Fundamental breach
Unilateral salary cut
Case Mostyn v S and P Casuals Ltd [2018] UKEAT/0158/17, Employment Appeal Tribunal
Facts M, a sales executive, reported poor sales figures over a four-year period. S, his employer, asked him to take a 50 per cent reduction in his salary. he refused and S stated that it would impose a unilateral salary cut. M resigned without notice and complained of constructive unfair dismissal on the basis that S’s conduct had breached the implied term of mutual trust and confidence. The ET rejected the claim, stating that M’s poor performance had given S reasonable and proper cause to take action which would otherwise breach the implied term. M appealed to the EAT.
Decision 1. The appeal was allowed and the matter remitted to a fresh tribunal.
Unilateral pay cuts breached a fundamental term of any contract of employment and would generally entitle immediate resignation.
Tribunals should never assess whether an employer’s “reasonableness” could justify a fundamental breach of contract.
CONSTRUCTIVE DISMISSAL
Last straw
Affirmation of breaches of contract
Case Kaur v Leeds Teaching Hospitals NHS Trust [2018] EWCA Civ 978, Court of Appeal
Facts K was subject to disciplinary proceedings following an altercation with a colleague. She was issued with a final written warning for inappropriate behaviour. Her appeal was dismissed. On the following day she resigned, claiming that the rejection of the appeal amounted to the last straw in a series of events which, taken cumulatively, breached the implied duty of mutual trust and confidence. On behalf of her employer it was argued that because she had continued to work following earlier incidents which she cited, which included unjustified comments about her performance, she had affirmed any possible earlier breach and could not, for the purposes of a constructive dismissal claim, invoke them as part of the relevant chain of events culminating with the appeal outcome. The ET rejected her claim on the basis that the disciplinary and appeal decisions had been reached in compliance with a far process and could not contribute to the repudiation of her employment contract. Her appeal was dismissed by the EAT and she appealed to the Court of Appeal.
Decision 1. The appeal was dismissed.
The Court of Appeal made the following points:
Even where an employee affirms repudiatory breaches caused by earlier employer conduct, for example by continuing to work as normal, further damaging acts on the part of an employer at a later date can revive a potential constructive dismissal claim, taking the full chain of events into account.
What was the employer’s most recent act/omission which the employee says triggered their resignation?
Has the employee affirmed the contact since that date?
If not, was that act/omission by itself a repudiatory breach of contract?
If not, was it nevertheless a part of a course of conduct (regardless of any intervening affirmation) comprising several acts and omissions which. viewed cumulatively, amounted to a breach of the implied term of trust and confidence?
Did the employee resign in response to that breach?