A doctrine seen in employees’ constructive dismissals is available to organisations in the High Court
Employees sometimes rely on the so-called “last straw” doctrine in constructive dismissal cases. The phrase is used to describe employees resigning and claiming constructive dismissal following an event which in itself is insubstantial but which, taken as the culmination of a series of events, amounts to a fundamental breach of contract.
According to the High Court, in a case called Kearns v Glencore, this principle can also be relied on by employers in the right circumstances. The decision is thought to be the first in which an employer has used the last straw argument to justify a summary dismissal. Potentially it goes some way towards equalising the situation of employers and employees in this context.
Facts
Kearns, a trader in Glencore’s oil department, was summarily dismissed after he failed to attend critical business meetings. The company believed his non-attendance at these meetings was due to excessive consumption of alcohol. His failure to attend was treated as the "last straw" because it followed similar incidents in which he was regularly late for work and failed to attend important business meetings.
Claim
Kearns chose to bring his claim in the High Court and not in the employment tribunal, apparently because the compensation he would have received was appreciably higher than was available from a tribunal. The employer argued that Kearns’ final failure to attend meetings was either by itself, or when considered as the latest in a string of incidents, a breach of trust and confidence (a term implied into all employment contracts) so serious that it brought the contract to an end. The employer also argued that the failure to attend the meetings was gross misconduct, entitling the company to dismiss Kearns without notice.
High court
The court agreed with the company, ruling that an employer is entitled to rely on the “last straw” doctrine when asserting a breach of the implied term of trust and confidence. In these circumstances, the employer could treat Kearns’ final absence as bringing the contract to an end or alternatively amounting to gross misconduct justifying his summary dismissal.
Law
While this decision appears to be good news for employers, it does need to be treated with caution. Kearns had been warned about his conduct and told that a repeat offence would result in his dismissal and this was exactly what happened. However, it appears the company did not carry out a full investigation into the "last straw" incident and seemingly did not follow a formal disciplinary process. Also, the employee did not apparently appeal the decision to dismiss him. Had he made an unfair dismissal claim in an employment tribunal, it seems likely the dismissal would have been procedurally unfair. The arguments would then have been about whether compensation should be reduced because Kearns had contributed to his own dismissal.
Comment
In this case the court found that his misconduct was sufficient to justify a finding of gross misconduct and that he had committed a repudiatory (fundamental) breach of the employment contract. However, what would have happened if the misconduct had been less serious, or had been of a different character to previous incidents? What if those previous incidents had not been dealt with formally under a disciplinary procedure? In slightly different circumstances, these factors could easily be exploited by a claimant in an employment tribunal.
Employers may not be surprised to hear that it would not be advisable for them to go down this route as an alternative to following clear and fair disciplinary procedures that comply with the Acas code. Employers should investigate all incidents of misconduct thoroughly and, if proven, take appropriate action even if the employee concerned is senior or highly paid. However, this case shows it may be possible to argue, just as employees sometimes do for constructive dismissal, that a final minor act of misconduct was the "last straw". It may be something to bear in mind when highly paid employees choose to bring claims in the High Court rather than a tribunal.
Graham Brown is a solicitor in the employment team of law firm Blake Lapthorn
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