Dismissal Decision OverturnedEvery so often there comes along a case which is not madly interesting on its own facts (stay with me here) but which still serves as a useful future touchstone on a particular issue.

If your particular interest is constructive dismissal, and in particular, constructive dismissal through the route of the proverbial last straw, then last week’s Craig – v – Abellio Limited is the case for you.

Mr Craig had a series of fallings-out with Abellio over payments he said were due to him in connection with holiday and sick pay.  A substantial part of the problem appeared to be Abellio’s continued inability to get to grips with Craig’s unusual compressed schedule, working a full week’s hours but over 4 days only.  These assorted spats led ultimately to his raising a grievance about underpayment by Abellio, the investigation of which found to his considerable surprise that it was actually he who owed Abellio money, apparently some £2,000 in past overpayments.  On the internal appeal of his grievance, however, Abellio conceded that he had been underpaid by it to the tune of, *cough*, over £6,000.  Leaving aside for the moment quite what that said about the quality of the grievance investigation, Abellio agreed to pay those arrears by a set date, but then didn’t.  Craig quit the following day, citing among his reasons Abellio’s “consistent pattern of emotional abuse and calculated deceit”.

The Employment Tribunal rejected Craig’s constructive dismissal claim. It said that the earlier complaints about sickness and holiday pay had in effect all been wrapped up and resolved by the grievance appeal finding in his favour, and that the crowning failure to pay the arrears on the day committed to had been a simple and temporary administrative misunderstanding of his compressed hours arrangement and did not suggest any actual intention on Abellio’s part to default on the grievance outcome, let alone any abuse and deceit of the sort claimed by Craig.

The Employment Appeal Tribunal did not agree that Craig’s last straw argument could be dismissed so easily, and sent the case off to be looked at again by another ET.  In doing so it set out a number of principles, none new but all useful, around the interplay of last straws, fundamental breaches of contract and grievance procedures about them.  In no particular order:

  • There is no requirement that an incident relied upon by a Claimant as the last straw finally breaking the back of his will to stay employed is itself a repudiatory breach of contract, or technically, even a breach of contract at all.  While it cannot be “entirely trivial“, said the EAT, it was not a problem that the conduct might be “relatively insignificant” if it were nonetheless reasonably relied upon the Claimant as pushing him off the ledge into a resignation.  Even it were just an administrative error, fixable within a few days, the late payment of the grievance award was still a breach by Abellio of the promise to pay a material sum on a set date.  Against the whole history of the matter, it could not be seen as entirely trivial.  One or two incidents of genuine error could be overlooked, but there are limits.
  • Relatedly, the employer’s intention (or lack of intention) behind the conduct complained of is not relevant to whether that conduct constituted a breach of trust and confidence.  That is probably an over-simplification, in that even entirely trivial behaviour could take on new weight if it were shown to be motivated by the employer’s malice or deceit.  However, the converse is not true, in that the reasonableness of the employer’s conduct in its own perception will not prevent that conduct being a repudiatory breach.  Even though the usual definition of the implied term of trust and confidence is that the employer will not “without reasonable and proper cause” conduct itself in a manner “calculated or likely” to destroy or seriously damage that relationship, “reasonable and proper cause” for those purposes is an objective question and not just an issue for the employer to judge itself upon.  Therefore the fact that Abillio genuinely considered there to be confusion over what the sick pay rules actually meant did not indicate that the underpayment had been lawful. That is of course the difference between “calculated” on the one hand and “likely” on the other, and the definition above permits either.
  • Equally, the question of whether particular conduct by the employer is repudiatory for constructive dismissal purposes does not depend on the perceptions of the employee either – if he considers, however reasonably, that the employer has fundamentally breached his contract, that will avail him nothing if in objective reality it has not.  Craig’s allegations of abuse and deceit, even if that is how he genuinely felt, would gain no traction if they had no basis in fact.
  • Last, perhaps most problematically for employers, the fixing of an issue, whether through the upholding of a formal grievance or not, does not stop that issue from having been (or remaining) a fundamental breach of contract.  Craig’s eventual vindication through the grievance appeal did not therefore take away the prior history as a matter of law, only (had Abellio followed through on the payment promised) as an issue of immediate practical dispute management.  Which takes us to the logical next question – what is the benefit of a formal grievance process if even upholding it (or by extension, reaching an informal or mediated resolution to the dispute) does not necessarily make the possible breach of contract go away?  What incentives are there for the employer to try to find a suitable remedy to the employee’s complaints?  In fact, several:
    • if the employer’s conduct prior to the grievance has not yet reached a sufficient level of gravity to be a fundamental breach, a properly arrived-at resolution (again whether through a formal process or workplace mediation) will usually stop it getting there;
    • if a resolution is reached which satisfies the employee enough that he does not pursue the matter at that time, then it will not normally take too long before his inaction will be taken as his affirming or waiving the prior breach and hence losing the right to rely on it in its own right.  However, that probably does not prevent him relying upon it as background to a complaint based upon subsequent conduct by the employer;
    • an unreasonable failure to go through at least the minimum grievance process in the ACAS Code of Practice could lead to an uplift in any resulting compensation of up to 25%;
    • if the employee’s perceptions are teetering on the high-wire between stay and go, a prompt and genuine attempt to resolve his issues may persuade him that the position with the employer is not irretrievable in the longer term, and so that he should not take the legal, personal and professional risks always implicit in jumping without another role to go to.