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Another constructive dismissal question: can an honest mistake still put employer in breach?

15 August 2012 #Employment


The Employment Appeal Tribunal has recently considered whether an employer committed a fundamental breach of contract when it mistakenly interpreted the meaning of a contractual document. This was the issue in Roberts –v- The Governing Body of Whitecross School. The case confirms that even a honest and genuinely held view about the contractual effect of a document can still put the employer in fundamental breach of contract.

The facts

Mr Roberts had worked for Whitecross School for a number of years and went on sick leave due to work-related stress and depression.

The school was aware that a collective agreement was in operation which provided that full pay was payable for “absences arising from accidents, injury or assault at work” and that the view of the National Union for Teachers was that this agreement applied to work-related stress. Nevertheless the school took the view that the collective agreement did not apply to Mr Roberts’ illness and wrote to him to confirm that he would receive half pay. As a result, Mr Roberts resigned.

The EAT’s decision

The EAT concluded that the school’s decision to pay half pay was a fundamental breach of contract, and noted:

  • A pay term goes to the root of the employment contract
  • Where an employer intends to reduce pay to a material extent and that intention does not arise from an error or a simple mistake, it is likely to amount to a fundamental breach of contract
  • The school was aware that the interpretation of the collective agreement was not clear cut and did more than insist its view was correct, as the school had a settled intention to implement the pay reduction.

 

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at employmentunit@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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