Andre Thebault (Claimant) v Homebuyer Financial Services Ltd (Respondent)
The Claimant brought a claim against his former employer the Respondent:-
a) for constructive dismissal;
b) wrongful dismissal (on the basis of failure to give notice to terminate);
c) unpaid (accrued but untaken) holiday pay; and
d) breach of contract (failure to pay a bonus for work undertaken by the Claimant during October 2017).
(a) to d) hereinafter called “the Claims”.)
The Law
Article 61 of the Employment (Jersey) Law 2003 (“Employment Law”) states that an employee shall not be unfairly dismissed.
The legal test required to establish a successful complaint for constructive dismissal, must meet four conditions:
a) the employer must be in breach of a contractual term (either an express term or an implied term);
b) the breach of contract must be fundamental, amounting to a repudiatory breach of contract;
c) the employee must resign in response to the employer’s repudiatory breach of contract; and
d) the employee must not delay too long in terminating the contract; otherwise the breach may be found to have been waived and the contract affirmed.
Mutual trust and confidence
A breach of contract may be in the form of a breach of an express or an implied term. One of the fundamental implied terms in relation to a contract of employment is ‘mutual trust and confidence’. Case law has helped to assess what this unwritten implied term is. Every Contract of Employment contains an implied duty that neither employer nor employee will act so as to breach the duty of mutual trust and confidence that exists between them without good reason. In Malik v BCCI [1997] UKHL 23, the House of Lords stated:
“… the employer will not, without reasonable and proper cause, conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee.”
Therefore, before finding that there has been a breach of the implied term of mutual trust and confidence, the Tribunal must be satisfied both that:
a) there was conduct which destroyed or seriously damaged trust and confidence between employer and employee; and
b) the employer’s conduct was done without reasonable and proper cause.
Any breach of the implied term of mutual trust and confidence will be a fundamental breach of the employment contract and will therefore always be repudiatory (Morrow v Safeway Stores [2002] IRLR 9).
Affirmation
An employee’s delay in resigning in response to a repudiatory breach by the employer is considered by the Tribunal when deciding whether or not the contract has been affirmed. However, delay in and of itself will not lead automatically to the conclusion that the employee has affirmed. Instead, there must be an event which indicates affirmation and the Tribunal must look at all relevant circumstances to establish whether, on the facts of each case, the employee affirmed the contract through their conduct.
Course of conduct and the ‘last straw’
In Maclagan v States Employment Board 79/15 it was confirmed that a course of conduct can cumulatively amount to a repudiatory breach of the implied term of trust and confidence, entitling an employee to resign and claim constructive dismissal. A ‘last straw’ incident does not, by itself, have to be repudiatory in its nature, but it must contribute to the breach of the implied term of trust and confidence, in circumstances where:
a) one of the events in the course of conduct was serious enough in itself to amount to a repudiatory breach of contract; and
b) the employee did not treat the breach as such by resigning.
The failure by the employee to resign does not automatically mean that the employee has affirmed the contract.
Conclusion
Did the Claimant affirm the contract?
In reaching the decision on this point, the Tribunal took particular note of the following facts:
a) the repudiatory breach of contract took place some six months before the Claimant’s resignation;
b) there was no series of acts or ‘last straw’ incident which could ‘resurrect’ a previous repudiatory breach;
c) the Claimant participated in the Disciplinary Hearing and chose to file the Grievance in accordance with the Respondent’s internal procedures;
d) the Claimant only raised a formal grievance four months after the breach;
e) the Claimant asserted that he delayed resigning in the hope that the disciplinary and grievance processes would conclude in his favour; and
f) the Claimant was absent on sick leave between 1 November 2017 and 18 May 2018.
The Tribunal concluded that the Claimant waived the Respondent’s breach and affirmed the contract. Consequently, the Respondent did not constructively dismiss the Claimant. The Claimant resigned and his claim of constructive dismissal was unsuccessful. The parties agreed that the Respondent owed the Claimant holiday pay for the period when he was absent on sick leave between 1 January 2018 and 18 May 2018. This was on the basis statutory holiday entitlement continues to accrue during sick leave.
Take Away Points
1. Delay in bringing a claim will not lead automatically to the conclusion that the employee has affirmed;
2. There must be an event which indicates affirmation by the employee and the Tribunal must look at all the relevant circumstances to establish whether, on the facts of each case, the employee affirmed the contract through their conduct; and
3. A ‘last straw’ incident does not, by itself, have to be repudiatory in its nature, but it must contribute (however slightly) to the breach of the implied term of trust and confidence.
If you need advice on your employment situation or you would like to discuss your internal policies and training needs please get in touch with our Employment Team below:
Contact
John Borg
Advocate
john.borg@bcrlawllp.com