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No cure for fundamental breach of contract !

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A recent Court of Appeal decision has held that a repudiatory breach of contract by an employer cannot be cured or amended prior to the wronged employee making a decision as to whether to treat the breach as a dismissal. Tuesday 10 August 2010 No cure for fundamental breach of contract ! A recent Court of Appeal decision has held that a repudiatory breach of contract by an employer cannot be cured or amended prior to the wronged employee making a decision as to whether to treat the breach as a dismissal. An original decision by the employment tribunal concluded that Professor Buckland had been constructively dismissed, because actions by his employer, Bournemouth University Higher Education Corp, had amounted to a fundamental breach of the duty of mutual trust and confidence. Following this, the University appealed to the Employment Appeal Tribunal (EAT) on the basis that an inquiry had been held into the events that had led to a claim of constructive dismissal by Professor Buckland which had in fact cured the breach. The University also contended that an employer should be entitled to show that his conduct lay within a range of reasonable responses. This was rejected by the EAT and they confirmed that the correct test to apply was an objective one. The Universitys appeal was allowed as the EAT held that the inquiry had indeed cured the breach. Professor Buckland then proceeded to take his case to the Court of Appeal. When considering whether an employer was in fundamental breach of contract the Court of Appeal held that the reasoning of the EAT was correct and an objective test applied; this upheld the precedent set down in the authority of Western Excavations (ECC) Ltd v Sharp which laid down without any doubt that an objective test applied. However, the Court of Appeal differentiated from the decision of the EAT by holding that once an employer had committed a fundamental breach of contract it was not possible for them to cure that breach before the employee had decided whether or not to treat the breach as a dismissal, to do so would remove the rights of the innocent party. It was made evident that there was nothing to prevent tribunals from taking a strict approach to affirmation of the breach by the employee and that a wronged party could not expect to continue with the contract for a long period of time before finding that the option to terminate was barred. For additional information please contact: Alexandra Dean of Gepp & Sons. The above is not legal advice; it is intended to provide information of general interest about current legal issues.