In the recent case of Kaur v Leeds Teaching Hospitals NHS Trust  EWCA Civ 978 the Court of Appeal clarified the law on constructive dismissal and in particular cumulative repudiatory breach.
An employee is constructively dismissed if they resign in response to an employer’s breach of contract which is so serious as to entitle them to leave without giving notice. The 3 essential elements of constructive dismissal are as follows:
- There must be a sufficiently serious actual or anticipatory breach which goes to the root of the contract;
- The employee must resign in response to that breach (and not for some other reason); and
- The employee must not delay too long in terminating the contract otherwise the employee may be taken as having elected to affirm the contract.
There had been some debate as to whether an employee who carries on working after a fundamental breach but then resigns in response to a non-trivial “final straw” event could rely on that earlier fundamental breach. The Court of Appeal has now clarified that a breach (or series of breaches) of contract by an employer which is followed by an affirmation of the contract by the employee can be revived by an employer’s later act (or omission) in order to allow the employee to resign and claim constructive dismissal on the basis of a cumulative repudiatory breach.
This means that even where an employee affirms the contract by carrying on working the employer does not have a clean slate. A further act (or failure to act) may revive the earlier fundamental breach. A practical example of this is where an employee stays and appeals against an unfair disciplinary decision instead of immediately resigning. Going further in this particular scenario, Lord Justice Underhill said that an employee
“… exercising a right of appeal against what is said to be a seriously unfair disciplinary decision is not likely to be treated as an unequivocal affirmation of the contract; and, even if it were, its upholding on appeal would revive her right to resign”.