The claimant, Mr Horkulak, had been threatened and humiliated by his manager over a period of some months. Finally, he walked out of his job as a senior managing director in a major broking house in the City of London. He saw his doctor the next day, who put him on a course of tranquillisers to relieve his extreme stress and anxiety. He also saw his solicitor, who wrote to his employer, the defendant, and accepted on his behalf as a repudiatory breach of contract his manager’s treatment of him. On the day he walked out, his manager had called him a “stupid motherfucker” over the telephone during his lunch, and two months before that had called him during his daughter’s birthday party and threatened to “fucking break him in two”.

*Full case details
Steven Horkulak vs Cantor Fitzgerald International, 31 July 2003, High Court Queen’s Bench Division, Judgment of Mr Justice Newman
The claimant brought a claim for wrongful dismissal and described the defendant’s breach of contract in terms that his manager “behaved towards [him] in a manner which was calculated and/or likely to seriously damage and/or destroy the relationship of trust and confidence” between him and the defendant. The defendant argued that Mr Horkulak’s walking out of his employment itself amounted to a repudiatory breach of his contract and that, in any event, Mr Horkulak would shortly have been liable for summary dismissal because of his misconduct and shortcomings.

Reference

The court found the defendant liable for wrongful dismissal on the basis that the claimant’s manager had adopted the language of criminal intimidators, which reflected a level of anger and intolerance for the claimant that was wholly incompatible with the continuance of a relationship based on mutual trust and confidence, and the claimant had left his employment in response to this breach.

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Postscript

The court found the defendant liable for wrongful dismissal on the basis that the claimant’s manager had adopted the language of criminal intimidators, which reflected a level of anger and intolerance for the claimant that was wholly incompatible with the continuance of a relationship based on mutual trust and confidence, and the claimant had left his employment in response to this breach. Comment The implied term of trust and confidence is viewed by the courts characterising the culture that has replaced the “master and servant” relationship that formerly characterised contracts of employment. Under the old culture, the employee got his wages, and that was his or her benefit from the contract. Nowadays, the relationship is characterised by a reciprocal duty to co-operate, and the employee’s participation in the business has to be recognised as “one of the most important things in his or her life [which] gives not only a livelihood but an occupation, an identity and a sense of self-esteem.” (Lord Hoffmann in Johnson v Unisys (2001)) The judge accepted in this case that the environment in which the claimant worked was stressful and demanding, and that the use of foul language was commonplace. But he also acknowledged that “the law has developed so as to recognise an employment contract as engaging obligations in connection with the self esteem and dignity of the employee.” He found that “the frequent use of foul and abusive language did not sanitise its effect”, and that it amounted to a breach of the implied term of trust and confidence. The judge further accepted that the claimant’s manager did have legitimate grounds for his dissatisfaction on some of the occasions he was abusive to the claimant. However, he held that to comply with the implied term of trust and confidence, he had to give the claimant the opportunity to re-establish the trust and confidence that would recreate the “faith” which the manager claimed to have lost in him as a result of his shortcomings. The judge referred in this connection to the defendant’s disciplinary procedure, which laid down as a term of the contract of employment that “in cases where the performance or conduct of an employee falls short of the standard required, the company will try to bring about an improvement by discussion and advice”, and found that the manager’s “intemperate, summary views in foul and abusive language” did not amount to the required “discussion and advice”.