Morgan v Halls Of Gloucester

In constructive dismissal cases, separate incidents of misconduct may form part of a continuing breach of the implied term of mutual trust and confidence. A claimant’s delay in resigning after an individual incident does not necessarily affirm the contract if the underlying breach continues. The tribunal must determine when the breach ceased and whether the claimant resigned, at least in part, in response to it. The event triggering resignation need not itself be the breach relied upon, and the breach need not be the sole cause of resignation.

The claimant, a black employee, complained of race discrimination, racial harassment and constructive unfair dismissal. The Employment Tribunal upheld complaints concerning racial harassment and unlawful deductions but rejected the constructive dismissal claim. It found a workplace culture tolerating racial banter and extreme racial prejudice, but treated the relevant incidents as too remote from the claimant’s resignation and focused on an unrelated event which triggered his departure.

The appeal concerned whether the tribunal had correctly analysed continuing breach, affirmation and causation in constructive dismissal.

1. Appeal allowed. The question of constructive dismissal was remitted to the same Employment Tribunal. The decision on direct race discrimination was not disturbed.
2. The tribunal accepted that the incidents of racial harassment were capable of amounting to a fundamental breach of the implied term of mutual trust and confidence. However, it erred by isolating those incidents and treating the period before resignation as, of itself, affirmation or waiver.
3. On the tribunal’s findings, the employer’s culture of racial abuse continued until resignation. The tribunal therefore had to consider whether that continuing state of affairs amounted to a continuing breach of the trust and confidence term.
4. The event which triggered resignation was unrelated to the racial-abuse culture. That did not determine the causation issue. Applying Nottinghamshire County Council v Meikle [2004] IRLR 703, the question was whether the claimant resigned at least in part in response to the breach. Under James v Sirl & Son (Furnishers) Ltd [1997] IRLR 493, the breach need not be the sole cause of resignation.
5. On remission, the tribunal was directed to identify the contractual term relied upon, determine whether and when it was breached and whether the breach ceased, decide whether the claimant delayed so long as to affirm the contract, and determine whether he resigned at least in part in response to the breach.

• Employment Tribunal: The tribunal upheld complaints of racial harassment and unlawful deductions, but dismissed the claims for direct race discrimination and constructive unfair dismissal.
• Employment Appeal Tribunal: Appeal allowed on constructive dismissal. The issue was remitted to the same tribunal for reconsideration.