Bedford v. Pilgrims Group Ltd

Non-payment of wages or holiday pay does not invariably amount to a repudiatory breach of an employment contract. The question is whether the breach, assessed in context, is sufficiently serious to justify resignation. A tribunal may assess the whole course of conduct relied upon, without applying the last-straw doctrine where the case does not depend upon an identifiable final breach. Constructive dismissal also requires an objective breakdown of the implied term of mutual trust and confidence. The employee’s subjective loss of trust is insufficient if a fair-minded employee would not regard the employer’s conduct as seriously undermining the employment relationship.

The claimant’s employment transferred to the respondent under the TUPE Regulations 2006. Disputes followed concerning a new contract, holiday entitlement, disciplinary proceedings and grievances. The Employment Tribunal found that four days’ holiday pay had been wrongly withheld and awarded that sum, but held that the breach was minor and that the claimant had not been constructively dismissed.

The claimant appealed, arguing that the holiday-pay dispute amounted to a repudiatory breach and that the respondent’s failure to resolve it was the last straw in a cumulative breach of trust and confidence.

1. Appeal dismissed. The Employment Tribunal had made no error of law in rejecting the constructive-dismissal claim.
2. The non-payment of four days’ holiday pay was a breach of contract, but the Tribunal was entitled to regard it as minor and non-repudiatory. Non-payment of sums due under an employment contract does not automatically constitute a fundamental breach. The case was materially different from a unilateral reduction of contractual pay considered in Cantor Fitzgerald International v Callaghan and Ors [1999] ICR 639.
3. The appeal did not depend upon the last-straw doctrine. The Tribunal was entitled to examine the entire series of events between the transfer and resignation and conclude that, cumulatively, the respondent’s conduct had not objectively undermined mutual trust and confidence.
4. The claimant’s subjective loss of trust was not decisive. The relevant question was whether a fair-minded employee would consider that the employer had broken the necessary bond of trust and confidence. The Tribunal’s finding that the deterioration was attributable to the claimant’s attitude rather than the respondent’s conduct was materially relevant.
5. The Tribunal had correctly directed itself by reference to Western Excavating (E.C.C.) Ltd v Sharp [1978] ICR 221, London Borough of Waltham Forest v Omilaju [2005] IRLR 35, and the implied-term formulation affirmed in Bournemouth University Higher Education Corporation v Buckland [2010] EWCA Civ 121; [2010] IRLR 445.

• Employment Appeal Tribunal: Appeal from the Employment Tribunal’s judgment promulgated on 2 July 2009 dismissed.
• Employment Tribunal: Constructive-dismissal and unfair-dismissal claims dismissed; claims for unauthorised deductions, including four days’ holiday pay, partly succeeded.