Constructive dismissal: Court of Appeal decision on “last straw” principle

A recent decision from the Court of Appeal has made it clear that a series of events can add up to a breach of contract serious enough to allow an employee to resign and claim constructive dismissal, even when they previously “affirmed” the contract by carrying on working for their employer.

Legal background

An employee is entitled to resign and claim constructive dismissal when their employer seriously breaches their contract in some way (a so-called “repudiatory” breach of contract). A breach of contract can be a one-off event – where an employer behaves very poorly towards the employee or, a series of less extreme, fairly innocuous acts which do not constitute a breach in their own right but together add up to a breach of contract (the “last straw” doctrine). It is the overall series of events that justifies the resignation and constructive dismissal claim.

However, it is important that an employee does not extinguish their right to bring a constructive dismissal claim by “affirming the contract”. In short, this refers to a situation where an employer is in breach of the contract, but the employee decides not to resign and to carry on working despite the breach. By staying on, the employee has affirmed the contract.

Latest Court of Appeal decision

In the case of Kaur v Leeds Teaching Hospitals NHS Trust,, the Court of Appeal took the opportunity to clarify that a last straw act entitles an employee to resign, even if they have previously affirmed the employer’s conduct – so long as the last straw is related to the prior series of events. In effect, the employer’s last straw act revives the employee’s right to resign. The Court set out a number of questions to help tribunals assess similar cases in the future.

Comment

In this particular case, the last straw act was not related to the series of prior events, and therefore did not entitle the employee to resign and claim constructive dismissal. But, even though this particular individual’s appeal failed, the Court’s clarification will help future constructive dismissal cases.

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