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Case law update - an employer cannot cure a fundamental breach of contract once it has been committed

Published: 20th May 2021
Area: Employment
The Employment Appeal Tribunal reaffirms that an employer cannot cure fundamental breach, once it has been committed.

A case was brought against Essex County Council by Ms Flatman, which was heard in the Employment Appeal Tribunal (EAT) in January 2021.  The EAT rejected the notion that an employer can cure a fundamental breach of contract before the employee resigns and claims constructive dismissal, reaffirming the position.

To succeed in a constructive dismissal case, what must an employee prove?

An employee must prove that the:

  1. employer committed a fundamental breach of an express or implied term of the contract;
  2. employee resigned as a result of the breach; and
  3. employee did not waive the breach and/or affirm the contract.
Background to the case

The employer breached the implied duty to provide a safe work environment; this was despite repeated requests to provide manual handling training over many months by Ms Flatman. The breach became fundamental due to the increased and continuing risk and actual harm caused.

Ms Flatman was signed off work due to back pain and the breach became fundamental by the time she went off sick, at the latest. On her return, her employer assured her that she would not be involved in lifting a disabled pupil (previously required in her daily duties), would be assigned to another class and that steps were being taken to provide training.  She resigned and claimed constructive unfair dismissal.

Ms Flatman’s claim was unsuccessful at the employment tribunal because at the point of her resignation the employer had given a commitment to providing the necessary training and communications at the point of her return, demonstrating genuine concern for her health and safety.  She appealed to the EAT.

The EAT found that the tribunal was incorrect to look at the overall picture at the point of resignation, instead of considering whether the point of fundamental breach of contract had been reached at an earlier stage in the unfolding events.

What are the key points from this case?

This case demonstrated that the focus should be on whether, at any point during the relevant period, the breach of contract by the employer became so serious that it became fundamental. It reaffirms the principle that once a fundamental breach has taken place, any action taken after that point was not capable of curing the breach.

Can an employee lose the right to claim constructive dismissal?

Attempts to rectify a breach may be relevant to the question of whether the contract had been affirmed - an employee who has affirmed their contract does lose the right to claim constructive dismissal.

Affirmation takes place when an employee does something that contradicts an intention to accept the repudiation and resign.    Remaining in employment after a breach has been remedied may, in certain circumstances, lead to a finding that the contract was affirmed by the employee.

What does this recent case highlight for employers?

In conclusion, once an employer has acted in a fundamental breach of contract, the employee is entitled to resign and claim constructive dismissal.  Action taken by the employer subsequent to the fundamental breach cannot cure the breach, although in most cases it will still be a sensible step to try and remedy the issue.

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If you have any queries about how the outcome of the above case law may affect your business, contact a member of your local employment team.

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