With the ‘last straw doctrine’, tribunals have to decide whether employer
actions amount to a breech of contract
The EAT has provided further clarification of the ‘last straw doctrine’
relied upon by employees claiming constructive dismissal.
Constructive dismissal occurs when an employee resigns, with or without
notice, in response to a fundamental breach of the employment contract by the
employer.
Although the employee ends the contract, their ‘resignation’ is
automatically converted into a ‘dismissal’ – as if they were in fact dismissed.
Consequently, the employee can claim the termination of their contract amounts
to an unfair (constructive) dismissal.
A fundamental breach is one that is so serious it goes to the very heart of
the employment contract, or shows the employer no longer intends to be bound by
one or more of the essential terms of the contract. This type of breach
releases the employee from all further obligations under the contract.
It does not matter whether the fundamental breach is of an express or an
implied term. Demotion, late payments of wages and failure to pay overtime have
all been considered fundamental breaches of contract. Alternatively, an
employee may seek to rely on the breach of an implied term, such as the implied
term of mutual trust and confidence, which is implied in all employment
contracts.
In bringing a claim of unfair constructive dismissal, an employee must
either point to one particular fundamental breach, or show there has been a
series of actions by the employer that cumulatively amount to a fundamental
breach of the implied term of mutual trust and confidence.
The latter scenario is known as the ‘last straw doctrine’, where, faced with
yet another breach by the employer, the employee treats that breach as the last
straw and resigns. It is not necessary that any of the breaches amount to a
fundamental breach when considered individually.
In Logan v Commissioners of Custom & Excise EAT/686/00, 23.05.02, Logan
sued her employer for constructive dismissal, relying on a series of breaches
with an 18-month gap between the first and the last. The first breach, in 1997,
was her employer’s failure to deal with her grievance fairly, or abide by its
own contractual procedures. The second involved her alleged treatment during
two interviews with her employer in 1999.
Logan argued that her treatment at the interviews amounted to the last straw
in a series of acts of poor treatment by the employer, which entitled her to
consider herself constructively dismissed. The employers succeeded in
persuading the tribunal that too much time had passed between the two events
for Logan to rely on the ‘last straw doctrine’. However, the EAT overturned
this decision.
In a last straw constructive dismissal case, where an employee claims the
employer has committed a number of acts, which together amount to a breach of
the implied term of mutual trust and confidence, a proximity in time between
those acts is not necessary. The question for the tribunal in ‘last straw’
cases, is whether the employer’s conduct, taken cumulatively as a whole,
amounts to a fundamental breach of contract.
Key points
An employee can rely on the ‘last straw doctrine’ where their employer has
perpetrated a series of actions that cumulatively amount to a fundamental
breach of the implied term of mutual trust and confidence.
An employee does not need to show that their employer’s actions are close
together in time
In addition to the basic and compensatory awards for unfair constructive
dismissal, employees who have been constructively dismissed may be entitled to
seek compensation for loss suffered due to the manner of their unfair
constructive dismissal (Johnson v Unisys Ltd [2001] IRLR 279 HL)
By James Moss, a solicitor at Palser Grossman solicitors
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