Kerry Foods v. Lynch
Employment Appeal Tribunal
An employer's service of a lawful notice terminating a contract could not give rise to a breach of the implied trust and confidence term. The service of the lawful notice together with the offer of continuous employment on different terms could not amount to a repudiatory breach of contract.
The appellant employer (K) appealed against a decision of the employment tribunal that it had unfairly dismissed the respondent employee (L). L had been employed by K as a manager and his terms and conditions provided that he work a five-day week. K had indicated to L that it intended to persuade all managers to work a six-day week. L had objected to the change and K wrote a letter to him indicating that it intended to terminate L's current contract in the absence of his agreeing to the new terms and to re-engage him under a new contract containing the different terms. Having failed to negotiate a redundancy package, L resigned and complained that the proposed changes to his terms and conditions had seriously damaged the relationship of trust and confidence between the parties. The tribunal found that K had been constructively dismissed and that while L had provided lawful notice, it had failed to establish a potentially fair reason for the dismissal and it had been unnecessary to proceed to consider the question of reasonableness under the Employment Rights Act 1996 s.98(4). K argued that the tribunal had been (1) wrong to conclude that it had failed to establish some other substantial reason for dismissal; (2) wrong in law in finding K to be in repudiatory breach such as to found constructive dismissal.
(1) The findings of fact plainly showed that the changes to the number of days worked would be of advantage to K. The tribunal had been bound as a matter of law to find that K had shown some other substantial reason for the dismissal, if it had taken place, and then to proceed to consider reasonableness under s.98(4) of the Act. (2) The facts in the instant case did not give rise to a breach of the implied trust and confidence term. K had provided lawful notice of termination, which could not constitute a breach of the implied term. It was not appropriate to apply the implied term of trust and confidence to a dismissal, Johnson v Unisys Ltd (2001) UKHL 13 , (2003) 1 AC 518 followed. K's service of a lawful notice of termination together with an offer of continuous employment on different terms could not amount to a repudiatory breach of contract. There had been neither a breach of the existing terms nor an anticipatory breach in indicating lawful termination of the contract on proper notice. L had not resigned in circumstances amounting to a constructive dismissal.
Counsel for the appellant: Paul Rose QC.
 IRLR 680