Taking from the Till: Duress and the Objective Test for Gross Misconduct

Two employees, the same missing money. One dips into the till on a Friday. The other pockets the day's takings, drives home, and remembers the mistake at eleven that night.

Objectively, the cash left the premises either way. Strip out the reason and both are repudiatory breaches.

The comparison is not mine. It comes from the grounds of appeal in XX v YY [2026] EAT 89, where Benjamin Phelps, for an assistant head teacher, deployed it against a tribunal which had held that her reasons for doing what she did could make no difference to whether she had repudiated her contract. The Employment Appeal Tribunal held that they could.

Four lines on the contract claim

The claimant was an assistant head teacher with more than twenty years in education. Between mid-2015 and August 2018 she was in a coercive and controlling relationship. In 2016 she sent a message to a person she understood to be a boy under the age of eighteen, asking whether he was a virgin. She sent it under what both the school and the tribunal called duress: she feared that if she refused, she and her children would be seriously harmed.

She then said nothing for eighteen months. The matter surfaced only when the man she had been in the relationship with reported it to the school himself.

The school suspended her, involved the local authority designated officer, convened a multi-agency safeguarding hub and contacted the police. After a three-day disciplinary hearing she was summarily dismissed in June 2020 on two allegations: the message and the silence that followed it.

She brought claims of discrimination arising from disability — it was accepted that a recurrent depressive disorder had left her vulnerable to coercive control — unfair dismissal, and wrongful dismissal. All three failed. Only the last was appealed.

The wrongful dismissal complaint had attracted, in HHJ Tayler's description, very limited submissions. Neither counsel could point the tribunal to any authority on what duress does to a repudiatory breach. The tribunal recorded as much, called the question a difficult one, and answered it in four lines:

We start from the position that repudiatory breaches of employment contracts are to be determined on an objective basis, and that it is not necessary for someone to intend to commit a repudiatory breach of contract. Approaching it from that perspective, we consider that the sending of the message (and failure to report it) is, objectively speaking, a repudiatory breach of contract. The motives for that do not affect that.

Two propositions sit in that passage. The first, that repudiatory breach is judged objectively, is orthodox. The second, that motive therefore cannot touch it, does not follow from the first.

Whose objectivity?

Where does the error come from? And why does it feel so plausible that two experienced counsel could find nothing to say against it?

Because the word is doing two jobs at once. The appellant reached for a commercial authority to prise them apart: Eminence Property Developments Ltd v Heaney [2010] EWCA Civ 1168, in which a seller's solicitors, through an honest mistake about a notice to complete, treated thirteen contracts for the sale of flats as at an end a fortnight early. Etherton LJ restated the test and then qualified it in a way that decides this appeal:

Thirdly, all the circumstances must be taken into account insofar as they bear on an objective assessment of the intention of the contract breaker. This means that motive, while irrelevant if relied upon solely to show the subjective intention of the contract breaker, may be relevant if it is something or it reflects something of which the innocent party was, or a reasonable person in his or her position would have been, aware and throws light on the way the alleged repudiatory act would be viewed by such a reasonable person.

In plainer terms: the reason a party acted may be taken into account if a reasonable person in the other party's position would have been aware of it. What is shut out is the reason nobody could have known, the private operation of a party's mind, never communicated to anyone. What is let in is the reason that was, or ought to have been, apparent to the other side at the time it acted. The adjective attaches to the observer, not to the evidence: the observer is impartial, but what the observer may look at is everything on view.

That distinction decides this appeal, because the school knew. The claimant had told the disciplinary panel she was acting under coercion, and the panel accepted her account of it before deciding to dismiss. Her reason for sending the message was therefore never a private motive at all. It was a circumstance the employer was actually aware of, which is precisely the category Eminence makes admissible.

That passage crossed into employment law in Tullett Prebon plc v BGC Brokers LP [2011] EWCA Civ 131, where Maurice Kay LJ held that the objectively assessed intention of the alleged contract-breaker towards its employees was of paramount importance, and approved the trial judge's own account of what he had done: "A party can still have an intention which may be relevant, but the intention is to be judged objectively ... I had it very much in mind that I had to have my objective spectacles on."

HHJ Tayler's own route is simpler, and worth noting for a practical reason: it dispenses with the apparatus altogether. Rather than sorting conditions from warranties and both from renunciation with Chitty open on the desk, apply the classic description of gross misconduct in Neary v Dean of Westminster [1999] IRLR 288: conduct must so undermine the trust and confidence inherent in the particular contract of employment that the employer should no longer be required to retain the employee. That formulation is capacious enough to hold the nature of the contract, the term breached, the severity of the breach, and the reason the employee acted as they did.

Applied here, the question was whether the claimant's conduct, having regard to the pressure she was under and the importance of her safeguarding obligations, objectively so undermined trust and confidence that the school could no longer be required to keep her. A better question. Not an easier one.

The mirror

There is an obvious objection here: constructive dismissal law appears to say the opposite.

In Leeds Dental Team Ltd v Rose [2013] UKEAT 0016_13_2709 the employer argued that Tullett Prebon had changed the law and obliged tribunals to make a finding about the employer's intention in every constructive dismissal case. The EAT rejected it in a reserved judgment, delivered at that length precisely because the submission appeared to be new. Woods v WM Car Services (Peterborough) Ltd [1981] ICR 666 and Malik v Bank of Credit and Commerce International SA [1998] AC 20 were left undisturbed: to breach the implied term the employer need not intend any repudiation at all.

So the employee's duress comes in and the employer's intention stays out. That reads like a contradiction.

It is not, because the two rules answer different questions. What Leeds Dental Team refuses is the demand for a factual finding about a party's private, uncommunicated state of mind. What Eminence admits is the circumstances the other party actually knew about. The line does not run between employee and employer: it runs between what was hidden and what was known.

The school knew. It set the coercion out in the dismissal letter, accepted the account, and then weighed it as mitigation going to sanction rather than as a circumstance going to the character of the breach itself. That is the move the EAT has now held to be an error. It is also the move most disciplinary panels make, because the mitigation box is where the appeal template puts it.

Duress decays

The most useful paragraph in the judgment is the one that does the claimant no favours.

Pressure that explains the sending of a message at a particular moment explains a good deal less about the eighteen months of silence that followed. HHJ Tayler says so directly: the duress may be significant in analysing the message and potentially of less significance in the failure to report. He adds that it may be relevant that the claimant did not appear fully to accept her responsibilities.

Practical takeaways

In short:

1. Where an employee was under pressure, plead it in the wrongful dismissal claim as a fact about the breach. Not only in mitigation: mitigation goes to sanction, and sanction is not the contract question.
2. Cite Eminence at [63] and Neary. Between them they get the reason the employee acted in front of the tribunal.
3. The pressure must have been known to the employer, or knowable by a reasonable employer, at the time it dismissed. Private reasons nobody could have known stay out.
4. It works for respondents too. Everything the employer knew is admissible, including seniority, training, delay in reporting, and whether the employee accepts responsibility.
5. Pressure fades. It may excuse the act and do much less for a long silence afterwards, so take each allegation separately.
6. Losing unfair dismissal does not lose the notice claim. This claimant lost one and may still win the other on the same facts.

It goes back to the same tribunal, which will hear the same facts and may well arrive at the same answer. What it cannot do a second time is decline to ask the question.

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