Waltham Forest v Omilaju

For a constructive dismissal based on a last straw, the employer’s conduct must cumulatively amount to a repudiatory breach, usually of the implied term of trust and confidence. The final act need not itself be a breach of contract or be unreasonable when viewed alone. It must, however, contribute, even slightly, to the cumulative breach. An entirely innocuous or utterly trivial act cannot revive earlier conduct which the employee has affirmed.

The inquiry is objective. Conduct that is objectively perfectly reasonable and justifiable will only unusually satisfy the final-straw test. Where the alleged final act cannot contribute to the breach, a tribunal need not investigate the earlier history in detail.

The employee resigned after the local authority withheld salary for days on which he attended an employment tribunal hearing without having obtained the required leave. He alleged that this was the last straw after earlier treatment, including an adverse reference to a prospective employer.

The Employment Tribunal dismissed his constructive unfair dismissal claim, although it upheld a victimisation complaint concerning the reference. The Employment Appeal Tribunal allowed his appeal on constructive dismissal and remitted the issue to the same tribunal: EAT/0941/03.

The authority appealed, contending that the tribunal had correctly found that the salary deduction was objectively reasonable and could not constitute the necessary final straw. The central issue was whether reasonable conduct could nevertheless be the final act in a cumulative repudiatory breach.

1. Appeal allowed unanimously. Dyson LJ gave the leading judgment, with Wall and May LJJ agreeing. The Court set aside the Employment Appeal Tribunal’s decision and restored the Employment Tribunal’s dismissal of the constructive unfair dismissal claim.

2. Constructive dismissal requires a repudiatory breach by the employer. The contract contains an implied term that the employer must not, without reasonable and proper cause, conduct itself in a way calculated or likely seriously to damage trust and confidence. Breach of that term is repudiatory, and the existence of a breach is assessed objectively: Western Excavating (ECC) Ltd v Sharp [1978] 1 QB 761; Malik v Bank of Credit and Commerce International SA [1998] AC 20.

3. Applying Lewis v Motorworld Garages Ltd [1986] ICR 157, a repudiatory breach may arise from a cumulative series of incidents. The final act need not itself breach the contract or be unreasonable or blameworthy in isolation. It must nevertheless add something, however slight, to the cumulative breach of trust and confidence. An entirely innocuous act cannot be a final straw, even if the employee genuinely but mistakenly regards it as destructive of trust.

4. The Employment Tribunal had been entitled to find that the refusal to pay salary was objectively perfectly reasonable and justifiable. In context, it did not contribute to any cumulative undermining of trust and confidence. The tribunal could therefore reject the final-straw case without examining the earlier conduct in detail. The Employment Appeal Tribunal was wrong to treat the employee’s subjective perception as capable of determining the issue.

5. The tribunal was also entitled to find that the employee resigned because of the salary deduction and advanced a last-straw case. Its conclusion was supported by his resignation letter, witness statement and the way the case had been presented. The alternative ground for upholding a constructive dismissal therefore failed.

• Court of Appeal (Civil Division): Allowed the authority’s appeal, set aside the Employment Appeal Tribunal’s decision and restored the Employment Tribunal’s decision.

• Employment Appeal Tribunal: Allowed the employee’s appeal on constructive dismissal and remitted the matter to the same Employment Tribunal: EAT/0941/03.

• Employment Tribunal: Dismissed the constructive unfair dismissal claim, while upholding a victimisation complaint concerning a reference provided to a prospective employer.