount to a breach of the implied term of trust and confidence. The act did not have to be of the same character as the earlier acts. Its essential quality was that, when taken in conjunction with the earlier acts on which the employee relies, it amounted to a breach of the implied term of trust and confidence.

2020 update - this area of law still continues to cause litigation. The EAT in Williams v Alderman Davies Church in Wales Primary School had to decide, in 2020, if an innocuous final straw meant that all previous conduct by an employer was irrelevant. The Employment Tribunal had decided that the act Mr Williams had claimed was the last straw was innocuous and reasonable, so could not have contributed to the employer’s previous actions. Accordingly, the tribunal decided that Mr Williams did not resign in response to the employer’s breach of trust and confidence, so he was not constructively dismissed.

Mr Williams appealed, and his case went to the Employment Appeal Tribunal (EAT). The EAT held that where an employer’s conduct together constitutes to a fundamental breach of contract, a claim of constructive dismissal can succeed against them. This is the case even if the employer’s more recent conduct does not breach the implied term of trust and confidence but is what prompts the employee to resign. To succeed, the employee must not have waived the employer’s earlier breach and must have resigned in response to that earlier breach, at least partially. The Claimant failed in a claim of constructive unfair dismissal before the employment tribunal. There was a final act that was decided to be entirely innocuous by the tribunal.

In the EAT judgment HHJ Auerbach said:

“so long as there has been conduct which amounts to a fundamental breach, [which had not been affirmed], and the employee does resign at least partly in response to it, constructive dismissal is made out. That is so, even if other, more recent, conduct has also contributed to the decision to resign.”