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Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Baxter v Cavehill Funeral Services Limi... [2012] NIIT 00113_09IT (17 January 2012)
URL: http://www.bailii.org/nie/cases/NIIT/2012/00113_09IT.html
Cite as: [2012] NIIT 113_9IT, [2012] NIIT 00113_09IT
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THE INDUSTRIAL TRIBUNALS
CASE REF: 113/09
CLAIMANT: Glen Baxter
RESPONDENT: Cavehill Funeral Services Limited
DECISION
The majority decision of the tribunal is that the claimant was not constructively dismissed by the respondent, and his claim is therefore dismissed.
Constitution of Tribunal:
Chairman: Mr S A Crothers
Members: Ms M Mulligan
Mr E Miller
Appearances:
The claimant appeared and represented himself.
The respondent’s response had been struck-out.
Background
1. In its decision dated 26 October 2011 a tribunal decided that the response of the respondent, presented to the tribunal on 19 February 2009, should be struck-out and the respondent debarred from responding to the claimant’s claim altogether.
The Claim
2. The claimant claimed that he had been constructively dismissed by the respondent.
The Issue
3. The issue before the tribunal was whether the claimant had been constructively dismissed by the respondent.
Sources of Evidence
4. The tribunal heard evidence from the claimant and from his General Assistant, Paul Mulligan. The claimant presented no documentation to the tribunal except for a schedule of alleged loss.
Findings of Fact
5. Having considered the evidence insofar as same related to the issue before it, the tribunal made the following findings of fact, on the balance of probabilities:-
(i) The claimant was a co-founder of the respondent company (“the Company”). His fellow director at all times material to the tribunal hearing was Stephen Love. A solicitor, Sarah Burrows, and her husband Jonathan Smyth, were two shareholders in the company. The claimant held 7,500 £1 shares and had provided loans to the company amounting to £15,000.
(ii) The claimant had negotiated contracts with various Health Trusts on a tendering basis. The company had offices on the Cavehill Road, Belfast. The claimant, however, also had an office at home in which he stored sensitive information pertaining to the tenders with the Health Trusts, including computerised information.
(iii) On or about 3 or 4 January 2008, part of the claimant’s home collapsed under the weight of a snow fall. The documentation in his office was destroyed together with the information stored on the computer. The computer was subsequently recovered but he was unable to retrieve the stored information. He subsequently made an insurance claim regarding the matter.
(iv) Of major importance was the fact that accounts information had to be filed in February/March 2008 with the Company Registry for the year 2007. Failure to do so means that progressive fines are levied ranging from £100, to £200 and, ultimately to £500. The tribunal accepts the claimant’s evidence that he informed his fellow director and shareholders concerning the loss of this vital information. The claimant met with various shareholders and his fellow director at various times to discuss progress in the matter. The accounts system operated by the claimant involved a template being kept on a computer which he updated on a monthly basis and at the end of the relevant year he forwarded the necessary information to the company’s accountant who filed the accounts with the Company Registry. When the claimant resigned on 29 July 2008, the accounts for the year 2007 had still not been filed with the Company Registry. He claimed before the tribunal that this had still not been done as at the date of hearing.
(v) The claimant, who was responsible for the day to day running of the company, acknowledged that he alone was responsible for the preparation of the information required by the accountant, John Marshall, for the Company Registry. He claimed that he was so busy in the months after the roof collapsed in his house, that the reconstruction of the information for the accounts took second place. At the time of his resignation, the claimant claimed that he had obtained information from all necessary sources in order for the accountant to forward the necessary accounts to the Company Registry. However, there is no evidence before the tribunal that the claimant himself sought to send this information to the accountant before his resignation became effective on 29 July 2008. Furthermore, the Police Service of Northern Ireland became involved in an investigation within the company and a file of papers which the claimant had prepared for the tribunal was taken by the police and has not been returned to him.
(vi) The claimant did not have a written director’s contract with the company and was unable to articulate before the tribunal any terms agreed orally with the company. It was therefore impossible for the tribunal to ascertain express contractual terms with the necessary precision.
(vii) The tribunal is satisfied that the claimant, on his own evidence, did little to progress the accounts information before July 2008. At the end of June/beginning of July 2008 he became aware that Sarah Burrows proposed to transfer some of her shares to her nephew, Stephen Peeples. The claimant objected to this on the basis that he did not feel that Mr Peeples was of good character and claimed that the subsequent events leading to his resignation stemmed from his objection to Mr Peeples becoming a shareholder. He also claimed that his fellow director, Stephen Love, was a friend of Mr Peeples and that he (Stephen Love) did not want Stephen Peeples to become part of the business.
(viii) In or about the beginning of July 2008, and following correspondence from Cleaver Fulton and Rankin solicitors signed by Sarah Burrows, the claimant’s access to the company’s current account was stopped together with his use of the company credit card facility. The claimant sought access to the correspondence from Sarah Burrows which had led to both facilities being stopped, but was unable to do so.
(ix) The claimant attended a wedding on 4 July 2008 and, in his absence, Sarah Burrows, accompanied by Stephen Love’s brother, Barry Love, (who was not a shareholder), carried out a full search of the claimant’s office at Cavehill Road and attempted to access his computer. However, it was password protected and therefore not accessible. They also checked the safe in the claimant’s office which was empty. The claimant explained that his office was an open office accessible to other members of staff and this is why he kept important and sensitive information in his office at home.
(x) Upon returning to work on Monday 7 July 2008, the claimant was approached by Emma Scott, General Administrator, who appeared somewhat nervous. She told the claimant that she had received a telephone call from Sarah Burrows and had been requested to keep an eye on money going in and out of the company and observe what the claimant was doing on a daily basis.
(xi) The claimant subsequently went on holiday to the Irish Republic during the 12 July week and was scheduled to return to work on 21 July. However he returned on 19 July owing to the fact that he had to organise a funeral which was to take place in Dublin. The claimant was unsure as to whether the funeral took place on Wednesday 23 or Thursday 24 July 2008. However, having left Belfast in a hearse to go to Dublin, he received a text message from Jonathan Smyth, Sarah Burrows’ husband, informing him that a meeting would take place at his house that night. Jonathan Smyth informed the claimant that he must attend. The claimant explained by text message that he was going to Dublin and would be away for most of the day. The meeting was to take place at approximately 6.30 pm – 7.00 pm. After a further exchange of texts, the meeting was moved to 9.00 pm and the claimant duly attended. Present at the meeting were Sarah Burrows, Jonathan Smyth, Stephen Love, and the claimant. The claimant described the meeting as a “very fierce meeting”. It is evident to the tribunal that the claimant faced a number of allegations relating to the accounts and as to what he had done or not done. It is also clear to the tribunal that Sarah Burrows, Jonathan Smyth, and Stephen Love were very anxious regarding the accounts to the extent that they requested the claimant to present the necessary accounts information by lunchtime on the following day.
(xii) The claimant felt that this request was unreasonable and a further meeting was called at the accountant’s office for Friday night, 25 July 2008. The claimant asked Sarah Burrows why such a meeting at short notice was necessary. He was told that he had to be there. The tribunal finds it unusual that the claimant enquired as to why such a meeting at short notice was necessary when he was well aware of the level of anxiety existing in the company in relation to the 2007 accounts. The meeting was attended by Barry Love, Stephen Peeples, Stephen Love, Jonathan Smyth, Sarah Burrows, John Marshall, a Mr Reynolds (whom the claimant did not know), and the claimant. The claimant described this meeting as a very intense meeting where he was bombarded with questions regarding the accounts. He told the meeting that he was compiling the accounts information. He explained that this was a slow process and that he was working on it. John Marshall informed him that he was going to have him removed as a director. The claimant then sought advice from Sarah Burrows regarding whether this was possible. She did not offer him advice but did inform him that she was going to make Stephen Peeples a shareholder by transferring some of her shares to him. The claimant engaged in an exchange with Sarah Burrows and requested her to give legal advice again in respect of the proposed transfer of shares to a member of a family without others being given consideration. The claimant claimed that she informed him that Stephen Peeples was unemployed, that she was going to gift shares to him, and would send him to sit in the office every day and watch the claimant. At this stage the claimant offered to buy out all of the shareholders provided they allowed him time to raise the necessary funds. He proposed to Sarah Burrows that he would pay her off for her shareholding over a period of 12 months. His buy out idea was however dismissed.
(xiii) The claimant considered his position over the weekend. He claimed that he resigned owing to his access to the company’s credit card and banking facilities being stopped, his office having been searched, and the various meetings. He claimed that he was left in a position where it was no longer tenable for him to continue to serve the company. He had asked at the meeting on 23 or 24 July for some four to six weeks to collate all of the necessary information for the 2007 accounts. When he resigned on 29 July 2008, he had the necessary bank account details together with statements from bodies such as British Telecom, Northern Ireland Electricity and various suppliers leading him to form the opinion that he had all the documentation required to construct a set of accounts for 2007. He also claimed that his mental health would not allow him to stay in the company. He had not slept during the weekend preceding his resignation on Tuesday 29 July 2008. His resignation letter was delivered to Stephen Love, Sarah Burrows and Jonathan Smyth by Mr Mulligan. The claimant printed off a copy and placed it in the file which was taken by the police.
(xiv) The tribunal is satisfied that the claimant had decided to resign over the weekend preceding the delivery of his letter of resignation on Tuesday 29 July 2008. On Monday 28 July 2008, the staff were scheduled to be paid their wages. However Paul Mulligan was contacted by Sarah Burrows and told not to approach the claimant about the payment of wages and that Stephen Love was to sign the wages cheques. At this stage there was considerable concern among the staff regarding job security and, prior to 28 July 2008, questions have been raised about the claimant’s position within the company, including whether he had been dismissed. After the claimant resigned, questions were raised regarding his character and various accusations were made against him. The tribunal accepts that on 28 July 2008, the claimant was no longer in charge of the running of the company. He claimed that it had taken him in excess of three years to recover from the experience.
(xv) The claimant commenced a new business on 1 June 2011, having claimed Income Support following his resignation up to that date. The claimant was requested by the tribunal to furnish documentary evidence relating to Income Support and, despite subsequent directions, failed to do so. Furthermore, the claimant did not provide any medical evidence regarding his alleged health condition immediately preceding and subsequent to his resignation. Apart from the Police investigation, the tribunal was given to understand by the claimant that he was involved in civil proceedings against the company for the recovery of loan monies.
The Law
6. (i) Article 127 of the Employment Rights (Northern Ireland) Order 1996 (“the Order”) states as follows:-
“127. – (1) for the purposes of this Part an employee is dismissed by his employer if … - (c) the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer’s conduct”.
(ii) Article 156(2) of the Order states as follows:-
“Where the tribunal considers that any conduct of the complainant before the dismissal (or, where the dismissal was with notice, before the notice was given) 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 amount accordingly”.
(iii) The Order further states at Article 157(6) as follows:-
“Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding”.
(iv) Harvey on Industrial Relations and Employment Law (“Harvey”) states at Division D1 at 403 as follows:-
“In order for the employee to be able to claim constructive dismissal, four conditions must be met:
(1) There must be a breach of contract by the employer. This may be either an actual breach or an anticipatory breach.
(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 his leaving. Possibly a genuine, albeit erroneous, interpretation of the contract by the employer will not be capable of constituting a repudiation in law.
(3) He must leave in response to the breach and not for some other, unconnected reason.
(4) He 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”.
(v) The tribunal considered, insofar as relevant, the remainder of the section dealing with constructive dismissal in Harvey. It includes the following commentary in relation to the case of RDF Media Group plc v Clements (2007) EWHC2892(QB), [“2008”] IRLR 207, at 438.03, relating to the duty of trust and confidence as an implied term:-
“[438.03] There is, however, another aspect of the decision in RDF (above; itself a common law claim, not directly one on constructive dismissal) which is proving to be more controversial. It was suggested in the judgment that if the employee himself was already in breach of trust and confidence, then the right to claim that the employer was subsequently in breach of that same term is lost (and so a constructive dismissal claim on that basis should fail). The idea seems to be that trust and confidence has gone and so cannot have been later destroyed by the employer's acts. The problem with this (apart from it being too obvious a possible get-out-of-jail-free card for the employer if it can drag up some skeleton from the employee's recent past) is that it would allow the employer to defend a constructive dismissal claim (on its own terms possibly unanswerable) by reliance on an alleged breach of the term by the employee in relation to something completely different; in other words, trust and confidence is treated as monolithic, either there 100% or not there at all. RDF was dissented from on this point at first instance (on much these grounds) in SG&R Valuation Service Ltd v Boudrais [2008] IRLR 775, QBD, Tullett Prebon v BGC Brokers [2010] EWHC 484 (QB) (upheld on other grounds: [2011] IRLR 420, CA) and Brandeaux Advisers (UK) v Chadwick [2011] IRLR 224 (QB). However, these were again common law actions and much uncertainty was caused by the decision of the Scottish EAT in Aberdeen CC v McNeill [2010] IRLR 374 in a case directly on constructive dismissal that as a matter of both contract law and also under RDF this 'mutual breach' point is good law. On the facts of the case it meant that a claim of such dismissal by an employee who left during disciplinary proceedings which he felt were being used oppressively lost his claim because the employer successfully argued that his prior conduct in harassing others (on which the proceedings themselves were based) had already destroyed trust and confidence in him by the employer. The point now needs authoritative resolution at Court of Appeal level.”
Harvey continues:-
“(b) The duty of co-operation
[461] More recently the EAT has specifically followed the Post Office case on this point (Woods v WM Car Services (Peterborough) Ltd 1981] IRLR 347, [1981] ICR 666). The Tribunal emphasised the significance of this duty for employers not to conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of mutual confidence and trust. As it pointed out, it enables an employee who is ‘squeezed out’ of the company by the wholly unreasonable conduct of the employer to leave and claim that he has been dismissed even though he cannot point to any specific major breach of contract by the employer.
[462] This duty not to undermine the trust and confidence in the employment relationship can be subsumed under a wider contractual duty which is imposed on the employer, to co-operate with the employee.”
(vi) Once a tribunal has established that a relevant contractual term exists and that a breach has occurred, it must then consider whether the breach is fundamental. Where an employer breaches the implied term of trust and confidence, the breach is inevitably fundamental (Morrow v Safeway Stores plc 2002 IRLR 9, EAT). A key factor to be taken into account in assessing whether the breach is fundamental is the effect that the breach has on the employee concerned.
(vii) It is also possible for a tribunal to make a finding of contributory conduct in a constructive dismissal case in the event of there being a connection between the employee’s conduct and the fundamental breach by the employer. As was pointed out in the Northern Ireland Court of Appeal case of Morrison v Amalgamated Transport and General Workers Union (1989) IRLR 361 NICA, since it was open to a tribunal to declare a constructive dismissal fair, there could be no inconsistency in its holding that the employee contributed to the dismissal in the first place.
(viii) All that is required is that the action of the employee to some extent contributed to the dismissal. Once a tribunal has found on the evidence that an employee has to some extent caused or contributed to his or her dismissal it shall reduce the compensatory award.
(vix) Contractual terms may be either express or implied. Express terms are terms which have been specifically agreed between the parties whether in writing or under an oral agreement. The grounds in which a term may be implied into a contract are very limited. A term can only be implied if:
(1) It is necessary to give the contract “business efficacy”, or
(2) It represents the custom and practice in that employment and is “reasonable, certain and notorious” (Devonald v Rosser and Sons 1906 2 KB 728, CA), or
(3) It is an inherent legal duty central to the relationship between employer and employee, such as the duty not to undermine trust and confidence.
(4) A term may also be implied from the conduct of the parties or because it is so obvious that the parties are assumed to have intended it.
Submissions
7. The claimant did not make any submissions.
Conclusions
8. The tribunal carefully considered and weighed the claimant’s unchallenged evidence in arriving at its findings of fact. It also carefully considered the law relating to constructive dismissal and the conditions which must be met in order for the claimant to be able to claim constructive dismissal. Having applied the relevant principles of law to the findings of fact, the tribunal concludes as follows:-
(i) The claimant’s own conduct pertaining to the considerable delay in collating and providing the necessary information to the respondent’s accountant, John Marshall, in order for the 2007 accounts to be presented to the Company Registry, (and specifically his further failure to do so on 29 July 2008 given the level of anxiety generated by such failure within the company), leads the tribunal, by a majority, to the conclusion that the company’s conduct preceding the claimant’s resignation did not, on the evidence, amount to a fundamental breach of contract entitling the claimant to resign and claim constructive dismissal. This is consistent with Mr Justice Jacks judgment in the case of Tullett Prebon plc and Others v BGC Brokers LP and Others ORS (2010) EWHC 484 QBD. In relation to the issue of mutual trust and confidence, although Mr Justice Jack made it clear that damage to the one party’s trust and confidence in the other does not entitle that party to damage the other’s trust and confidence in him or her, he did conclude that the employee’s conduct may be relevant to the question of whether the employer’s conduct had sufficiently damaged the trust and confidence to amount to a breach of contract.
(ii) The minority member of the tribunal concluded that the respondent had breached the implied term of trust and confidence and that the claimant had established a case for constructive dismissal. However, the minority member also concluded, on the facts, that any award to the claimant should be reduced by 50% to reflect the claimant’s contributory conduct in his failure to provide the company accountant with the necessary information in order for a return to be made to the company registry. Furthermore, the minority member concluded that the respondent’s conduct and failure to follow a fair procedure in removing the authority which the claimant had within the company breached the Labour Relations Agency’s Disciplinary Code of Practice and that any shortcomings in the claimant’s performance did not give the company the right to ignore good industrial relations practice.
(iii) The claimant’s claim of constructive dismissal is therefore dismissed by a majority decision.
Chairman:
Date and place of hearing: 11 November 2011, Belfast.
Date decision recorded in register and issued to parties: