Assamoi v Spirit Pub Company (Services) Ltd – Unfair constructive dismissal and curing breaches of contract

The facts in Assamoi v Spirit Pub Company (Services) Ltd

Mr Assamoi, the Claimant, commenced employment with Spirit Pub Company (Services) Ltd (“the Respondent”), a company which runs public houses in the UK, in 1993. He was employed at the time of his resignation in 2010 as a head chef.

The Claimant had a relatively turbulent employment history at the Respondent. He was disciplined a number of times for a variety of indiscretions and moved to a new public house (“The Paxton Head”) in March 2008. In February 2009 Mr Cooper took over management of The Paxton Head.  Shortly after Mr Cooper’s joining the Respondent there was a realignment of job positions across the whole of the Respondent’s organisation, a result of a series of mergers in 2008. This entailed a new contract offer to the Claimant – an offer which he refused to sign as he believed that he would be working less hours (and being paid less) in consequence.

From 27 November 2009 to 10 December 2009 the Claimant took annual heave. Mr Cooper had previously agreed to the Claimant taking annual leave at this time if the other two kitchen staff worked all the necessary shifts to cover the Claimant’s absence. On 7 December 2009 Mr Cooper was alerted to the fact that service from the kitchen was extremely slow. Upon investigating this he found that only one member of the kitchen staff was working. Mr Cooper was angered by this and told the Claimant and the other two members of the kitchen staff to attend a meeting on 8 December 2009 to discuss the situation. The Claimant was on this date absent on holiday and none of the members of staff attended the meeting on 8 December 2009. All of the members of staff were suspended. An investigation followed and the Claimant was exonerated but Mr Cooper failed to apologise. Further, the Respondent stated that the Claimant must sign his new contract or resign. The Claimant refused this and did in fact refuse to return to work. He did in fact resign from his employment on 29 December 2009. He subsequently complained of unfair constructive dismissal to the Employment Tribunal in 2010 and an Employment Tribunal hearing was held in September 2010. The Employment Tribunal concluded that although Mr Cooper had acted in such a manner that was likely to destroy mutual trust and confidence between the parties, that nonetheless there had not been a fundamental breach of contract on the part of the Respondent and, even if there had, that the Respondent’s actions in the investigation cured any such breach. The Claimant appealed on seven grounds, the most substantive one being that an error of law had occurred in the Employment Tribunal failing to consider the case of Bournemouth University v Buckland.

The law relating to constructive dismissal & whether there has been a fundamental breach of contract

Constructive dismissal occurs when an employee resigns and can show that they were entitled to do so by reason of the employer’s conduct. Section 95(1)(1)(c) Employment Rights Act 1996 embodies this right and entitles the employee to resign with or without notice. However, the important point is whether in the circumstances the employee is entitled to resign because of the employer’s conduct.

An employee’s entitlement to resign is usually measured utilising one or the other of two tests:

1. The traditional (express) contract test
2. The breach of the implied term of mutual trust and confidence test

In order for an employee to succeed in demonstrating that they were entitled to resign by using the traditional test they must show that their employer was either guilty of conduct which was a significant breach of the contract of employment (and went to the root of the contract) or the employer was guilty of conduct which showed that they no longer intended to be bound by one or more of the essential terms of the contract. Whether the employer has breached an “essential” term of the contract depends upon what contract term they’ve breached and whether (subjectively and objectively) this term could be deemed “essential”. Terms which are normally deemed to be essential include working hours, workplace location, and remuneration.

The second “test” examines whether the employer has acted in such a way as to breach the implied term of mutual trust and confidence which previously existed between the parties. The breach of the implied term must be serious to entitle the employee to resign.

Generally, the necessary elements of a claim for constructive dismissal are as follows:

1. A repudiatory breach on the part of the employer
2. Which has been accepted by the employee as terminating the contract (their resignation); and
3. Which is one reason for the resignation (normally the significant one); and
4. The employee hasn’t taken too long to accept the breach

The Employment Appeal Tribunal’s judgment in Assamoi v Spirit Pub Company (Services) Ltd

The Employment Appeal Tribunal rejected the Claimant’s appeal. It found that the only substantive ground on which the Claimant was appealing was ground 1 – that of the error of law in failing to consider Bournemouth University v Buckland. The EAT found that the ET had addressed the necessary issues and that it had considered that there had not been a sufficiently serious breach of contract on the part of Mr Cooper to entitle the Claimant to resign. The EAT therefore found that the issue of whether the Respondent had “cured” the breach of contract was irrelevant.

Our specialist employment lawyers’ views on Assamoi v Spirit Pub Company (Services) Ltd

Claimants in constructive dismissal cases clearly have to be careful that the actions of their employer which they believe has breached their contract of employment are sufficiently serious to entitle them to resign. Whether a breach is sufficiently serious is both a subjective and an objective test. Claimant’s should therefore note that an action which appears to them to be extremely serious may not be interpreted as such by the Employment Tribunal.