David Hoey, professor and partner in BTO Solicitors’ employment law team, outlines steps employers can take to help avoid a constructive unfair dismissal claim.
Employers will undoubtedly be aware of the rights employees have to claim unfair dismissal. Lesser-known, however, is the right to claim constructive unfair dismissal, where the employee resigns, arguing that the employer’s conduct amounted to a breach of the contract. Thus an employee can claim unfair dismissal even where they weren’t dismissed.
To do this, an employee is entitled to rely on a fundamental or sufficiently important breach of the employment contract by the employer, or as an alternative, they can resign on a pattern of conduct by the employer. If this is sufficiently serious to be considered a breach of contract, an employee would be entitled to resign in response to some form of “bad” treatment and rely on that last act by the employer as the “last straw” thereby resigning and claiming constructive dismissal.
The courts recently considered a situation where there were a series of acts culminating in a last straw that caused the employee to resign. Ms Kaur was employed as a nurse between 4 August, 2008 and 28 August, 2014. She argued that from the beginning she was the subject of complaints about her performance which were not justified.
She was put on a formal capability process in 2010, but was deemed competent in January 2012. However, she said the episode badly undermined her self-confidence. Separately, problems developed with colleagues whom she felt were bullying her, specifically a healthcare assistant called Ms Luckaine.
Ms Kaur made a formal complaint in 2012, but no action was taken. On 22 April, 2013 there was an altercation between Ms Kaur and Ms Luckaine, with several witnesses to the incident. The claimant went off sick and raised a Dignity at Work complaint against Ms Luckaine.
There was an investigation under the healthcare trust’s disciplinary processes, after which disciplinary proceedings were brought against both individuals. There was a hearing before a panel on 2 October, 2013, which also covered Ms Kaur’s Dignity at Work complaint.
The panel decided that she was guilty of “inappropriate behaviour”. It found that the claimant and Ms Luckaine had been shouting at one another, close to an area where patients were being treated. Both were given a final written warning. Shortly afterwards Ms Kaur commenced a period of maternity leave.
The claimant appealed against the outcome and a hearing took place on 14 July, 2014. The appeal was dismissed and the claimant gave notice of resignation on 17 July, claiming that she had been treated unfairly and argued that all trust and confidence had been destroyed.
She then raised a claim for constructive unfair dismissal, arguing that the “last straw” was when her appeal against the final written warning was rejected.
The Employment Tribunal struck out her claim as it had no reasonable prospect of success. The claimant’s appeal to the Employment Appeal Tribunal failed. She appealed to the Court of Appeal.
The key legal issue in this case was whether there was any action that entitled the claimant to resign. In this regard she had relied upon the “last straw doctrine”, where a claimant argues that there has been a series of breaches of contract that culminate in something the claimant says entitles her to resign (even if the action causing the resignation was not itself a fundamental breach of contract).
The argument is that taking all the conduct together, the employee is entitled to consider the employer to have breached the contract of employment.
The Court of Appeal considered the law in this area, and issued useful guidance around the questions an Employment Tribunal needs to consider, including ensuring the focus is on the employer’s conduct that caused the resignation and whether it is sufficiently serious for the employee to claim constructive dismissal.
In the case in question, the Court of Appeal agreed with the Employment Tribunal that there was no “last straw”. The employer’s disciplinary process was perfectly proper and the case was dismissed.
Nonetheless, employers should remember that employees can rely on a series of actions in seeking to establish a claim for constructive unfair dismissal. Employers need to ensure that their actions comply with the express terms of the contract and that they avoid any breach of the implied term that neither party will, without just and proper cause, act so as to destroy the trust and confidence within the employment relationship. That can be challenging when the employment relationship begins to go awry.
The case also suggests even if the employee has previously accepted some potential breach of contract (such as by continuing to remain in work), it may be possible to rely on that conduct as part of the course of conduct that leads to the last straw.