It has been clear for a number of years that suspending an employee who is facing disciplinary allegations could amount to a breach of the implied duty of mutual trust and confidence. In London Borough of Lambeth v Agoreyo, the Court of Appeal confirmed that this is a highly fact-specific issue and that whether suspension is a repudiatory breach of contract depends on whether it is a reasonable and proper response to the allegations of misconduct.
The employee was engaged to work as a teacher at a primary school. Her class included two children with behavioural difficulties. Within a few weeks of starting work, three incidents had occurred in which the employee had used a degree of force to remove the children from the classroom. The incidents were initially reported to the school's head teacher, who responded by putting extra support for the employee in place. However, the school's executive head teacher decided to suspend the employee pending a disciplinary investigation into her conduct. The employee resigned and brought proceedings arguing that this was a repudiatory breach of contract.
Her claim failed in the county court on the basis that the employer had reasonable and proper cause to suspend, in light of its overriding duty to protect the children in its care. However, the High Court overturned that decision on appeal, finding that suspension was a knee-jerk reaction, especially because the head teacher had not initially thought that the incidents warranted disciplinary action.
The employer's appeal to the Court of Appeal was successful. The trial judge was entitled to conclude on the basis of the evidence before him that the suspension was not a repudiatory breach of contract. It was obvious that there were serious allegations of misconduct that needed to be investigated. The court had to assess whether the employer's response to the possible misconduct was reasonable and proper to allow matters to be investigated. If it was, it could not be a repudiatory breach of contract. Given the context, it was open to the judge to find that the employer had reasonable and proper cause to suspend and the High Court should not have interfered with that conclusion.
Further, the High Court had asked itself whether suspension was "reasonable and/ or necessary". This was an error of law – the test is whether there is reasonable and proper cause to suspend, not whether suspension is necessary.
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