UK: Employers Can Dismiss For "Last Straw" Failures: A Brief Guide

Last Updated: 16 January 2014
Article by Michal Stein

Summary and implications

The High Court (the Court) has recently confirmed that the so-called "last straw" doctrine applies to employers, as much as it does to employees. In brief, the doctrine allows an employee to resign in response to an event which in itself may be insubstantial but which, taken together with a chain of earlier events, amounts to a fundamental breach of contract. The Court made clear that employers too may rely on an employee's repudiatory behaviour as the basis for bringing the employment to an end.

As far as we know, the Court's decision in Kearns v Glencore UK Limited is the first to deal with an employer's reliance on the last straw doctrine. In effect, the decision levels the playing field between employers and employees in this context.

There are lessons for employers to learn from this decision, as well as from a number of related recent judgments dealing with gross misconduct claims. We summarise these lessons briefly below, and in detail in the body of this briefing.

  • Deal promptly with regular breaches – even if they are relatively minor. This is not only good HR practice – it also ensures that you do not inadvertently "waive" an employee's breach which could, in turn, prevent you from relying on a last straw.
  • Investigate and corroborate before you dismiss. As the conduct amounting to a last straw can be fairly minor, you must make sure that the chain of events you rely on is serious enough to merit dismissal – and that you have the evidence to prove this.
  • Be clear about the nature and type of conduct which your business/organisation will not tolerate. Tailor contractual gross misconduct provisions to your business and to individual employees (based on their seniority and responsibility). By doing this, you minimise the risk that an employment tribunal will characterise the conduct as less serious and the dismissal as unfair.

The last straw doctrine in brief: an employee may resign and claim constructive dismissal based on a final, if minor, breach, in a chain of cumulative events

The last straw doctrine – in brief

  • The final act must not be utterly trivial or innocuous.
  • But, the final act need not, by itself, amount to a fundamental breach of contract.
  • Nonetheless, the final act must contribute, however slightly, to the particular breach.
  • The final act may be of a different character to the earlier acts relied on.
  • In certain circumstances, the final act may have an only tenuous time link to previous acts. (In Logan v Commissioners of Customs and Excise, the Court of Appeal allowed a last straw claim where there was a two-year gap between the incidents relied on. However, during these two years the employee was signed off work due to stress).

As set out above, the last straw doctrine allows an employee to resign in response to an event which in itself may be insubstantial but which, taken together with a chain of earlier events, amounts to a fundamental breach of contract. In the vast majority of cases, claims of this nature are based on a breach of the employer's implied duty of trust and confidence. The unique feature of the doctrine is the employee's ability to rely on a series of acts, each of which, individually may not be serious enough to justify a fundamental breach of contract. In addition, the doctrine allows an employee who tolerated certain conduct in an attempt to "smooth the waters", to rely on it later nonetheless, when he/she feels that things have reached a point of no return.

To minimise the risk of last straw claims by employees, it is advisable not to leave complaints and disagreements unresolved. Grievances that are dealt with and resolved are more likely to be regarded as "waived" by the employee. An employer will be able to argue that, as a result, such alleged breaches cannot form part of an employee's chain of events. Finally, it is critical to assess whether the alleged chain of events does, indeed, amount to the breach in question – it is possible that even taken together the breaches are not sufficiently serious to merit a claim.

In determining whether the doctrine is made out, it is necessary first to identify the "last straw" specifically, together with its impact on a previous chain of cumulative events. Next, consider objectively whether taken together, the acts amount to a breach of the implied term of trust and confidence.

Kearns v Glencore UK Limited – the facts

Mr Kearns, a trader in Glencore's oil department, was dismissed summarily for gross misconduct after he failed to attend a number of critical business meetings. Glencore believed that Mr Kearns' failure was due to excessive alcohol drinking. Mr Kearns' final failure, followed a lengthy period of heavy drinking which resulted in regular lateness to work and failures, on a number of previous occasions, to attend important business meetings.

On facts known from the judgment, it appears that Glencore did not fully investigate the last act on which it relied, nor has it carried out a formal disciplinary process, as required by the ACAS Code. Nonetheless, Mr Kearns had been told that a repeat offence would result in his dismissal. It is worth noting that Mr Kearns did not pursue an unfair dismissal claim in the tribunal.

Finally, press reports of the case suggest that Mr Kearns was ordered to pay Glencore's costs on an indemnity basis, to the tune of Ł150,000.

Whilst the Kearns decision is good news for employers, it does raise a number of important issues of which employers should take note.

  • Bear in mind that even fairly minor misconduct can amount to a last straw. But, be sure the misconduct has in fact taken place (investigation is important).
  • The Court made it clear that refusal to attend work punctually can amount to an intention to breach the contract.
  • Consider whether the last act, on its own, amounts to gross misconduct under your company policy. If so, a summary dismissal may be permissible.
  • Do not turn a blind eye to apparently minor offences if they are regular or persistent. As long as you tolerate or turn a blind eye to such conduct, you will not be able to rely on it. It is possible that Glencore put forward the last straw argument because its past failures to discipline Kearns for identical conduct could have jeopardised its case.
  • If your culture or attitudes change, inform your employees and allow a period of grace. Then, having wiped the slate clean, enforce your new stance.
  • To minimise the risk of a successful unfair dismissal (or constructive dismissal) claim, it is preferable to conduct a formal disciplinary process and issue appropriate warnings. This could serve as another indication that the chain of events was never acceptable to the employer.

Gross misconduct – say clearly what it is and always investigate

Within the context of last straw dismissals, it is worth highlighting briefly three important 2013 decisions on gross misconduct dismissal:

  • The EAT has made clear that it is not always inevitably reasonable to dismiss for gross misconduct. The point the EAT is making is simple: before deciding to dismiss, you must consider mitigating factors and the employee's previous record.
  • Another EAT division cautioned against employers using "gross misconduct" as a way of getting rid of a problem employee. At the end of the day, you need to be able to show that you have a good enough reason to dismiss, based on a reasonable investigation – which should be no less thorough than in relation to non-problem employees.
  • Ensure your policies/handbook record fully any conduct that you consider could amount to gross misconduct. Tailor this to your business. If you do that and can reasonably justify your decision, a tribunal will not be allowed to hold that the conduct in question did not amount to gross misconduct, even if in its view it did not.

To read the judgment in Kearns v Glencore UK Limited, click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Michal Stein
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