COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM EMPLOYMENT APPEAL TRIBUNAL
His Honour Judge Prophet
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE DYSON
LORD JUSTICE WALL
| LONDON BOROUGH of WALTHAM FOREST
|- and -
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Mr F. Edward Jnr (speaking with the permission of the Court) for the Respondent
Crown Copyright ©
Lord Justice Dyson:
"Following my senior managers' recent less favourable act and victimisation against myself by refusing to pay my full July and August salary by reason of my employment tribunal hearing against the Council for racial discrimination, harassment and victimisation, I see this act not only as a breach of the expressed terms of my contract of employment but also an act that has destroyed my trust and confidence in my employer and its senior management."
(a) "Considering the ET own various findings at paragraph 90 (and also paragraphs 83 to 87, 36 to 39 and 40) whether the ET misapplied the law as well as applying the wrong test under the doctrine of "last straw" when they held that there were sufficient breaches of the implied term of trust and confidence in which the Appellant was entitled to resign but that his claim failed because "the last straw that broke the camel's back was perfectly reasonable and justifiable conduct of his employer acting fully in accordance with the terms of the Appellant's contract and the terms incorporated in it."" (Ground (viii)); and
(b) "Whether, on the ET own findings of fact, there were sufficient findings entitling the Appellant in law to resign apart from the last straw principle." (Ground (ix)).
"19. This appeal has caused us to consider the following question – "Whether there can be a constructive dismissal in a situation where, whatever may have previously occurred, the final act which precipitated resignation is found by the Employment Tribunal to be reasonable conduct by the employer". We therefore grant Mr Weiniger's request for leave to appeal to the Court of Appeal."
The decision of the ET
"This Tribunal considers that the finding that there was in use a managerial technique which involved shouting at employees and threatening them with disciplinary action supports a finding of an unacceptable management practice by this Tribunal."
"90. The Applicant has to show that he resigned in circumstances in which he was entitled to resign without notice by reason of his employer's contract (sic). The Applicant has to show that there was serious breach of contract, or a breach which was the last in a series of breaches; that he resigned in response to the breach, and that he resigned within a reasonable time without affirming the contract. The Applicant in this case resigned because he was not paid wages for the days in July and August 2001 he was attending the Employment Tribunal. He was not paid because he was not available for work and his absence was not covered by his contract. There was no breach of contract at all never mind on[e] which would entitle the Applicant to resign without notice. The Applicant did not resign because of the Kush Reference or because of Mrs Chown's conduct towards him both of which may have been breaches of the implied term of trust and confidence. He resigned because he was not paid. The Applicant also says it was the last in a series of actions such as to amount to a breach of trust and confidence. To this end the Applicant relies on the history including his treatment by Mrs Chown and the reference from Mr Driscoll. He may not have resigned in response to these to these but taken together with non payment of wages in the Employment Tribunal he was entitled to resign and claim he was dismissed. The difficulty for the Applicant is that looked at objectively the straw that broke this camels back was perfectly reasonable and justifiable conduct of his employer acting fully in accordance with the terms of the Applicant's contract and the terms incorporated in it. The Applicant was not dismissed. There was no dismissal and his complaint of unfair dismissal fails and is dismissed."
The reference to "contract" in the first line must be in error for "conduct".
The decision of the EAT
"11. In its comprehensive judgment in the instant case, the Employment Tribunal, at paragraph 90, indicate that because the final act, which caused Mr Omilaju to resign, was not a breach of contract, but, indeed, fully in accordance with the terms of his contract there could be no constructive dismissal. They also added that the action of the employers was a reasonable one. In general terms, Mr Weiniger submits that the Tribunal approached the matters correctly, and reached conclusions which it was entitled to reach on the evidence it received. That, in general terms, is a powerful argument and this Tribunal does not seek normally to disturb an Employment Tribunal decision approached in that way. The difficulty arises, however, in the terms of paragraph 90, which we have set out above, and which does indicate some degree of ambiguity and possible confusion on the part of the Employment Tribunal.
12. However we have also had an interesting argument from Mr Weiniger, in respect of what can or cannot constitute a "last straw" situation. Mr Weiniger says that in order to constitute a "last straw" the conduct of the employer has to be unreasonable in some way, and, indeed, this Tribunal expressly found that the employer's actions in respect of the non payment of wages was reasonable.
13. The difficulty about that argument, it seems to us, is that in all "last straw" situations, matters turn to some extent on the perception of the employee at the time when he feels that he has been treated unreasonably or unfairly by his employer. It is that which causes him to decide to resign, bringing into the picture, as is usually the case and, indeed, is the case here, previous actions by the employer about which he had complained. It seems to us that it would be wrong to say that any possibility of a finding of constructive dismissal in such a situation is negatived if the final action of the employer is subsequently found by the Employment Tribunal to have been reasonable.
14. The case law indicates that the function of the Employment Tribunal when faced with a series of actions by the employer is to look at all the matters and assess whether cumulatively there has been a fundamental breach of contract by the employer. We are unable to find in the judgment of this Employment Tribunal the answer to that question."
The first issue
1. The test for constructive dismissal is whether the employer's actions or conduct amounted to a repudiatory breach of the contract of employment: Western Excavating (ECC) Ltd v Sharp  1 QB 761.
2. It is an implied term of any contract of employment that the employer shall 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: see, for example, Malik v Bank of Credit and Commerce International SA  AC 20, 34H-35D (Lord Nicholls) and 45C-46E (Lord Steyn). I shall refer to this as "the implied term of trust and confidence".
3. Any breach of the implied term of trust and confidence will amount to a repudiation of the contract see, for example, per Browne-Wilkinson J in Woods v WM Car Services (Peterborough) Ltd  ICR 666, 672A. The very essence of the breach of the implied term is that it is calculated or likely to destroy or seriously damage the relationship (emphasis added).
4. The test of whether there has been a breach of the implied term of trust and confidence is objective. As Lord Nicholls said in Malik at page 35C, the conduct relied on as constituting the breach must "impinge on the relationship in the sense that, looked at objectively, it is likely to destroy or seriously damage the degree of trust and confidence the employee is reasonably entitled to have in his employer" (emphasis added).
5. A relatively minor act may be sufficient to entitle the employee to resign and leave his employment if it is the last straw in a series of incidents. It is well put at para  in Harvey on Industrial Relations and Employment Law:
" Many of the constructive dismissal cases which arise from the undermining of trust and confidence will involve the employee leaving in response to a course of conduct carried on over a period of time. The particular incident which causes the employee to leave may in itself be insufficient to justify his taking that action, but when viewed against a background of such incidents it may be considered sufficient by the courts to warrant their treating the resignation as a constructive dismissal. It may be the 'last straw' which causes the employee to terminate a deteriorating relationship."
"(3) The breach of this implied obligation of trust and confidence may consist of a series of actions on the part of the employer which cumulatively amount to a breach of the term, though each individual incident may not do so. In particular in such a case the last action of the employer which leads to the employee leaving need not itself be a breach of contract; the question is, does the cumulative series of acts taken together amount to a breach of the implied term? (See Woods v W. M. Car Services (Peterborough) Ltd.  ICR 666.) This is the "last straw" situation."
" It seems to us that there is some ambiguity there, but because of the action we have decided to take in this case, which we shall come to in a moment, it will be helpful if the Employment Tribunal, in due course, can clarify the position on that matter."
The second issue
Lord Justice Wall:
Lord Justice May: