What constitutes a fundamental breach?

This week’s case roundup

Euro-Die (UK) v (1) Skidmore, (2) Genesis Diesinking, IDS Brief, 655 EAT

• Skidmore started employment with Genesis in June 1986. On Friday 9 January
1998 he was told Genesis would cease trading with immediate effect but he could
work for Euro-Die, which would be continuing the business from the following
Monday. Skidmore asked Genesis for confirmation that his continuity of
employment would be protected and resigned after Genesis failed to provide that

He claimed constructive dismissal against Genesis and Euro-Die. The tribunal
held there was a transfer for Tupe purposes and as the transfer was the reason
for Skidmore’s "dismissal" it was unfair and liability for this
passed to Euro-Die.

Euro-Die appealed and argued that it was not liable for Genesis’ failure to
provide the assurance as it occurred before the transfer, when there was no
contract between it and Skidmore. Further, that that failure was not serious
enough to amount to a fundamental breach of contract.

The EAT dismissed the appeal and held that the information requested by
Skidmore was crucial and the timing of his request critical. Failure to provide
the assurance was a fundamental breach of the implied term of trust of
confidence, entitling Skidmore to resign, and Euro-Die was responsible for
Genesis’ actions before the transfer.

Care needed when investigating complaints

Smith v Zeneca (Agrochemicals), unreported, February 2000, EAT

• Smith was employed under a one-year fixed-term contract and had been
subjected to a number of incidents of sexual harassment from her line manager.
She complained about him and gave evidence at the subsequent disciplinary

When her contract expired it was not renewed and Smith brought a
discrimination claim. At the hearing she raised a new claim alleging the
handling of her complaint constituted further harassment. She alleged that the
questions asked of her had been unnecessary and inappropriate.

The tribunal held that it had no jurisdiction to consider the new claim, on
the basis that it had not been disclosed earlier. Smith appealed. The EAT held
she should have raised her new allegations before the hearing to enable the
firm to prepare its case. The balance of injustice lay against the hearing of
the new allegation and Smith’s appeal was unsuccessful.

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