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.

TUPE Accuracy of Information – Employer’s Obligations

In Royal Mail Group Ltd. v Communication Workers Union, the Court of Appeal has upheld the decision of the Employment Appeal Tribunal (EAT) that the test for determining whether or not an employer has met its obligations under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) to provide information to enable consultation with the appropriate representatives is not an objective test.

The issue arose when the Royal Mail Group (RMG) transferred a number of post offices to W H Smith. When a transfer to which TUPE applies takes place, Regulation 4 provides for the circumstances in which employees’ contracts of employment are automatically transferred to the new employer. Regulation 13 obliges the transferor to provide information to the representatives of affected employees, including information on the ‘legal, economic and social implications of the transfer (Regulation 13.2(b)). Failing to comply with these obligations can result in an employer having to pay a compensation award of up to 13 weeks’ pay for each affected employee.

RMG had a policy of giving those employed in branches being transferred the choice of redeployment to another branch, under a mobility clause in their contracts, or voluntary redundancy. In its view, no automatic transfers would take place in this instance so it did not inform the Communication Workers Union (CWU). Furthermore, it contended that its only obligation would have been to inform and consult on what it believed the legal, economic and social implications of the transfer were, even if those beliefs turned out to be incorrect.

The CWU argued that the automatic transfer principle did apply to some of the employees, that RMG had no genuine belief that there would not be any automatic transfers under TUPE and that Regulation 13.2(b) places an absolute obligation on the employer to provide accurate information so that employees can make an informed decision as to whether or not they wish to transfer.

With regard to Regulation 13.2, the Court of Appeal held that the language is ‘not the language of strict liability or warranty’ and the EAT had therefore been correct in its view that it only obliges an employer to describe what it genuinely believes are the legal, economic and social implications of the transfer. When a transfer of a business or part of a business is planned, employees do need to know where they stand and it is for the employer to know what the legal implications are so that employees can be informed accordingly. However, it does not follow that the employer must guarantee the accuracy of the law. The test as to whether it has fulfilled its obligations to employees in this respect is subjective. However, an employer which does not give consideration to the legal implications of the transfer will not be able to defend its view as being genuine.

The case was remitted for a fresh hearing