Novakovic v Tesco Stores Ltd

Where an employee continues to work after an employer’s repudiatory breach, affirmation must be assessed by reference to all relevant conduct and evidence. Continuing to work and signing new contractual terms may be powerful evidence of affirmation, but they are not determinative where the employee has made unchallenged protests and reserved the position that the breach should be remedied. An Employment Tribunal errs if it decides affirmation while disregarding material evidence that the employee worked under protest.

The Claimant was demoted following disciplinary proceedings. The Employment Tribunal held that the disciplinary process and demotion amounted to a repudiatory breach of contract, but dismissed her constructive unfair dismissal and unlawful deductions claims because it found that she had affirmed the breach before resigning.

The Tribunal relied on her work in the demoted role and her written acceptance of a Team Leader contract. On appeal, the Claimant contended that the Tribunal had failed to address her unchallenged evidence that she repeatedly protested against the demotion while seeking its reversal. The central issue was whether the Tribunal had lawfully found affirmation.

1. Appeal allowed. The Employment Tribunal had erred in its determination that the Claimant affirmed the Respondent’s repudiatory breach of contract.

2. Under W E Cox Toner (International) Ltd v Crook, conduct consistent with the continued existence of the contract may establish affirmation. However, continued performance does not prevent later acceptance of a repudiation where the innocent party makes clear that rights are reserved or performance continues while the breach is to be remedied.

3. The Tribunal was required to consider all material evidence on affirmation. The Claimant’s signing of the Team Leader contract without express protest on 7 July 2014 was potentially powerful evidence. It was nevertheless impermissible to focus exclusively on that event and disregard her unchallenged evidence of oral protests to management between May and August 2014.

4. That evidence was directly relevant to whether she had worked in the demoted role under protest. The Tribunal’s finding that she gave no indication of working under protest could not stand in light of the evidence which it had not addressed.

5. The Appeal Tribunal could not substitute its own assessment of affirmation. Applying Sinclair Roche & Temperley v Heard, it remitted the narrow issue of affirmation to the same Employment Tribunal. No further oral evidence should be heard on remission.

• Employment Appeal Tribunal: Allowed the appeal and remitted the issue of affirmation to the same Employment Tribunal: [2016] UKEAT 0315_15_0103.
• Employment Tribunal (London South): Dismissed the claims after finding a repudiatory breach but holding that it had been affirmed before resignation. The decision was sent to the parties on 27 March 2015.