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Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> McLarnin v Abbey Insurance Brokers Ltd [2016] NIIT 01168_15IT (06 January 2016)
URL: http://www.bailii.org/nie/cases/NIIT/2016/01168_15IT.html
Cite as: [2016] NIIT 1168_15IT, [2016] NIIT 01168_15IT
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THE INDUSTRIAL TRIBUNALS
CASE REF: 1168/15
CLAIMANT: Anne McLarnin
RESPONDENT: Abbey Insurance Brokers Ltd
DECISION
The unanimous decision of the tribunal is that the claimant was unfairly constructively dismissed from her employment with the respondent. We order the respondent to pay to the claimant the sum of £45,942.29 in respect of compensation for unfair dismissal.
Constitution of Tribunal:
Employment Judge: Employment Judge McCaffrey
Members: Mrs T Madden
Mrs E Torrans
Appearances:
The claimant was represented by Mr T Warnock, Barrister-at-Law instructed by Miller McCall Wylie Solicitors.
The respondent was represented by Mr P Moore of MCL Associates Ltd.
ISSUES
1. The claimant alleged that she had been unfairly constructively dismissed from her employment as manager of the respondent’s Newforge branch. The main issues outlined by the claimant’s representative in opening the case as alleged breaches of contract were as follows:-
(1) The respondent’s attempt to transfer and demote the claimant by moving her to a post as Senior Sales Technician in the Lisburn branch.
(2) The respondent’s decision to suspend the claimant and to move to a disciplinary hearing in relation to her refusal to accept the move to the Lisburn branch.
(3) Pressure applied to the claimant to accept the demotion and move to the Lisburn branch by a threat of termination of employment.
(4) The conduct of the claimant’s grievance hearing and its outcome.
2. Mr Warnock suggested that each of these matters was a fundamental breach of an implied term of the contract of employment, which individually and cumulatively led to a breakdown of trust and confidence between the respondent and the claimant.
3. It was the respondent’s case that there had been no breach of contract. The respondent’s representative Mr Moore contended that the respondent was entitled to move the claimant to any location it wished in reliance on a mobility clause in the contract and that the claimant was not entitled to refuse to go and work for the respondent wherever directed. It was their contention that failing to accept a move at the respondent’s instruction was effectively failure to comply with a reasonable work instruction and was misconduct.
BACKGROUND
4. At various points during this case, the respondent attempted to introduce information relating to the background to the respondent’s efforts to move the claimant from her post as manager at the Newforge branch. It was alleged that the respondent had lost confidence in the claimant as manager and this was the reason for moving her. Joann Davidson (who was the respondent’s Group HR Director) indicated in her witness statement that
“the decision to remove the claimant from its Newforge branch was taken as we had lost confidence in her to manage the branch in line with Abbey management instructions and concerns but the branch staff felt separated from the main branch network and unsure of the reporting structure. They also wrongly believed, because of the outside influence, that the branch’s future was in doubt and it was to close and were necessarily concerned for their jobs.”
5. However no exact detail of this was pleaded in the response form and none of it had been raised with the claimant at the time when the proposed move was discussed with her in March and April 2015. As such we considered it quite inappropriate to introduce new evidence at the hearing as it was not pleaded and not set out in any detail in the witness statements.
FACTS
6. We heard evidence from the claimant, from Ms Alison McKinley, Ms Joann Davidson and Ms Sarah Toms of the respondent organisation and from Mr Patrick Moore who was retained by the respondent to hear the claimant’s grievance and who also represented the respondent at this hearing. We received witness statements from all of the witnesses, heard evidence from them and a considerable number of documents were opened to us in the course of the hearing. On the basis of the evidence received we make the following findings of relevant facts.
7. The claimant had worked for the respondent since August 1999 and for approximately 12 years she had worked at the Newforge branch in Belfast. Her initial role there had been as a Sales Technician but in September 2014 she was appointed as Manager on an agreed salary of £34,000.00 per annum basic plus £1,500.00 per annum shift allowance and a bonus of up to £1,200.00 per month. The claimant’s evidence (which was not disputed) was that her bonus was usually between £1,000.00 and £1,200.00 (gross).
8. Newforge was the respondent’s second largest branch in Northern Ireland and the office was based at Newforge Country Club. The claimant was in regular contact with Mr George Storey the chairman and founder of the company and with Ms Jeni McKelvey who had overall responsibility for sales within the branches. The claimant was aware that because of changes in underwriting procedures, sales within the branch had been affected. The claimant was concerned about this, but had been reassured by Ms McKelvey and by Mr Storey to continue with as much business as possible. In December 2014 the claimant received an email from Jeni McKelvey thanking the claimant for her hard work in November and the sales achieved. It was noted that they were only a few points behind target. It was common case that at no point had the claimant’s work performance been criticised or been the subject of any disciplinary action.
9. On 11 February 2015 the claimant sent an email to Alison McKinley the Operations Director of the respondent. Because of the different constructions put on this email by the claimant and the respondent we set it out in full. It read as follows:-
“Hi
Just a thought, at the moment is there anything within Abbey for myself away from Newforge.
Thanks.
Anne”
10. Ms McKinley replied on 11 February saying:-
“Hi Anne
Sorry you feel like this. Do you mean a sales roll [sic], another branch or what are you thinking?
Alison”
11. The claimant did not reply to this email. Her explanation for the email to the tribunal was that she had sent the email out of frustration after a visit one day from Ms McKinley regarding changes in the bonus scheme. Ms McKinley’s construction of the email was that it was a request for a transfer out of the company’s Newforge branch and this was the line also taken by Ms Davidson, the Group Compliance, HR and Training Director. As noted in cross-examination Ms McKinley and Ms Davidson had some similarities in their witness statements, indeed several paragraphs in their respective statements were identical.
12. During the week of 23 March 2015 a number of the Executive Directors of the respondent reached a decision that it would be necessary to transfer the claimant out of its Newforge branch. There was no board meeting to take a formal decision in relation to this matter.
13. On 31 March 2015 Alison McKinley phoned the claimant to ask for a meeting with the claimant and said she would be bringing Joann Davidson. There were no rooms available at Newforge so they went to the restaurant where tea and scones were ordered. Ms McKinley then advised the claimant that there had been a board meeting and that the board had lost confidence in the claimant as manager, that they wanted to get back the control of Newforge as they hadn’t had this for several years and they needed a new manager. The claimant’s evidence (which was not disputed) was that they already had a new manager lined up for Newforge and that they needed to get it sorted out immediately as it was the beginning of the new financial year. The claimant was offered a post as a Senior Insurance Technician at the respondent’s Lisburn branch (closer to her home) with her total gross pay being guaranteed for three months as matching her existing package. This was in fact an offer of a salary of £24,000.00 per annum plus guaranteed bonus of £1,500.00 for the next three months. At the meeting the claimant expressed her concern about doing full-time sales again and asked what would happen if she didn’t want to go and would she be made redundant. Ms Davidson made notes of the meeting, which show the claimant asked on a second occasion about the possibility of whether she might be made redundant if she didn’t move. Ms Davidson advised her that there were no other suitable jobs at her salary level so options may be to be made redundant or terminated. It was agreed that the claimant would think about the matter overnight and revert the following day. Ms Davidson’s notes of the meeting confirm that they needed to act fast as they were nearly in a new financial year.
14. The following day the claimant phoned Joanne Davidson to clarify what salary was being offered for the Lisburn post. The claimant indicated that she was not happy with being demoted or the loss of salary, said that she did not want to move to Lisburn and asked about other options. Ms Davidson advised that there were no other options and the claimant asked if they were going to make her redundant. Ms Davidson advised that this was not an option and for the claimant to continue in her role as manager. The same day Mr Storey, the Chairman of the respondent company and Mrs Jackson the Sales Support Manager arrived at Newforge and they had a discussion with the claimant. During this discussion the claimant advised Mr Storey of the conversation she had had with Ms McKinley and Ms Davidson. She said that Mr Storey seemed unaware of this. He asked Mrs Jackson if there was a board meeting and she had advised that she didn’t know. Mr Storey told the claimant that he would guarantee her bonus for six months as opposed to three months. The claimant expressed her upset at the whole matter and Mr Storey asked her to think about it for a week and advise them of her decision.
15. The same afternoon Ms McKinley and Ms Davidson arrived at Newforge to speak to the claimant. They handed her a letter of suspension and advised that they were investigating the situation and there would be a subsequent disciplinary meeting at Carrickfergus on 8 April 2015. Although the letter states that the claimant had initially turned down the Lisburn position, it goes on to say “we now understand that George Storey and Jeni McKelvey called with you today to discuss this matter further and have offered you the opportunity to reconsider this offer until Tuesday 7 April 2015.”
16. The letter said that the disciplinary hearing would be conducted by Ms Davidson and Ms McKinley with Sarah Toms in attendance as a representative of Group HR. It set out her right to be accompanied and asked her to confirm her attendance at the meeting.
17. The letter also included the following paragraphs:-
“Please note should this meeting confirm the company’s current position that it may have lost confidence in your suitability continuing managing Newforge branch, your employment may be terminated for reasons other than misconduct.
In light of the seriousness of this matter we are writing to advise that we have taken the decision to suspend you from work on full pay until further notice pending the outcome of the disciplinary hearing.
During the period of suspension you must not attend, or contact, your place of work or any of the company’s premises or clients without the prior permission of the management.
In addition you should not discuss the allegations or any subsequent part of this process with your colleagues ...”
18. The claimant set out in her witness statement that she felt devastated and disgusted at being suspended as she had not done anything wrong. She said that she felt that she was being treated as though she had committed some form of misconduct but all that she had done was to refuse a demotion and a salary cut.
19. On 8 April 2015 the claimant attended a disciplinary meeting in Carrickfergus accompanied by Linda Humphreys. The disciplinary panel consisted of Joann Davidson and Alison McKinley, Sarah Toms from Human Resources was also present. The claimant was asked about the role in Lisburn and expressed her concern that she was being asked to move. She had said that she would prefer to be away from a sales role. She said during that meeting, “I feel like I had been shafted. I feel shafted to be moved to Lisburn and move me out of Newforge. You have lost confidence in me as a manager in Newforge because of the politics in Newforge. Since Robert left in November time I have had no support and no advertising.”
20. Ms Davidson indicated that there was now also the possibility of a manager’s role but they had not spoken to the other manager yet. She indicated that if the claimant was interested in the manager’s role they would leave her salary as it was but would not put a guaranteed bonus in place. She said that the claimant’s salary would be way above what a manager in that size of branch would earn. She went on to say,
“If we wanted to shaft you we would not even be considering this and I know this is very upsetting for you, it has been upsetting for a long time. We had to make the right decision for the company but we want you to be part of it going forward, that is not the actions of someone who wanted to shaft you. There are a variety of reasons why we need to take these steps.”
The claimant commented, “It is the suspension part that has made me think you want to get rid of me.” While the background situation in Newforge was alluded to in the course of that meeting Ms Davidson said very clearly,
“It is only now that we are in a position to change what we have ... whatever the reasons we are not here to discuss this, we have to make changes and are asking you to make them with us.”
There was no discussion during the meeting about whether, or for what reasons the company had indeed lost confidence in the claimant as manager, so she was given no opportunity to deal with that issue. It was made clear to the claimant that remaining in Newforge was not an option. She was also told that the manager’s post on offer was within a 20 mile radius (although not told the exact location) so it was within travelling distance for her. The average manager’s bonus in that office was £580.00 per month although that manager was not earning a premium bonus so that there was an option to earn the premium bonus.
21. Following this the claimant had asked for some further time to consider matters. The claimant had a discussion with Sarah Toms on 9 April 2015 when they discussed the various options. The claimant subsequently attended her doctor as she said she had not been sleeping due to stress and pressure. She subsequently contacted Ms Toms on 10 April to say that she would not be able to attend the arranged meeting. On 14 April she contacted Ms Toms again to advise that she had decided to accept the Senior Technician role in Lisburn. The claimant said that she had felt under pressure in relation to this and that although she did not feel happy about it she felt she had no choice as a single parent with two children to provide for. The claimant was subsequently advised by Ms Toms that the manager’s post which had come up was in Bangor. The claimant at that stage said that she was concerned that she would not be able to get to Bangor for a 9 o’clock start due to having to get her children out to school, and also that she did not know if she could trust the respondent offering her the Bangor post as they had said they had lost trust in her as a manager.
22. In her evidence to the tribunal Ms Davidson indicated that she felt the claimant had not given proper consideration to the Bangor post, that there was potential to earn more in that post as the outgoing manager was only part-time. She also said that the respondent had flexible working arrangements available and would have been able to accommodate the claimant in this. She also disputed whether the claimant had any real difficulty in getting to Bangor for 9.00 am as the claimant currently worked a shift pattern at Newforge. It was notable however that in some of the documentation opened to us that it was clear that an early start at Newforge was only once a week while the travel from Lisburn to Bangor on a daily basis would more than double the claimant’s journey to work each day.
23. The claimant was due to go on a period of leave and she subsequently received a letter from the respondent dated 20 April 2015 confirming details of her new role at Lisburn. This confirmed that her basic salary would be reduced by £10,000.00 per annum although she was guaranteed a bonus of £1,500.00 per month for six months. At no point was the Bangor role offered to the claimant in writing nor did the respondent ever clarify that she would be entitled to flexible working or that they would accommodate her in any way, for example, by guaranteeing her bonus in that post for a period of time.
24. The claimant subsequently sent in a further sick line, confirming that she was suffering from management induced stress from 10 April 2015. The claimant’s evidence was that during this period she felt unable to do anything or to think about these matters as she felt “the life and soul had been kicked out of me.”
25. On 11 May 2015 the claimant lodged a grievance against the respondent alleging that she had been demoted, her salary reduced considerably and that she had been bullied. She focussed in particular in that letter on the fact that she had been suspended but no allegations of misconduct had been put to her during the disciplinary meeting and that she felt the company had engineered a disciplinary process effectively to force her into accepting a demotion. She also said in the letter that she would not accept a demotion and variation of her terms of employment.
26. The respondent decided to approach Mr Patrick Moore, MCL Associates to conduct the grievance on its behalf. Mr Moore confirmed in his evidence that he was retained by the respondent to assist them with case preparation, legal research and legal representation at tribunals and that he also on occasion conducted grievance hearings when requested.
27. Mr Moore’s evidence was that Sarah Toms took the view that everyone in Senior Management of the respondent had some involvement in the claimant being transferred out of her manager’s post at Newforge so they wanted someone else to hear the grievance. Mr Moore requested the claimant’s grievance letter and all relevant papers were copied to him before the hearing. Mr Moore then noted a number of questions which he felt the claimant needed to answer at her grievance hearing (see paragraph 7 of his witness statement).
28. He expressed in his witness statement his concern that the claimant’s written terms and conditions of employment allowed the respondent to move to other location offices and/or sites as determined by the needs of the business. He went on to say that after reviewing the claimant’s grievance letter and associated documentation he rang Sarah Toms and discussed matters at length with her. He stated in his witness statement that Ms Toms explained that the respondent did not want to get rid of the claimant but that “everything they offered her was being rejected”, as the claimant went from rejecting the role in Bangor to accepting the Senior Sales Technician job in Lisburn and then subsequently rejecting that too. He stated in his witness statement that Ms Toms went on to explain the decision had been taken to discipline the claimant with a view to terminating her contract for “some other substantial reason”. However this had been put in abeyance due to her sickness absence and her grievance hearing.
29. The grievance hearing took place on 29 May 2015. Mr Moore invited the tribunal to read the notes of that grievance hearing which ran to some 12 pages. He said in his witness statement that the grievance hearing was “very frustrating for me as the claimant on the one hand agreed that her terms and conditions of employment allowed the respondent to move her while on the other hand she refused to go.” He suggested that the answers the claimant gave to him at the grievance meeting contradicted the claims she had made in her grievance letter. He also pointed out the mobility clause to her on a number of occasions. We were invited to read the notes of the meeting and have done so. The claimant’s evidence was that she felt pressurised at this grievance meeting and that she was concerned that it did not address the grievance which she had raised namely her demotion and pay cut.
30. Having read the notes, it appears to us that this meeting did not focus on the claimant’s concerns, but that Mr Moore throughout the meeting focussed very much on the mobility clause (which had never previously been mentioned to the claimant). Indeed he first raised it right at the outset of the meeting. Essentially the claimant’s concerns were that she was being obliged to move from Newforge, a new manager had already been lined up for that post and she believed that the jobs she had been offered were a demotion as far as the Lisburn post was concerned and not appropriate as far as the Bangor job was concerned, due to travel and bonus concerns although it was not formally offered to the claimant. Mr Moore repeatedly put it to the claimant that the company could oblige her to move under the mobility clause in the contract. On one occasion he said to her, “The company can dictate where you work. Do you agree?” Mr Moore put it to the claimant again that the company could move her at any time and she responded, “I would like to think that they would discuss it with me first.” The discussion was lengthy and repetitious. The claimant felt that Mr Moore was not taking her concerns on board. At one point in the meeting Mr Moore referred to the company’s loss of confidence in the claimant in her role in Newforge and said to her, “Do you recognise that the loss of confidence is misconduct.” It was put to him in cross-examination that this was in fact incorrect. His answer was, “It could have been better phrased, but the claimant accepted it.”
31. At the grievance meeting Mr Moore also queried the claimant’s medical reports and asked if her doctor was a trained psychiatrist or psychologist. The claimant said she felt undermined by this question but Mr Moore’s comment was “quite the reverse”. He went on to say that often sick lines were queried by tribunals because a doctor’s finding of work-related stress was made by a General Practitioner rather than a psychiatrist or psychologist. He went on to say that if he had gone back to the respondent with a decision contrary to what they wanted and supported the claimant’s grievances, it would have given more credence to the claimant’s condition in any decision letter he might draft. Having re-read the notes of the grievance hearing it seems to us that right from the outset Mr Moore focused on the mobility clause and insisted that the claimant should have moved in accordance with the mobility clause. He did not appear to take on board at all her concerns about demotion and salary reduction in relation to the Lisburn post, or the difficulties presented by the Bangor post in terms of travel. Indeed the claimant said in response to Mr Moore that she would be willing to go to Lisburn if her salary was kept the same and she had her bonus on top of that (as she previously had in Newforge).
32. Mr Moore subsequently issued an outcome letter to the claimant, which had been redrafted after consultation with Ms Toms and Ms Davidson. It was agreed that the additions made by Ms Toms and Ms Davidson had softened the tone of the letter.
33. The core of the letter reads as follows:-
“During the grievance hearing it was brought to your attention that at clause 6 of your terms and conditions of employment, whereby the company is perfectly entitled to move you wherever and whenever the need arises to work in another branch. The company had offered you the option as soon as it arose, of moving you to manage another branch (on your current basic salary) and, had they insisted on this transfer, your refusal to go there may have been considered tantamount to a failure to follow a reasonable management instruction, which could have been dealt with by way of a disciplinary process.
Equally because at the outset of the discussions, no other Manager posts were in existence at that time, the offer of a Senior Technician post in Lisburn on a salary which was highest for this grade in the company, with the built-in bonus for an extended period to match your existing total gross salary, was in my view an extremely generous one given the alternative which was to have your contract terminated for “some other substantial reason”.
I have spoken again with the HR department and they are still keen for you to take up the latter offer until close of business on Wednesday 17 June 2014 after which time the offer will be reviewed.
You have the right to appeal this decision ...”
34. On receipt of this letter the claimant felt that she had no option but to resign and wrote to the company accordingly on 15 June 2015. In that letter she stated as follows:-
“I feel I am left with no choice but to resign in light of the way I have been treated by the company through its efforts to coerce me into accepting a demotion and an unjustifiable variation of my terms and conditions of employment. The company’s actions in suspending me, conducting an disingenuous disciplinary process and its harassment to force me to accept an alternative role represent a fundamental breach of my contract of employment and a breach of the trust and confidence between us.
I have sought to resolve the issues I have faced within my employment by the company’s grievance procedure however following receipt of Mr Moore’s outcome letter dated 8 June 2015 it is clear that the company is not willing to properly investigate this matter or to address same in an impartial and objective manner. The fact that the outcome letter has tracked changes throughout is indicative of the careless approach the company has adopted in dealing with me and further raises questions as to who had input into the decision other than Mr Moore.
I wish to highlight that the company has at no time raised any issues with my management at the Newforge branch prior to March 2015 and it at no time sought to engage me in any form of performance management before taking the decision to suspend me and subject me to a disciplinary process without explanation and justification. The company’s motives have been at all times to exert pressure on me to move to accept the demotion and a reduction in my salary without following any procedures.
This company’s treatment of me throughout this time has had a detrimental impact on my health and caused me to suffer management induced stress as evidenced by my sick lines. In light of the company’s conduct and failure to address same I see no alternative but to resign my position immediately ...”
35. On the same day the claimant sent an appeal letter to the respondent setting out her concerns about Mr Moore’s decision and referring to many of the concerns raised in her resignation letter. The respondent dealt with that appeal under the modified procedure and the appeal was dealt with by Sarah Toms, in spite of the fact that Ms Toms had thought it appropriate to have an independent person involved in the claimant’s original grievance because so many senior management had been involved in the latter previously.
36. The claimant lodged her claim to the Industrial Tribunal on 23 June 2015. At the date of the hearing the claimant had not been successful in finding other work. She indicated that she had been certified as sick at the time of her resignation and had subsequently gone on pre-planned holidays in July and had started to look for work seriously in August, although there was little available within her field of expertise. She said that she had contacted one firm of insurance brokers who indicated that a post may be coming up within the next few months, but at the date of the hearing this post had not been advertised and so the claimant had not applied for it. No evidence was led before the tribunal as to whether the claimant was restricted in any way under the terms and conditions of her employment with the respondent from working within the insurance industry for a period of time after termination of her employment.
THE RELEVANT LAW
37. The relevant law in relation to constructive dismissal is to be found in Article 127 of the Employment Rights (Northern Ireland) Order 1996 which provides as follows:-
“127(1) For the purpose 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.”
38. Harvey on Industrial Relations in Employment Law (“Harvey”) states at Division D1 paragraph 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 an actual breach or an anticipatory breach.
(2) That the 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. A genuine, albeit an 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 will be deemed to have waived the breach and agreed to vary the contract.
39. Although constructive dismissals will often be unfair, the tribunal still has the obligation to assess the reason for dismissal and apply the normal tests of fairness, see Cawley v South Wales Electricity Board [1985] IRLR 89, EAT and Stephenson and Co (Oxford) Ltd v Austin [1990] ICR 609 EAT.
40. The conduct relied upon to constitute a breach of contract must be a repudiatory breach of contract not simply unreasonable behaviour on the part of the employer. In Brown v Merchant Ferries Ltd [1998] IRLR 682 NICA, the Court of Appeal in Northern Ireland indicated that, although the correct approach to constructive dismissal is to ask whether the employer was in breach of contract and not whether the employer acted unreasonably, if the employer’s conduct is seriously unreasonable this may provide sufficient evidence that there has been a breach of contract.
41. The editors
of Harvey note at Division D1 paragraph 425.01:
“Certain conduct will nearly always amount to a breach of contract. For
example, if the employer:
· unilaterally reduces the pay of the employee (Industrial Rubber Products v Gillon [1977] IRLR 389);
· unilaterally changes his job duties (Coleman v S& W Baldwin [1977] IRLR 342, Genower v Ealing Hammersmith and Hounslow Gill Heath Authorities [1980] IRLR 297, Pederesen v Camden London Borough Council [1981] IRLR 173 CA ...
In those circumstances the employee may leave and it will amount to a constructive dismissal. The employer does not usually have the contractual right to do these things.”
MOBILITY CLAUSES
42. In this case the employer has sought to rely on a mobility clause. Mr Warnock for the claimant noted that such a clause allows for worker mobility as opposed to worker demotion or unilateral change of the worker’s duties or pay. He also referred us to the decision in United Bank Limited v Akhtar [1989] IRLR 507 which sets out the position in relation to the exercise of a mobility clause as follows:-
(1) The clause is subject to reasonable notice being given to the claimant, with reasonableness depending on the circumstances, see Prestwick Circuits Ltd v McAndrew [1990] IRLR 191.
(2) The mobility clause must be operated in such a way as to make it feasible.
(3) That in operating the clause, the employer should not without reasonable and proper cause conduct themselves in a manner calculated or likely to destroy or to serious damage the relationship of trust and confidence between employer and employee.
43. In Akhtar Knox J stated at paragraph 44 of the judgment:-
“... there is a clear distinction between implying a term which negatives a provision which is expressly stated in the contract and implying a term which controls the exercise of discretion which is expressly conferred in a contract. The first is, of course, impermissible .... The second, in our judgment, is not impermissible because there may well be circumstances where discretions are conferred but, nevertheless, they are not unfettered discretions which can be exercised in a capricious way.”
44. It was made clear in White v Reflecting Road Studs Ltd [1991] IRLR 331 that tribunals should be cautious not to revert back to the Pre-Western Excavating “simple reasonableness” test in assessing the merits of constructive dismissal claims engaging a mobility clause. In that case, it was noted that the decision in Akhtar should not be understood as implying a term to the effect that the employer should act reasonably in exercising a discretion under a contractual mobility clause, rather that it was to be implied that the employer should not exercise his discretion in such a way as to prevent the employee from being able to carry out his part of the contract. The test is contractual as has been repeatedly emphasised by the courts. The question is therefore not whether the employer acted reasonably but whether the employer acted in breach of contract. This question must of course be seen in light of the implied term of trust and confidence which has been held to be an overriding term (see Woods v WM Car Services (Peterborough) Ltd [1982] IRLR.
45. Mr Moore for the respondent suggested that the respondent had not acted unreasonably in relying on the mobility clause, although he conceded that mobility clause had only been raised by him at the grievance stage and had not been flagged up to the claimant by Ms McKinley and Miss Davidson at any earlier point.
THE IMPLIED DUTY OF TRUST AND CONFIDENCE
46. The implied duty of trust and confidence was affirmed by the House of Lords in Mahmud and Malik v Bank of Credit and Commerce International SA [1997] IRLR 606 in the following terms:-
“The employer shall not without reasonable and proper cause conduct itself in the manner calculated and likely to destroy or seriously damage the relationship of trust and confidence between the employer and the employee.”
47. It is important to note that the test for breach of the implied duty of trust and confidence is an objective one. The House of Lords noted that the duty of trust and confidence may be undermined even if the conduct in question is not specifically directed at the employee. The duty of trust and confidence may be broken indeed even if an employee’s own trust and confidence is not undermined. Similarly, their Lordships pointed out that it followed that there would be no breach simply because the employee subjectively feels that such a breach occurred, no matter how genuinely this view is held. (See Buckland v Bournemouth University Higher Education Corporation [2010] EWCA Civ 121 and London Borough of Waltham Forest v Omilaju [2005] IRLR 35.
48. Omilaju also emphasises that the breach of contract complained of must be repudiatory in nature. That is, it must be sufficiently important to justify the employee resigning or it must be the last in a series of incidents which justify his leaving. Harvey comments that where the alleged breach of the implied term of trust and confidence constitutes a series of acts, the essential ingredient of the final act is that it is an act in a series, the cumulative effect of which amounts to the breach. It follows that although the final act may not be significantly blameworthy or unreasonable, it must contribute something to the breach even if it was relatively insignificant (see Omilaju). Mr Warnock also referred us to the case of Garner v Grange Furnishing Ltd [1977] IRLR 206 which indicates that failing to treat a long serving employee with dignity and consideration can amount to a breach of the implied duty of trust and confidence.
49. Mr Moore argued that the claimant’s email to Ms McKinley in February 2015 was a clear request for a transfer and that the respondent was simply responding to this when they approached her at the end of March to move to Lisburn. He noted that a lot of emphasis had been placed by the claimant on the fact that she was suspended but he submitted that this was necessary in the circumstances and despite commentary to the contrary, there was actually no threat of dismissal to the claimant. He conceded however that the respondent had said if the claimant did not accept the role of Senior Sales Technician it may be necessary to consider the option of redundancy or termination. He submitted that the respondents were reasonable employers who did everything they could to keep the claimant in a job. He also suggested the proposal that the claimant’s salary as a Senior Sales Technician plus guaranteed bonus would be maintained for six months meant that she would not have been at a financial loss. He did not give any thought to what the claimant’s pay would be after the six months were up. He also suggested that it had been unreasonable of the claimant to turn down the position in Bangor. While he conceded that that job had a lower bonus, he noted that the claimant would be going in as a full-time manager rather than the previous part-time manager and would have potential to earn more. Mr Moore raised the question of whether in law the implied term of trust and confidence could trump an express mobility clause in the contract.
REASONS AND DECISION
50. We have considered the evidence put before us and the submissions and it is our view that the claimant was unfairly constructively dismissed. We set out our reasons below in relation to each of the issues raised by the claimant.
(1) The respondent’s attempt to transfer and demote the claimant by moving her to a post as Senior Sales Technician in the Lisburn branch.
51. The claimant did send an email to Miss McKinley on 11 February enquiring as to whether there were any other vacancies within Abbey for herself away from Newforge. The email was brief and started with the words, “Just a thought ...”. In light of the content of the email and also the fact that it was not followed up by the claimant in any way, we accept the claimant’s evidence that this was an email sent on a day when she was feeling frustrated and was not a firm request to be moved away from Newforge. We have difficulty in seeing how the respondent would have construed it as such. We also note that while Miss McKinley responded to the email asking for more detail, she did not pursue the matter any further either until the end of March when a decision was taken to move the claimant away from the Newforge branch.
52. It is clear that there was some background to the proposed move of the claimant from Newforge. However this was not raised with the claimant at the time, it was not referred to in the pleadings and we do not consider it appropriate to go into this in our decision, given that it formed no part of the discussions or negotiations with the claimant.
53. The initial approach made to the claimant was for her to move from Newforge to a position as a Senior Sales Technician in the Lisburn branch which was closer to her home. The post she was offered however represented a demotion from a manager’s post to a sales technician’s post. While the claimant saw this as a demotion (and none of the respondent’s witnesses suggested it wasn’t), her main concern was that there would be a drop in pay. This would be an obvious and understandable concern to any employee. The respondent asserted that they were in fact protecting the claimant’s pay with an offer of a guaranteed bonus for six months. However this ignores the fact that the claimant would have been suffering a drop in basic salary from £32,500 to £24,000 per annum and would also have lost a shift allowance of £1,500 per year. In total therefore there would have been a loss in her overall salary of £10,000 per annum. Added to this, in her manager’s post she regularly earned a bonus of £1,000 to £1,200 per month. While a bonus of £1,500 per month was to be guaranteed, it was only going to be guaranteed for six months and after that the claimant’s bonus would depend on what she earned. Given that she would be in a different branch, the claimant had no way of estimating what that bonus might be.
54. While the respondent took the view that the claimant was an excellent sales woman, and we have no reason to doubt this, it was not at all clear to us that the claimant would have been earning the same as she was in her post at Newforge. Although the respondent made the case that the claimant’s salary for the sales technician’s post in Lisburn would have been the highest within the company, it nevertheless was a sales person’s salary, and considerably lower than her manager’s salary. She would therefore have lost considerably in terms of income. We can also appreciate from the perspective of the claimant as a long standing employee, she was concerned that she was being demoted even though there had been no issues raised in relation to her personal performance.
55. In relation to the Bangor post, the claimant was correct that this was never formally offered to her so that she could consider the actual terms and how this might work out for her. We fully accept that a journey from Lisburn to Bangor was considerably longer, both in terms of distance and of time (particularly at rush hour), than a journey from Lisburn to the Newforge Office in South Belfast. We also note that the Bangor branch was considerably smaller than Newforge, which may have had an impact on the standing the claimant considered she was being given. It is clear that her bonus would have been considerably lower than in Newforge at least initially. There was no suggestion that the claimant would be given a guaranteed bonus for a certain period of time to enable her to build up that business, although the respondent indicated they considered there was scope to improve the business. There was no suggestion either that the claimant was actually offered the opportunity for flexible working as an incentive to her to take this post.
56. As regards the mobility clause, we note that this was only raised by Mr Moore at the grievance stage and was never raised by the respondent at any time in the discussions between Miss McKinley, Miss Davidson, Miss Toms and the claimant. It was never put to her that the employer was entitled to move her to a different post. When Mr Moore put it to her, the claimant accepted that the mobility clause was there but quite reasonably suggested that it should be discussed with her before she was moved. We are also conscious of the points made by Mr Warnock in relation to the exercise of mobility clauses. The clause referred to in the claimant’s contract provides as follows:-
“Place of work
Your normal place of work will be at the Newforge Lane branch. You may be required to work at other locations, offices and/or sites as determined by the needs of the business.”
57. This clause to us indicates that the claimant was entitled to assume that her normal place of work would be at Newforge but that she may at the discretion of the company be asked to work at other locations from time to time. There was nothing to suggest that the claimant must move immediately or that failure to agree to any move whatsoever would constitute failure to carry out a reasonable work instruction and therefore lead to disciplinary action. It is quite correct to say that an employer must not exercise a mobility clause without proper consideration and consultation. As the McAndrew case indicates, reasonable notice must be given to the claimant and the mobility clause must be operated in such a way as to make it feasible. Operating a mobility clause in such a way that it would more than double the claimant’s journey to work in terms of distance (and probably also time) over some of the busiest roads in Northern Ireland at peak travel times would in our view be questionable as to its feasibility. The claimant had also quite reasonably raised her childcare responsibilities, and the feasibility of her getting to work on time in light of those.
58. A mobility clause allows an employer to reassign an employee to a different post or location as required by the needs of the business. It does not unilaterally permit an employer to demote an employee, or to reduce their salary significantly, as would have occurred in this case. We accept on the basis of the information before us that the Lisburn post was a demotion to the position of Senior Sales Technician and further that it would have reduced the claimant’s basic salary by approximately one third. While her bonus may not have been affected significantly in the longer term, this would be a significant drop in wages in anyone’s terms. As far as the Bangor post was concerned, it was still a manager’s position and would have attracted the same basic salary as the claimant’s post at Newforge. However the bonus currently being earned by the manager in that post was £580 per month, as opposed to the £1,000 to £1,200 per month being earned by the claimant and again there would (at least initially) have been a significant drop in income for the claimant. Added to this she had further to travel, which presumably would have added to her travel costs.
59. All in all we accept that the proposal to move the claimant from Newforge either to Lisburn or to Bangor constituted an express breach of contract in that the claimant would have been demoted if moved to Lisburn and in either Lisburn or Bangor was likely to suffer a significant loss of income. (See Industrial Rubber Products v Gillon and Peterson v Camden London Borough Council (see paragraph 41 above). Unilateral demotion and reduction in pay are not contractually permissible without the employee’s consent, and so, applying the ruling in Akhtar, the exercise of a mobility clause by the employer does not permit him to breach other, fundamental, terms of the contract, such as pay and demotion.
(2) The respondent’s response decision to suspend the claimant and move to a disciplinary hearing
60. The claimant complains that the respondent’s decision to suspend her on 1 April and move to a disciplinary hearing constitutes a further breach of the implied duty of trust and confidence. We are at a complete loss as to see why the respondent decided to suspend the claimant in the circumstances. The claimant had been approached just the day before about a possible move to Lisburn; she had found this something of a shock and had immediately protested about the potential demotion. However the following day she had had a visit from the chairman of the respondent company, Mr Storey with whom she had always had a good working relationship and after discussion with him and Jeni McKervey she had agreed to think about the matter further. They had given her until 7 April to reach a decision. Why Miss Davidson and Mrs McKinley then decided that it was appropriate to suspend the claimant on the same day, with an indication that she may be dismissed for “some other substantial reason”, is unfathomable from our point of view. It seems to us bizarre that having giving the claimant time to consider the matter further, the next move would be to suspend her. Not surprisingly, the claimant took this as an indication that the respondent considered she was guilty of some kind of wrongdoing, but the suspension and disciplinary letter made no reference to this whatsoever. To say that this approach was heavy handed is an understatement. The sensible approach in our view would have been to leave the matter in abeyance until 7 April to give the claimant an opportunity to consider the matter further and then to look at the matter again. It seems to us however outrageous to suspend the claimant when there was clearly no misconduct on the claimant’s part (certainly none was referred to either to her or before us in the tribunal). This is all the more so in the case of a senior employee, who had been with the respondent firm for 16 years. For the reasons expressed above, we fully accept that this behaviour on the part of the respondent was behaviour which was “calculated and likely to destroy or seriously damage the relationship of trust and confidence between the employer and the employee” within the definition set out in Mahmud and Malik (see paras 46 and 47 above).
(3) The pressure applied to the claimant to accept a demotion and move to Lisburn by a threat of termination of employment
61. On 31 March 2015 when the claimant asked what would happen if she was not keen to move to a full-time sales role in Lisburn, Joanne Davidson indicated that there were no other suitable jobs at her salary level and so if she did not accept the job, options “maybe to be made redundant or terminated.” Miss Davidson also told her on that day that ideally there was a need to move fast as they were about to start a new financial year. Subsequently when the claimant was suspended on 1 April the suspension letter (which also invited her to a disciplinary hearing) indicated as follows:-
“Please note should this meeting confirm the company’s current position that it may have lost confidence in your suitability to continue managing the Newforge branch, your employment may be terminated for reasons other than misconduct.
In light of the seriousness of this matter we are writing to advise that we have taken the decision to suspend you from work on full pay until further notice pending the outcome of the disciplinary hearing.”
62. At the disciplinary meeting Miss Davidson referred to the claimant’s concern that if she did not take the job in Lisburn, what would happen and whether it would be redundancy or termination. She went on to say, “It would not be a redundancy as a job still needs to be done [at Newforge] therefore it is not a redundancy. We are saying it may be a termination.” Given that the claimant was also aware that a new manager by this stage had been lined up for the Newforge office and that she had been told about this, we can appreciate that the claimant felt under considerable pressure in relation to the move to Lisburn. We understand that this would have been even more so as time went on. Certainly by the end of April the claimant, although she was on sick leave, would most likely been aware that a new manager had taken up post in Newforge and therefore that there was no likelihood of her being able to return to that job. In all the circumstances we consider that this was further conduct on the part of the respondent which was likely to have a seriously detrimental effect on the relationship between the employer and the claimant and as such was a repudiatory breach of contract.
(4) Conduct of the grievance hearing and the outcome
63. The claimant’s main complaints about the grievance hearing were that she felt pressurised by Mr Moore, she considered that he focussed almost exclusively on the mobility clause and on trying to get her to accept that the respondent could move her to Lisburn, without fully considering her concerns about demotion and loss of salary. Having read the notes of this meeting and having noted some of the comments made by Mr Moore to the claimant, we can appreciate her concerns. At the outset of the meeting it appears that Mr Moore immediately homed in on the mobility clause and started to put to the claimant that the company could move her anytime it wished. He also said in his direct evidence to the tribunal that in preparing for the meeting he had prepared a list of questions “the claimant needed to answer” and that he had also had a lengthy discussion with Ms Toms in advance of the actual grievance hearing. These indications, together with the fact that Mr Moore had been employed on a retainer to represent the respondent for the previous four years, indicate to us that his approach to this matter was not impartial.
64. We are conscious that there are cases where an employer will employ an external consultant to deal with grievances or other HR matters and such a consultant is of course paid for their services. Equally, another employee may deal with a grievance and this does not necessarily mean that they are not impartial. Thus the fact that Mr Moore was retained by the respondent to give employment law advice is not of itself evidence that he was not impartial. We are concerned that he seemed to think the claimant “needed to answer” questions, rather be allowed to put her case at the grievance meeting. Even more concerning was the “lengthy discussion” Mr Moore had with Ms Toms, which gave her the opportunity to put the respondent’s side of the argument in advance of the claimant having the opportunity to state her grievances.
65. Given that Mr Moore immediately started to talk to the claimant about the mobility clause at the outset of the meeting, rather than listening to the grievances which she outlined, indicate to us that he had already formed a view of the approach he was going to take in relation to the grievance. We also note that at various points he put to the claimant that failing to agree to move to Lisburn was failure to follow a reasonable work instruction and therefore was potentially a disciplinary matter. These comments, frankly, had no place at all in a grievance hearing. Furthermore he at one point asked the claimant if she agreed that the respondent’s loss of confidence in her as a manager was a misconduct matter. Not only was Mr Moore’s assertion incorrect, but it was completely inappropriate for him to raise this at a grievance which the claimant had raised in relation to a proposed demotion.
66. We have read the notes of this meeting which are lengthy, repetitive and appear to be a cross-examination of the claimant on why she would not move either to Lisburn or to Bangor. In our view there was no real effort made to examine the claimant’s concerns about her demotion and loss of salary. We are not satisfied on the basis of the information before us that the grievance was conducted in a fair and impartial manner. In relation to the outcome of the grievance, the claimant apparently received a letter which showed the tracked changes. Not surprisingly, this led to her being concerned that someone other than Mr Moore had had input into the outcome. Indeed it transpired that Miss Toms and Miss Davidson had contributed to the drafting of the letter. While we accept that their input did not change the outcome in any way and indeed may have softened the impact of the letter in some respects, we nevertheless consider that it was completely inappropriate for them to have been involved, because to do so indicates that the process was not independent, was not solely Mr Moore’s work and was not therefore impartial. To compound matters further, the claimant’s grievance appeal was dealt with by Miss Toms, who had not considered it was right for anyone in the respondent’s management to hear the initial grievance, yet she heard the appeal, even though she had contributed to the outcome letter. In the circumstances we consider that this constituted a repudiatory breach of contract which was likely to destroy or seriously damage the relationship between the employer and employee.
CONCLUSION
67. Even if we did not consider that each of these matters individually breaches both express terms of the contract and the implied duty of trust and confidence, we would certainly consider that, taken together, they constitute a fundamental breach of the implied term of trust and confidence. We are also satisfied that the claimant resigned due to the respondent’s breaches of contract. We accept that it was right and proper for her to raise the grievance in the first place as this gave an opportunity for the employer to remedy its previous breaches of contract. We accept that having received the dismissal letter dated 8 June 2015, she acted promptly in lodging both her resignation and her appeal on 15 June 2015. We do not go into any detail in relation to the way the appeal was dealt with as this was subsequent to the claimant’s resignation. In our view there is no question of any delay of the employee’s part in this case.
68. There has been no suggestion by the respondent in this case that the dismissal was fair, except in the sense that the respondent suggested that the employer was entitled to rely on the mobility clause and that the claimant’s failure to accept a move is a failure to follow a reasonable work instruction on her part. First of all as we have already noted, the mobility clause was not referred to in any way by the respondent in its dealings directly with the claimant, but only by Mr Moore in relation to the grievance hearing. The mobility clause as drafted in our view shows a discretion on the part of the employer to redeploy employees; it does not allow them to demote individuals or unilaterally to reduce their pay. This is not a situation where we can accept Mr Moore’s suggestion that the implied duty of trust and confidence is “trumped” by an express mobility clause. The implied term which is the duty of trust and confidence must, it seems to us, run through all dealings which an employer and employee have with each other. It is our finding therefore that the claimant was unfairly constructively dismissed by the respondent. The respondent has not produced any evidence to show that such a dismissal was fair and accordingly we find that the claimant was unfairly dismissed by the respondent.
REMEDY
69. The question remains of the amount of compensation which would be just and equitable in all the circumstances. We are aware that the claimant was a long standing employee of the respondent which is reflected to a certain extent in the basic award which will be made to her. The claimant has included in her Schedule of Loss (figures for which were agreed by the respondent) amounts for pension loss and private medical cover.
70. In relation to future loss, we are aware that at the date of hearing the claimant had been dismissed for approximately five months. While the claim for future loss was for a further year, we consider it would be appropriate to make an award for approximately another seven months and accordingly we have made an award for future loss of 30 weeks. The award to be made to the claimant is as follows:
71. The claimant had been employed by the respondent for 16 years and was aged 48 at the date of dismissal. Her net salary was £638.77 per week which is subject to the statutory cap of £490.00 per week in relation to the basic award. The claimant was entitled to private medical cover of £15.06 per month. She also had a right to a company pension to which the employer contributed £92.38 per month and the employee contribution was £75.60 per month. The claimant told us she had not made any claims for benefits, and therefore the Recoupment Regulations do not apply.
72. We order the respondent to pay to the claimant the following award by way of compensation:-
Basic Award
8 x 1.5 x £490 = £ 5,880.00
7 x 1 x £490 = £ 3,430.00
________
£ 9,310.00
Compensatory Award
Immediate Loss
Net weekly salary - £2768 x 12/52 = £ 638.77 per week
Loss from the effective date of
termination to the date of the hearing
15/6/2015 to 24/11/2015 = 23 weeks
£638.77 x 23 = £14,691.71
Private medical cover £15.06 per month
X 12/52 = 3.48 per week
£3.48 x 23 = £ 80.04
________
£14,771.75
Pension Loss
Employer contribution = £92.38 per month
Employee contribution = £75.60 per month
(£92.38 + £75.60 = £167.98)
167.98 x 12/52 = £ 38.76
38.76 x 23 = £ 891.48
________
£ 930.24
Future Loss
Salary from the date of hearing
£638.77 x 30 weeks = £19,163.10
Medical Cover £3.48 x 30 = £ 104.40
_________
£19,267.50
Pension Loss
£38.76 x 30 weeks = £ 1,162.80
Loss of Statutory Rights = £ 500.00
________
TOTAL AWARD:- £45,942.29
73. This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.
Employment Judge:
Date and place of hearing: 24 and 25 November 2015, Belfast.
Date decision recorded in register and issued to parties: