Monday, 24 August 2009

Employer's Honest Mistake Cannot be a Fundamental Breach

Case in Point:

Cantor Fitzgerald International v Callaghan and ors, [1999] ICR 639, CA (and [1999] IRLR 234) is a famous authority to the employment hack but easily forgotten when looking for a case where the employee is looking to claim constructive dismissal on the basis that the employer has not paid them (albeit accidentally)

The ET will always look at the circumstances of the case and it is likely that the employer would only become prone to a finding of fundamental breach and thus constructive dismissal if the accident repeated itself. This case can be used as an authority to protect the employer when accidents has happened. Find it for free on the Baillie website!

In his judgment in the earlier Cantor Fitzgerald case Lord Justice Judge said this:
"In my judgment the question whether non-payment of agreed wages or interference by an employer with a salary package is or is not fundamental to the continued existence of a contract of employment depends on the critical distinction to be drawn between an employer's failure to pay, or to delay in paying, renewed remuneration and his deliberate refusal to do so. Where the failure or delay constitutes a breach of contract, depending on the circumstances this may represent no more than a temporary fault in the employer's technology, an accounting error or simple mistake, or illness, or accident, or unexpected events (see, for example, Adams v Charles Zub Associates Limited [1978] IRLR 551). If so it would be open to the court to conclude that the breach did not go to the root of the contract. On the other hand if the failure or delay in payment were repeated and persistent, perhaps also unexplained, the court might be driven to conclude that the breach or breaches were indeed repudiatory.

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