Factual and Procedural Background
The case concerns a dispute between the Plaintiff, an academic holding a chair in environmental archaeology at the Defendant university, and the Defendant university itself. The Plaintiff was responsible for marking students' examination papers, which were subject to routine second-marking. In 2006, the Plaintiff failed 14 of 16 resit students. Subsequently, the programme leader re-marked these papers without proper authority, prompting a further re-marking by another staff member. The Plaintiff protested this process, leading the university to establish an inquiry chaired by a senior professor. The inquiry vindicated the Plaintiff's original marks but did not fully restore his professional standing. Dissatisfied with the inquiry's findings and the conduct of certain university officials, the Plaintiff resigned effective several months later and brought proceedings for unfair constructive dismissal.
The Employment Tribunal found that the Defendant had committed a fundamental breach of contract by procuring the unauthorised re-marking, which was an affront to the Plaintiff's integrity. The Tribunal also considered whether the subsequent inquiry report had cured the breach and concluded it had not. However, it did not determine whether the dismissal was unfair. The Employment Appeal Tribunal (EAT) allowed the Defendant's appeal, holding that the inquiry report had objectively cured the breach, thereby negating constructive dismissal. The EAT also held that the Tribunal had erred in applying a subjective test rather than an objective one regarding cure. The present appeal and cross-appeal address these and related legal issues.
Legal Issues Presented
- Whether the conduct of an employer alleged to have committed a fundamental breach of the employment contract should be assessed by a unitary objective test or by a "range of reasonable responses" test.
- Whether an employer who has committed a fundamental breach of contract can cure that breach while the employee is considering whether to treat it as a dismissal.
- If cure is possible, whether the Employment Tribunal's finding that the Defendant university had failed to cure the breach was legally sound and factually tenable.
- Whether the Defendant university advanced a triable case that, if there had been a constructive dismissal, it was fair, and if so, whether the issue should be remitted to the Employment Tribunal.
Arguments of the Parties
Defendant's Arguments (Cross-Appeal)
- The Defendant contended that the correct test to determine whether the employer's conduct amounted to a fundamental breach is the "range of reasonable responses" test rather than a unitary objective test.
- It argued that its conduct, although criticised, fell within the range of reasonable responses to the situation confronting it.
- It maintained that the inquiry report had cured the breach before the Plaintiff accepted it, negating constructive dismissal.
- It sought a remission on the issue of fairness if constructive dismissal were found.
Plaintiff's Arguments (Appeal)
- The Plaintiff argued that the correct legal test for repudiatory breach is a unitary, objective test, rejecting the "range of reasonable responses" test at the breach stage.
- He contended that the law does not recognise a doctrine allowing an employer to cure a fundamental breach once committed, and thus the breach was not cured by the inquiry report.
- He maintained that the Tribunal's subjective approach to cure was appropriate and that the breach remained uncured.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Mahmud v BCCI [1998] AC 20 |
Established the objective test for fundamental breach of the implied term of mutual trust and confidence in employment contracts. |
The court endorsed the "unvarnished Mahmud test" as the correct approach to determine repudiatory breach, rejecting the "range of reasonable responses" test at this stage. |
| Western Excavating v Sharp [1978] ICR 221 |
Distinguished the objective test for repudiatory breach from the unreasonableness test of constructive dismissal. |
Supported the rejection of the "range of reasonable responses" test in assessing whether a fundamental breach occurred. |
| Abbey National plc v Fairbrother [2007] IRLR 320 |
Discussed the employer's conduct and reasonableness in the context of breach and dismissal. |
Referenced in relation to the Defendant's submission that reasonableness could be considered at the breach stage. |
| Claridge v Daler Rowney Ltd [2008] ICR 1267 |
Qualified the application of reasonableness in employment breach cases. |
Considered in the analysis of the appropriate test for repudiatory breach. |
| Stocznia Gdanska S A v Latvian Shipping Co Ltd (No 2) [2002] 2 Ll Rep 236 |
Clarified that an anticipatory breach can be withdrawn before acceptance, but no doctrine of cure applies after breach completion. |
Supported the argument that no legal doctrine allows cure of a completed repudiatory breach. |
| W.E. Cox Toner Ltd v Crook [1981] ICR 823 |
Confirmed that general contract principles apply to repudiation and acceptance in employment contracts. |
Referenced to emphasize the absence of a cure doctrine and the role of affirmation or acceptance by the innocent party. |
| Miles v Wakefield District Council [1987] 1 AC 539 |
Applied general contract principles to employment law, particularly regarding partial withdrawal of services and salary obligations. |
Used to argue that employment contracts are subject to general contract law principles without special cure doctrines. |
| Sainsbury v Hitt [2003] IRLR 23 |
Established that the fairness of dismissal should be assessed by the "range of reasonable responses" test. |
Referenced to clarify that this test applies at the fairness stage, not the repudiatory breach stage. |
| Amnesty International v Ahmed [2009] ICR 1450 |
Expressed reservations about applying the "range of reasonable responses" test to constructive dismissal. |
Supported the court’s endorsement of a unitary objective test for repudiatory breach. |
| Farnworth Finance Facilities Ltd v Attryde [1970] 1 WLR 1053 |
Addressed reservation of rights and continuation of contract performance without losing right to accept repudiation. |
Cited to illustrate that continued performance does not amount to acceptance of breach if rights are expressly reserved. |
Court's Reasoning and Analysis
The court began by identifying two pivotal unresolved questions in employment law: the appropriate legal test for employer conduct constituting a fundamental breach, and whether an employer can cure such a breach prior to acceptance by the employee.
It endorsed the Employment Appeal Tribunal’s detailed analysis and reaffirmed the "unvarnished Mahmud test" as the correct objective standard to determine whether an employer’s conduct constitutes a fundamental breach of the implied term of mutual trust and confidence. The court rejected the Defendant's argument that the "range of reasonable responses" test should apply at this stage, clarifying that this test is reserved for the statutory fairness assessment of dismissal.
Regarding the issue of cure, the court examined whether a fundamental breach, once committed, can be cured by the employer before the employee accepts it as such. It noted the absence of any decided case establishing a doctrine allowing cure of a completed repudiatory breach. While acknowledging the practical desirability of such a doctrine in employment relations, the court concluded that it could not introduce it without undermining established contract law principles. The court distinguished between anticipatory breach, which can be withdrawn before acceptance, and completed breach, which cannot be undone.
Applying these principles to the facts, the court found that the Employment Tribunal’s conclusion that the breach had not been cured was objectively tenable and that the Employment Appeal Tribunal had erred in substituting an objective test with a subjective one based on the Plaintiff’s feelings.
On the question of fairness and the "range of reasonable responses" test, the court observed that the statutory framework for unfair dismissal applies only if there is a dismissal. Since the court found constructive dismissal occurred, the issue of fairness would normally be considered. However, in this case, the Defendant had not consciously dismissed the Plaintiff or treated anything as a sufficient reason for dismissal, rendering the fairness question moot.
Finally, the court expressed a preference for avoiding unnecessary remittals to lower tribunals, emphasizing judicial economy and the avoidance of protracted litigation.
Holding and Implications
The court’s final decision was to ALLOW THE APPEAL AND DISMISS THE CROSS-APPEAL, thereby restoring the Employment Tribunal’s original determination.
This holding confirms that the correct legal test for determining whether an employer has committed a fundamental breach of contract is an objective, unitary test, not the "range of reasonable responses" test. It also establishes that, under current law, a completed repudiatory breach cannot be cured by the employer before acceptance by the employee. The decision clarifies the interplay between contract law and employment law in the context of constructive dismissal, reinforcing the employee’s right to choose whether to accept a breach as terminating the contract.
The direct effect is that the Plaintiff’s claim for constructive dismissal is upheld on the basis that the breach was not cured. No new precedent was created regarding the fairness of dismissal since that issue was not reached. The ruling underscores the importance of clear legal standards in employment disputes and cautions against judicial expansion of contract doctrines without compelling justification.