Industrial Tribunals Northern Ireland Decisions

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Cite as: [2004] NIIT 3165_1, [2004] NIIT 3165_01

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THE INDUSTRIAL TRIBUNALS

CASE REF: 3165/01

APPLICANT: Marilyn Elizabeth Bricknell

RESPONDENT: J T Green & Sons Limited

DECISION

The unanimous decision of the tribunal is as follows:-

1. The applicant's complaints of sex discrimination are not well founded and those complaints accordingly are dismissed.

2. The applicant's complaint of unfair dismissal is well founded and it is ordered that the respondent shall pay to the applicant the sum of £3,079.45.

Appearances:

The applicant was represented by Mr P Prenter, Solicitor, of Campbell & Caher, Solicitors.

The respondent was represented by Mr U Crothers, Solicitor, of Brangam Bagnall Solicitors.

REASONS

These reasons are given in extended form.

Introductory

The respondent company runs a supermarket in Lisburn. The applicant had worked in that supermarket for fifteen years – always in the bakery department – until 7 September 2001, when she resigned (with immediate effect).

The Complaints

In these proceedings, the applicant complains of unfair dismissal. (She claims that she has been constructively dismissed). The respondent denies that she has been constructively dismissed. The respondent says that she resigned. The applicant says that this was a constructive dismissal, because of the following allegations. According to the applicant, she was compulsorily transferred, without any consultation. This decision to compulsorily transfer her was humiliating, and was likely to diminish her reputation in the eyes of others. Furthermore, the respondent's Assistant General Manager, Mr Leslie McCluskey, at a meeting on 31 July 2001, made statements to the applicant which, according to the applicant, indicated that (at best) she was grossly incompetent or (at worst) she was dishonest.

The applicant also complains of two acts of sex discrimination against her. Firstly, the applicant asserts that the respondent discriminated against her by compulsorily transferring her. Secondly, the applicant asserts that, by failing to offer her the potential for a pay rise in the event of her increasing the turnover of the bakery section, the respondent carried out an act of unlawful sex discrimination.

The evidence

We heard evidence from the following:-

(1) On behalf of the applicant:

(a) The applicant herself;

(b) Mrs Patricia Young, (a former colleague of the applicant, at the respondent's supermarket); and

(c) Mr Paul Bricknell, the applicant's husband.

(2) On behalf of the respondent:

(a) Mr McCluskey (who is now the General Manager of the respondent company); and

(b) Mrs Lisa Gordon, an Assistant Supervisor in the supermarket.

We told the parties that we would pay regard only to documents to which our attention was specifically drawn. The tribunal saw the following documents:-

(1) The applicant's bundle, consisting of seventy three pages.

(2) The applicant's letter of resignation.

(3) Various miscellaneous pay slips.

Our findings of fact

From the evidence we saw and heard, the tribunal makes the findings of fact which are set out in the following paragraphs.

The applicant was employed by the respondent in their supermarket at Lisburn. This is a large supermarket, which employs many workers. The great majority of those workers are women. The applicant was employed by the respondent as a sales assistant. She had been located in the bakery department throughout her period of employment with the respondent. Until about three years prior to the termination of the applicant's employment, the bakery department had had a departmental manager, called Elizabeth Hewitt. When the applicant first became an employee of the respondent, Ms Hewitt told her that she would be permanently based in the bakery department. However, the respondent was contractually entitled to locate her anywhere in the supermarket.

When Ms Hewitt retired, she was informed on behalf of the respondent that Ms Hewitt would not be replaced. Accordingly, thereafter, the applicant, in effect, managed the bakery department. However, she did so on the basis that her job title continued to be that of sales assistant, and she did not receive any increase in remuneration on account of her management role.

No disciplinary action was ever taken against the applicant at any time during her period of employment with the respondent.

The organisational hierarchy of the respondent had a General Manager at the apex, assisted by an Assistant General Manager; with Supervisors as the next tier; Deputy Managers (Heads of Department) at the next lowest tier; ordinary staff (Sales Assistants, Storemen, Car Park Attendants and Butchers) were at the base of the staffing organisational pyramid.

The senior management of the respondent were broadly content with the applicant's discharge of her responsibilities until Spring 2001. At that time, Mr Leslie McCluskey became concerned about the fact that there was a low weekly turnover in the bakery department. He also had some other concerns regarding the manner in which the work was being carried out in the bakery department.

When Mr McCluskey met with the applicant at the beginning of May 2001, for the purposes of discussing his concerns, he was accompanied by Mrs Lisa Gordon, one of the Supervisors. The meeting was not minuted. No document was ever sent to the applicant in relation to the meeting. At the outset of the meeting, Mr McCluskey told the applicant that the meeting was being held because he felt that the bakery department was under-performing; he thought there was a possibility of more sales; and he wanted to explore ways of achieving the objective of increasing sales. In the course of that meeting, he expressed concerns about four matters. Firstly, he said that he had received complaints – the number of complaints and the number of customers who complained were never specified in the evidence which we received – about there being no bread available on occasions. Secondly, he said that the ovens sometimes were not clean. Thirdly, he asked the applicant to attend to the covers for racking. Fourthly, he asked her to explore the possibility of expanding the range of bakery products, with a view to increasing sales. The applicant agreed to address all those issues. Mr McCluskey promised to help her in relation to the fourth issue.

During the period after the May meeting, Mr McCluskey monitored the situation. He came to the conclusion that there was no improvement in relation to the four issues which he had identified at the May meeting. The turnover had not increased. On occasions the ovens were not being cleaned. No new products had been provided. He was still getting complaints about the occasional unavailability of bread.

Accordingly, he decided to move the applicant from her work location in the bakery. He met with her on 31 July. He told her that, since the date of the May meeting, the bakery sales had not improved. He also told her that when she was off work, the turnover went up and when she came back the turnover went down. He told her that he had made up his mind to move her and that she was being replaced by a male employee from the provisions department, David Dowds. He suggested that the applicant should move to the provisions department. The applicant did not want to move there. He told her that she should think about where she would like to move and come back and discuss this with him.

The applicant was very upset. There had been no consultation with her about the move. There had been no suggestion, at the May meeting, that she would be moved if matters did not improve. In any event, the applicant did not feel that she was at fault. She was aware of the fact that she did not work during the afternoons on Tuesday, Thursday, Friday or Saturday (and therefore reasoned that she was not necessarily personally responsible for all failures to clean ovens, or to obey the guidance in relation to covers for racking, or in relation to every instance of non-availability of bread). She thought she had done a good job, without increased remuneration, for many years. She was very upset about the compulsory transfer. She regarded it as a measure which was humiliating, especially as she would be seen to have been stripped of her managerial responsibilities. She was also very upset about the remark which Mr McCluskey had made in relation to the fluctuations in turnover. He had told her that, when she was off, turnover went up by approximately £300 per week and the minute she came back, the turnover went down. She thought that, at worst, he was accusing her of stealing, at best he was accusing her of being grossly incompetent.

She went back to work for the rest of the day, on 31 July. However, she never returned to work thereafter. Instead, she went to her GP, Doctor Bertha Cowan, who diagnosed her as suffering from anxiety, gave her some tranquillisers, and advised her to refrain from work. She was still on sick leave when she resigned, in a letter which was dated 8 September 2001. In that letter, the applicant made the following comments:-

"I hereby terminate my employment with you. I have felt deeply humiliated and outraged by your arbitrary decision to terminate my position running the bakery department in favour of a male employee who has hitherto no experience in that department. As you know after the previous manager's position became vacant I was informed that no replacement would be appointed but I carried out that manager's duties effectively, efficiently and loyally in the intervening period until you chose to remove me without justification and then elevate this male to a manager's position in respect of which he enjoys a higher level of remuneration than me. I have been so devastated by the unfair treatment and what I consider to be gross discrimination as a result of my gender that I feel your conduct prevents me from considering returning to any form of employment with you, hence my resignation".

In a letter dated 10 September, Mr McCluskey referred to what he described as the applicant's "letter of resignation received on 8 September 2001" and noted, that in that letter, she had raised a number of issues. In his letter of 10 September, he invited her to a meeting on 17 September, to enable her to discuss those issues. Her solicitors responded on her behalf, asserting that she had been obliged to resign from her position as a result of "your conduct towards her" and that she had also suffered by reason of her gender. The solicitors' letter declined the invitation to a meeting. In his letter of 19 September, to the applicant's solicitors, Mr McCluskey pointed out that he had "… offered to meet [with the applicant] to discuss the reasons for her resignation and to put right a number of misunderstandings apparent in her letter".

Mr David Dowds did have previous experience in the management of a bakery department, although he does not seem to have been employed as a manager in any such department. For a period of three months he was employed by the respondent at the same rate as the applicant had previously been employed. During that period, the turnover of the bakery department increased very substantially. In recognition of that fact, the respondent increased Mr Dowds' hourly rate, so that it was well in excess of the normal hourly rate for a sales assistant, with effect from a date in December 2001. He was appointed as manager of the bakery department in September 2002. By the time Mr McCluskey spoke to the applicant on 31 July, he had already made up his mind that Mr Dowd should replace the applicant. From the very beginning of his period of employment in the bakery department, Mr Dowds carried out the same role as the applicant had carried out before him. However, the applicant's hourly rate had never been enhanced to reflect any contribution which she, in her capacity as employee, had made.

The substantial augmentation of Mr Dowds' hourly rate, in respect of the period from December 2001 until August/September 2002, was unique, both in the firm generally, and in the history of the firm. However, as a result of certain performance appraisals, a number of other employees in the firm, at the time of the termination of the applicant's employment, were also receiving hourly rates of pay in excess of the normal rate of pay for sales assistants, even though they were sales assistants. There were ten staff who fell into that category. The applicant was not one of them. Mr Dowds was not one of them. Only one of them was a man, a Mr B. Henry.

The submissions

The submissions made on behalf of the applicant can be summarised as follows. On behalf of the applicant, no actual statutory comparator was put forward, in respect of the sex discrimination complaints. Instead, it was suggested on behalf of the applicant that the manner in which Mr Dowds was treated was indicative of the manner in which a hypothetical comparator, in the same circumstances as the applicant, would have been treated. According to Mr Prenter, a man, in the same situation as the applicant, would not have been compulsorily transferred. Furthermore, a man in the same situation as the applicant would have been offered a higher salary. The fact that the applicant was compulsorily transferred, together with the remark which had been made regarding the fluctuations in turnover, constituted a fundamental breach of contract, which destroyed the trust and confidence which should exist between employer and employee. In any event, the respondent had no contractual right to transfer the applicant compulsorily.

The arguments for the respondent can be summarised as follows. Mr Dowds was not an appropriate comparator. His circumstances were very different from those of the applicant. He had a history of success behind him, whereas, in July 2001, the applicant had a history of low turnover behind her. He had got the pay increase because of his good performance, not because he was a man. She was being compulsorily transferred because of her poor performance, not because she was a woman. On the constructive dismissal issue, Mr Crothers referred us to the commentary in Harvey on Industrial Relations and Employment Law especially at paragraph DI 434. He suggested that, on the available evidence, the tribunal should be satisfied that Mr McCluskey had not engaged in any unreasonable conduct. Even if he had done so, there was no evidence that he had done so with a view to destroying the relationship of trust and confidence between an employer and an employee. Furthermore, or in the alternative, what had been done did not constitute a fundamental breach of trust and confidence. In any event, even if there was a constructive dismissal, the tribunal could not make a finding of unfair dismissal without considering whether the constructive dismissal was fair and reasonable in all the circumstances.

The law and our conclusions (sex discrimination)

Paragraph 3 of the Sex Discrimination (Northern Ireland) Order 1976 ("the Order") at paragraph (1), provides that a person discriminates against a woman in any relevant circumstances if:-

"(a) on the ground of her sex he treats her less favourably than he treats or would treat a man …".

Article 7 of the Order provides that a comparison of the cases of persons of different sex under Article 3(1) must be such that "the relevant circumstances in the one case are the same, or not materially different, in the other".

We are satisfied that Mr McCluskey decided to transfer the applicant only because he believed she was performing poorly in her bakery department role. We are satisfied that the applicant's gender was not a factor in connection with the decision to compulsorily transfer her. We are satisfied that, a man, in the same or similar circumstances, would have been treated in exactly the same way as the applicant was treated. For those reasons, the complaint of sex discrimination in respect of the compulsory transfer must be dismissed.

We are satisfied that Mr Dowds received the hourly rate increase in December 2001 only because of the fact that the bakery turnover had greatly increased during the period when he had been in charge. We are satisfied that a woman, in the same circumstances as Mr Dowds would have been treated in exactly the same way. Accordingly, the complaint of sex discrimination, in relation to the omission to offer the applicant performance related pay incentives, must also be dismissed. The tribunal disapproved of the lack of transparency in relation to the pay increase which Mr Dowds received in December 2001. However, no equal pay claim has been made in this case, (and, in any event, Mr Dowds received his increase after the applicant's employment had already ended).

The unfair dismissal liability issues: The law and our conclusions

In the context of this case, three main issues are relevant to the unfair dismissal complaint:

(1) Was the applicant constructively dismissed?

(2) If so, has the respondent shown the reason (or, if more than one, the principal reason) for the dismissal and that the reason shown is a potentially fair reason?

(3) If so, was the dismissal actually fair or unfair?

Article 127(1)(c) of the Employment Rights (Northern Ireland) Order 1996 ("the 1996 Order") provides that, for the purposes of the unfair dismissal legislation, an employee is to be treated as dismissed by his employer if the employee terminates this contract "… in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct". (In other words, an employee is to be treated as having been dismissed by the employer if he has been constructively dismissed).

As Mr Crothers pointed out, four conditions have to be met in order for an employee to be able to successfully claim constructive dismissal:-

(1) There must be a breach of contract by the employer.

(2) That breach must be sufficiently important to justify the employee resigning (or else it must be the last in a series of incidents which justify the resignation).

(3) The employee must leave in response to the breach and not for some other, unconnected reason.

(4) The employee must not delay too long in terminating the contract in response to the employer's breach, otherwise he may be deemed to have waived the breach and agreed to vary the contract.

We can deal with the third and fourth of those conditions in short order. We are satisfied that the third condition is met, because we are satisfied that the applicant did resign in response to what she was told during the meeting on 31 July. Furthermore, we are satisfied that the fourth condition is met. We are satisfied that the employee did not waive any breach, or agree to vary the contract; she left relatively speedily after the 31 July meeting, due allowance being made for the intervening period of illness.

Accordingly, the key issues, in the context of the complaint of unfair dismissal, are the first and second of the issues mentioned at paragraph 29 above.

First, did the employer, through Mr McCluskey, breach the contract of employment, by announcing – without any prior consultation or adequate investigation of the situation – that the applicant was to be compulsorily transferred, and by making the remark in relation to the fluctuations in turnover?

If those matters did involve a breach of contract, it can only have been a breach of the implied "trust and confidence" obligation. Such an obligation exists in every employment contract, whereby the employer is obliged not to engage, without reasonable or proper cause, in conduct likely to undermine the trust and confidence required if the employment relationship is to continue. (See paragraph 13 of the judgment of Lord Nicholls in Malik –v- Bank of Credit and Commerce International SA [1997] IRLR 462).

As Lord Steyn made clear in his speech in Malik, a breach of the implied trust and confidence obligation can occur even if the relevant conduct has not been carried out with a view to undermining trust and confidence. It is sufficient if the conduct, when viewed objectively, is likely to seriously damage the relationship between employer and employee. (See Malik at 469, 60).

In our view, there was a breach of the relevant implied term of the contract, in the light of all the circumstances of this case. This was an employee who had, for several years, carried out managerial responsibilities in respect of the baking department, without incident. She was transferred, without any prior adequate investigation, and without having had an opportunity to make representations before the decision to transfer her had been made. Furthermore, it is appropriate to consider the effect of the decision to compulsorily transfer her within the overall context, which includes the making of the remark – regarding fluctuations in turnover – which, understandably, offended and upset the applicant.

As noted at paragraph 29 above, we also have to consider whether the relevant breach of contract was sufficiently important to justify the employee resigning. In our view, the decision to compulsorily transfer the applicant, coupled with the making of the relevant remark, did constitute a breach of contract which was sufficiently important to justify the employee resigning. This was not a trivial breach of contract. Instead, it was a sufficiently serious breach to constitute repudiation on the part of the employer. Although Mr McCluskey did not mean to humiliate the applicant, that was the effect of the decision to compulsorily transfer, coupled with the making of the remark regarding the turnover fluctuations.

Accordingly, we are satisfied that the applicant was constructively dismissed. The next question is whether – as Mr Crothers asserted in the course of his submissions – the employer has shown the reason, or principal reason, for the dismissal, and has also shown that this was a potentially fair reason (being one of the types of reasons listed at Article 130(1) of the 1996 Order). In our view, the employer has not shown the reason for dismissal. Instead, the whole thrust of the evidence presented on behalf of the respondent was to the effect that there had been no dismissal and that the applicant had simply resigned.

However, we wish to make it clear that, if we are wrong on the question of whether the employer has shown a potentially fair reason for dismissal, we, in any event, are satisfied that this dismissal was unfair. It was unfair because there was no consultation prior to the decision to effect a transfer; because there was no adequate investigation of the reasons for the fluctuations in turnover prior to the decision in relation to the transfer; and because of the fact that a damaging and insensitive remark was made which had the effect of severely humiliating the applicant.

Compensation

We award the sum of £3,079.45 to the applicant. This is made up of a basic award of £2,879.45, and the sum of £200 for loss of statutory rights.

The parties agreed that £2,879.45 was the appropriate amount of basic award, subject to any reductions.

Article 156(2) of the 1996 Order provides that, where the tribunal considers that any conduct of the complainant before the dismissal was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the tribunal shall reduce or further reduce that award accordingly. We have carefully considered whether or not we should reduce the amount of the basic award, in the light of Article 156(2). However, we have decided not to do so. Firstly, on the available evidence, we are not satisfied that the applicant was culpable in respect of the disappointing levels of turnover which has been achieved during the months prior to the termination of her employment. Secondly, although it would have been better if the applicant had discussed the situation with the employer prior to submitting her letter of resignation, any such discussion is unlikely to have achieved very much, for two reasons. Firstly, as Mr McCluskey made clear in his evidence to the tribunal, he had made an irrevocable decision to transfer the applicant. Secondly, the applicant was ill with anxiety during the period leading up to her resignation.

The parties agreed that no question of loss of income arose in respect of any period after the date of dismissal, other than a period of a year when the applicant was making herself available for employment, on an intermittent basis, by an employment agency. However, we are satisfied that the applicant did not sustain any loss during the relevant period. This is because of the fact that, during that period, the applicant was being paid an hourly rate by that agency which was greater than the hourly rate which she was receiving at the time of the termination of her employment with the respondent; furthermore, it is clear that the applicant's hours of work with the agency were artificially restricted because of her domestic circumstances (and not because of any lack of availability of work).

Interest on industrial tribunal awards

This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.

Chairman:

Date and place of hearing: 16 and 17 September 2004, Belfast.

Date decision recorded in register and issued to parties: