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Affirmation of a repudiatory breach of the employment contract

How should tribunals approach the question of whether an employer’s repudiatory breach of an employment contract has been affirmed by the employee in a claim for constructive dismissal? The question was considered by the EAT in Chindove v Morrisons Supermarkets plc, where it was decided that a mere delay in resigning after such a breach does not in itself amount to affirmation. There must be evidence that the employee has made a choice to affirm the contract, which is judged by the employee’s conduct.

If an employer has committed a repudiatory breach of the employment contract then the employee has two choices. They can accept the breach by resigning, or waive the breach and affirm the contract. If an employee does not resign within a reasonable amount of time and continues working as normal after the breach and accepting pay, they could be regarded as having impliedly affirmed the employment contract and waived the breach. However, what constitutes a ‘reasonable amount of time’ amounts to a legal grey area. Lord Denning adopted a strict contractual approach in Western Excavating v Sharp, stating that if the employee ‘continues for any length of time without leaving, he will be regarded as having elected to affirm the contract and will lose his right to treat himself as discharged’.

However, it has been recognised that a more flexible approach is required when assessing the breach of an employment contract, as applying strict contractual principles does not take into account the reality of the employment relationship. The decision as to whether an employee should resign and attempt to claim constructive dismissal could have massive consequences for the individual, who could be left without a job and income. Therefore, the employee should be granted a small amount of time to consider their options and take advice. The decision of the EAT in W E Cox Toner (International) v Cox recognised that the employee’s conduct could have an effect on what a ‘reasonable amount of time’ is and whether the breach of their employment contract has been affirmed. If the employee makes it apparent that they object to the employer’s conduct, such as by instigating a grievance procedure, then they cannot be taken to have accepted the breach.

Now, the EAT has placed an even larger emphasis on the employee’s conduct through its decision in Chindove. Here it was considered whether an employee who waited 6 weeks before resigning after their employer’s breach of contract had impliedly affirmed the breach. The claimant had brought an internal grievance after a discriminatory act by a fellow employee but it was not properly investigated, which amounted to a repudiatory breach by the employer. The EAT stated that the entire issue of affirmation was a question of conduct, not time, and it must be apparent that through the employee’s conduct he has waived the breach. Such conduct can include a failure to resign within a reasonable amount of time, which demonstrates that the employee has chosen to affirm the employment contract. A conduct-based approach makes the context of the resignation decisive in establishing whether it was a response to the employer’s breach of contract and whether it was within a reasonable amount of time. In this case, as the employee had no other apparent reason for resigning, it was decided that his resignation must have been in response to the employer’s breach. Furthermore, the employee had worked for the employer for 9 years, a relatively long period of time, and so it could not be inferred from the employee’s conduct that a 6 week delay meant he had not invoked his right to leave.

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Rachel O’Connell, Solicitor & Director, Just Employment Ltd.

This entry was posted in Employment Contracts, Employment Law, Employment Tribunals, Just Employment Solicitors and tagged , , , . Bookmark the permalink.

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