Court of Appeal Dismisses Appeal in Wrongful Dismissal Case and Upholds “Least Burdensome” Principle


The Court of Appeal has dismissed an appeal brought by the former CEO and Executive Chairman of the AA against the decision of the High Court to strike out part of his claim for wrongful dismissal and a claim for damages in respect of lost shares.  The Appellant, Bob Mackenzie, was dismissed on 1 August 2017 after he had assaulted a subordinate employee in a hotel bar.  The AA successfully applied to strike out parts of his claim in 2021.  The Court of Appeal has now dismissed Mr Mackenzie’s appeal.  The appeal turned on the nature and scope of the “least burdensome principle” i.e. the rule that in determining damages for breach of contract, the contract-breaker is taken to have lawfully performed the contract in the manner least burdensome to it.  In this case, the AA relied on the presence in the contract of a pay in lieu of notice clause whereby it was at liberty to dismiss Mr Mackenzie without notice upon payment of 12 months’ salary.  Mr Mackenzie’s argument that this rule should no longer be followed, and that damages should be calculated on the basis of what would have happened had he not been dismissed, was rejected.

The AA was represented by James Laddie QC, instructed by Patrick Brodie of RPC.

The judgment can be found here.