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The 'Final Straw' and Constructive Dismissal

22 January 2010

A serious breach of an implied contractual term or the ‘final straw’ in a series of less serious actions which cumulatively undermine an employee’s trust and confidence in his or her employer will amount to a repudiatory breach of the employment contract and will normally justify the employee in terminating the contract and claiming constructive dismissal. The final straw may be a relatively minor act but it must contribute, however slightly, to the breach of the implied term of trust and confidence.

In Saunders v Department for Work and Pensions – Child Support Agency, Mrs Saunders, who is disabled on account of an injury to her hand, worked three days a week from home. Her employer, the Department for Work and Pensions (DWP), gave her only three weeks’ notice that her home working was to end, whilst home workers who were not disabled were given 91 days’ notice. Mrs Saunders resigned and brought a claim of unlawful discrimination, on the grounds of her disability, and constructive unfair dismissal, because giving her short notice was the final straw in a series of acts by the DWP that were damaging to the employment relationship.

The Employment Tribunal (ET) upheld Mrs Saunders’ claim of disability discrimination but dismissed her claim of constructive dismissal, holding that the preceding acts did not themselves together constitute a fundamental breach of contract and as the final breach in the form of giving her short notice of the withdrawal of home working was not relied on solely as a repudiatory breach, she had not made out her constructive dismissal claim.

Mrs Saunders appealed against the finding with regard to her constructive unfair dismissal claim and the Employment Appeal Tribunal (EAT) upheld her appeal.

In the EAT’s view, the ET had erred in finding that the final straw had to be pleaded as a single act of repudiatory breach of contract. The correct approach is to add the final straw to the previous acts. An act of discrimination is capable of being a breach of contract as the ET had in fact found, but it appeared to have temporarily lost sight of its ‘powerful’ finding of unlawful discrimination when reaching its decision. The ET should have considered the effect of its finding of unlawful discrimination and added that to the preceding conduct of the employer. It is possible to find that the earlier acts fall short of a fundamental breach. Indeed, by definition they will, since ‘it is only when the final straw is added that the Tribunal stands back to say all of the preceding acts together with the final straw constitute repudiation’.

The appeal was therefore allowed and the constructive dismissal claim remitted to the same ET for redetermination.

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