Countdown to Buckland – 15 days to go – Employment Law Advocates

In Buckland, Judge Clark sets out a four stage test. Firstly, is there a breach of trust and confidence? Secondly, does acceptance of that breach entitle an employee to resign, using the authority of Sharp v Western Excavating? Thirdly, is the dismissal for a potentially fair reason? Fourthly, is the dismissal fair? I want to concentrate on the second stage and it is necessary to go straight to the case of Woods.

My first observation is that Woods expresses some reservations about Sharp, which it is said has led employers to act totally unreasonably while stopping just short of a breach of contract. Justice Browne-Wilkinson feels that the implied term of trust and confidence can be used to fill this gap. More strikingly, in Malik, the House of Lords does not cite Sharp at all, which suggests that, if the two tests come into conflict, then Woods should prevail, notwithstanding the fact that Sharp is the decision of a higher court.

And there¬†may be¬†a conflict. Whereas Sharp emphasises that, once¬†a breach is found,¬†a tribunal¬†must go on to consider whether an employee is entitled¬†to resign, Woods says that a breach of the implied term is necessarily repudiatory, a point which has been followed in Morrow v Safeway Stores. However, “the Tribunals’ function is to look at the employer’s conduct as a whole and determine whether it is such that its effect, judged reasonably and sensibly, is such that the employee cannot be expected to put up with it”. In other words, it is a requirement of the test to consider whether an employee is entitled to resign but this is part of the test of whether there is a breach in the first place, not whether the breach is repudiatory. Buckland is wrong to divide this into two stages. Woods, as followed in Malik, creates an entirely new kind of constructive dismissal, to which principles different from those in Sharp will apply.

The reason is obvious. It is utterly artificial to say that an act breaches trust and confidence but does not entitle an employee to resign. If an employee is not entitled to resign then trust and confidence has not been breached. A stage-like approach is appropriate for a contractual analysis based on the breach of an express term but not for a breach of the implied term. I would go further and say that stages three and four become equally nonsensical when the implied term has been breached. Clearly it is hard to see how a common law concept can incorporate the statutory test of fairness but, fortunately, it is unnecessary to suggest that it does. This is because, as I will go on to argue, the bar for breaching the implied term is higher than for failing the statutory test so, it the latter is met, there can be no breach.