108: Court of Appeal provides guidance on the ‘last straw’ principle in constructive dismissal claims

In order to succeed in a constructive dismissal claim, the employee must have resigned in response to a serious breach of an express or implied contractual term by the employer.

Under the ‘last straw’ principle, the employee may also resign in response to the last in a series of less serious acts by the employer which cumulatively amount to a fundamental breach of contract. Although the final incident does not itself have to amount to a serious breach of contract, it cannot be trivial or innocuous. The employee must resign promptly, otherwise they risk being found to have accepted the breach and lost the right to claim constructive dismissal. However, in Kaur v Leeds Teaching Hospital NHS Trust, the Court of Appeal has confirmed that in last straw cases, the final act will revive an employee’s right to resign even where they may previously have affirmed the contract by continuing to work after the employer’s earlier acts. In this case, the employee’s claim was struck out because the act which she relied on as the final straw was innocuous.

Ms Kaur worked for Leeds Teaching Hospitals NHS Trust as a nurse. She was subject to capability procedures which she alleged were unjustified and later complained of bullying by colleagues. After an altercation with another employee in April 2013, the Trust began disciplinary proceedings against her. In October 2013 the disciplinary panel found that her behaviour had been inappropriate and gave her a final written warning. Her appeal was dismissed in July 2014 and she resigned the following day.

Ms Kaur began proceedings for constructive unfair dismissal, relying on this series of events: the unjustified complaints about her performance; the altercation; and the Trust’s instigation and handling of the disciplinary and appeal procedures. She alleged that these acts cumulatively amounted to a breach of the implied term of trust and confidence and that the Trust’s handling of the disciplinary and appeal process was the ‘last straw’ which entitled her to resign.

The Employment Tribunal struck out the Ms Kaur’s claim, finding that she had no reasonable prospect of establishing that the Trust’s handling of the disciplinary and appeal procedures amounted to the ‘last straw’, since they had been conducted properly and fairly. They could not therefore amount to a breach of contract or contribute to a series of acts which cumulatively amounted to a breach. The Tribunal considered that the April 2013 altercation could not amount to the last straw either, because Ms Kaur had effectively accepted this potential breach by waiting too long to resign.

Both the EAT and the Court of Appeal agreed with the Tribunal’s ruling and dismissed Ms Kaur’s appeal. The Court of Appeal confirmed that where an employee has accepted a breach of contract by continuing to work, further acts will revive their right to resign and claim constructive dismissal. However, in this case, there was no final straw because undertaking a fair disciplinary and appeal procedure can never amount to a breach of the implied term of trust and confidence.

This case clarifies that, although an employee might disagree with the outcome of disciplinary proceedings, those proceedings will not amount to a fundamental breach of contract, or contribute to a series of incidents in a ‘last straw’ case, provided that the employer has acted fairly and reasonably throughout. Employers should also note that even if an employee accepts a breach, for example, by continuing to work, it may still be possible for them to rely on that breach later as part of the series of acts leading to the final straw which entitles them to resign and claim constructive dismissal.