Contractual Disputes

Employer can not “cure” a fundamental breach of contract

The Court of Appeal in Buckland v Bournemouth University Higher Education Corporation has said that where an employer commits a breach of contract that is so serious it entitles the employee to resign, they can not “cure” the breach by taking steps to restore confidence and so prevent the employee claiming constructive unfair dismissal. All an employer can do in these circumstances is to try and make amends and persuade the employee to stay. The employee retains the right to affirm the contract or accept the breach by resigning.

One of Professor Buckland’s duties was to mark examination papers, which were routinely second marked to ensure consistency. The Professor failed the majority of students, findings supported by the second marker. The university indicated that it needed to address the cause of the high failure rate. However, the programme leader took it upon himself to re-mark the papers without informing Professor Buckland or seeking approval from the Board of Examiners. The marks awarded were not far away from the original marks, but would have elevated some students from a straight fail to a marginal zone where they could have passed. Professor Buckland complained about this as it attacked his professional credibility and an inquiry was set up to look into the unauthorised re-marking of the exam papers.

The report vindicated Professor Buckland and stated that the original marks should have been treated as final. However, he was not satisfied with the report and despite attempts by the university to mollify him which included making assurances that this would not happen again, Professor Buckland resigned and claimed constructive unfair dismissal.

The Court of Appeal had to determine two important issues:

  • Can an employer cure a fundamental breach of contract before the employee resigns by making amends?
  • Is the employer’s conduct judged objectively or on the “band of reasonable responses” test?

The Court of Appeal stated that once an employer commits a fundamental breach of contract, it can try to make amends but it remains up to the employee to decide whether to remain or to go. The law ignores the “olive branch” and does not look at whether the remedial action taken by the employer is “adequate” to cure the breach. The Court of Appeal acknowledged that the report had vindicated the Professor and it was his “petulance” that had kept the wound festering. However, the slur on Professor Buckland’s reputation and integrity remained and he was entitled to resign because of the original breach.

It went on to say that the “band of reasonable responses” test does not apply to constructive unfair dismissals and the employer’s conduct will be judged objectively. In this case, Professor Buckland felt that he had been treated badly and the tribunal had found that he was entitled to feel this way.

How quickly should the employee resign?

One other issue arose that is worth commenting on. Employees who wish to resign as a result of a fundamental breach of contract have to do so reasonably quickly, otherwise they may be taken to have affirmed the breach and lose the right to claim constructive unfair dismissal. In this case, the breach took place in September when the academic year was due to start and Professor Buckland did not resign until January and only left in June at the end of the academic year. Did he leave it too late?

The Court of Appeal said that he had not left it too late and it was reasonable for Professor Buckland to wait for the outcome of the report before resigning. It was also entirely proper for him to work a long period of notice given the fact that his students would have otherwise been adversely affected midway through the academic year.

These are unusual circumstances, but the Court acknowledged that situations such as these put the employee under enormous pressure and it is realistic for employees to stay on for a bit to consider their position. Ideally the employee should indicate in writing that they are considering their position, but it was unrealistic to expect this will happen very often and the law requires tribunals to look at the facts to decide whether he/she has affirmed the contract.