United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 175_93_2001

Appeal No. EAT/175/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 20th January 1994

Before

THE HONOURABLE MR JUSTICE TUDOR EVANS

MR J D DALY

MISS A MACKIE OBE

---

PRESSUREFAST LIMITED          APPELLANTS

MRS P TURNER          RESPONDENT

---

Transcript of Proceedings

JUDGMENT

Revised


 


---

APPEARANCES

For the Appellants MR K O'DONOVAN

(Of Counsel)

Messrs Martineau Johnson

St Phillips House

St Phillips Place

Birmingham

B3 2PP

For the Respondent MR D PARRY

(Of Counsel)

Messrs Henry Evans Roberts & Co

11 Penrallt Street

Machynlleth

Powys

SY20 8AG


 


MR JUSTICE TUDOR EVANS: This is an appeal by Pressurefast Limited who were the employers of Mrs Patricia Turner, the Respondent. They appeal against the decision of an Industrial Tribunal sitting at Shrewsbury in November 1992, by which it was found that the Appellants had constructively and unfairly dismissed the Respondent. She began her employment with the Appellants as a Receptionist in May 1989. The Industrial Tribunal found as a fact, in paragraph 16 of their decision, that her contract of employment was terminated by the Appellants' conduct on the 10th June 1992.

The Respondent's husband was a Director and shareholder in the appellant Company and it was he who recruited her into her employment. The husband and others some of whom were in the employment of the Appellants, came under the suspicion that they were guilty of fraud and theft. Civil proceedings were instituted by the Appellants. They sought a Mareva Injunction which they obtained ex parte. Those proceedings were directed, as the Tribunal found, solely against the husband and the other persons involved in the alleged criminal activity. They did not involve the Respondent. Mr Lochhead, a Director and another Director, whom we think is Mr Stanley, reported the husband and the other people to the Police. As a result, on the 10th June 1992 the Police came to the Appellants' factory where they arrested the husband and the other alleged offenders on charges of fraud and theft. The Tribunal relates in the decision, when reviewing the evidence, that the Respondent was told by a Police Officer that she would be arrested, and indeed, she was arrested during the afternoon of the 10th June. She was subsequently on that day released on unconditional Police bail. At the time of the decision, as the Tribunal observe in the decision, neither she nor her husband had been charged with any criminal offence. But it was the fact that on the 10th June, her husband was dismissed by the appellant Company on grounds of gross misconduct.

The evidence before the Tribunal was given by the Respondent and by Mr Lochhead on behalf of the Appellants. In paragraphs 2 to 10 of the decision the Tribunal considered the evidence in some considerable detail. According to the Respondent, she felt under great pressure by the turn of events to which I have briefly referred. In paragraph 6 of the decision her evidence is summarised in this way:

"She had been accused of something she had not done. She regarded her accusers as Mr Lochhead and Mr Stanley."

Therefore, she felt it was impossible for her to return to her employment with the Appellants because of the way in which she had been treated and because of the suspicion of fraud which was the basis upon which she had been arrested. She gave evidence that on the 12th June she was told that the wife of the new manager who had just come into the Company had been given her job. She said that she had not received any pay for the relevant week ending on the 12th June 1992 and that she had heard nothing from the Appellants. She therefore alleged that she was constructively dismissed, giving the date of the 10th June 1992 as the date of termination of her employment. That was the date which, as we have indicated, the Tribunal found.

Mr Lochhead, in evidence said that he and Mr Stanley had provided information to the Police which led to the arrests of the husband and the other people but that he had not given information which led to the Respondent's arrest. The evidence was clear that he was not responsible for the arrest. Indeed, he was, unaware upon what information she was arrested and that, once matters were in the hands of the Police, he felt that he could not interfere. He accepted that after the arrest there was no communication with the Respondent. Whether she could have returned to work after her arrest was, he felt, a matter for discussion although he did not, he said, expect her to do so in the circumstances.

There had been some correspondence with the Employment Service following the Respondent's cessation of work. Upon her claim for employment benefit, on the 10th July 1992, the Appellant stated that the Respondent had been dismissed for misconduct.

Mr Lochhead said that that was an error but the Industrial Tribunal found as a fact that it did not accept that explanation. However, the Tribunal made these findings which are important, in paragraph 11 of the decision: first, that there was no prior investigation whether the Respondent had played any part in the matter which led to the arrests. The Tribunal accepted that Mr Lochhead had given no information to the Police. It is perhaps as well to refer to the express language of the Tribunal because it forms a crucial part in the first submission which is made by Counsel for the Appellants that there was, on the facts as found, an error of law. The Tribunal state:

"We find on the evidence there had been no prior investigation by the respondent whether the applicant played any part in matters which led to the arrest. Mr Lochhead's evidence suggests he gave no information to the police but it was a matter for them how they carried out their criminal investigations. We have, of course, to accept that. However, unless it was felt the applicant may have been implicated in her husband's alleged activities, then, knowing she had been arrested as a consequence of information given by the respondent as to alleged fraud, we find it surprising the respondent did not attempt to contact or communicate with her that, so as they, her employers were concerned, they had given no information which led to her arrest."

It is right to point out that in paragraph 15 the Tribunal expressed the view that the Appellants felt that the Respondent had played some part in the misconduct. Nevertheless, there is the express finding that Mr Lochhead did not give information to the Police blaming the Respondent and there is also a finding that the Appellants were not responsible for the arrest.

In paragraph 12 of the decision the Tribunal held:

"We find on that day, because of the way she was treated and believing, as we find she was entitled to believe, that her arrest followed from information supplied by the respondent, she reasonably believed it would be impossible for her to return."

In paragraph 15 they make these further findings:

"Having considered the evidence and the documentation we find the applicant was constructively dismissed. We find she was justified in terminating her employment by not returning to work in circumstances such as to entitle her to terminate her contract without notice by reason of the respondent's conduct. . . We find her arrest on suspicion of theft emanating from information given and without any attempt to suggest this was not the respondent's doing, breached the implied term of mutual trust and confidence that must exist between employer and employee. Although the respondent had no control over police investigations, they did nothing to suggest the police had acted beyond their remit resulting from information given on which her husband and others were arrested . . . We accept the police were not called for that purpose [that is to say in order to have the Respondent arrested] but when that became evident to the respondent [Appellant] as it must have been when they became aware of her arrest, there was an obligation on their part to indicate they had no responsibility so far as she was concerned, for police action. In the absence of any attempt by them to put the record straight, so to speak, so far as she was concerned, she was entitled to believe the police action stemmed from information given through her employer without prior investigation, so amounting to a breach of the implied term."

On behalf of the Appellant, it is submitted that in reaching that conclusion the Industrial Tribunal misdirected itself in law. Mr O'Donovan accepts that this contract of employment was subject to an implied term of mutual trust and confidence but he contends that the Tribunal was wrong in law in extending the term and holding that, if an employee was arrested by the Police and her employer has not laid information against the employee and had taken no action to cause the arrest, nevertheless, there is a duty, in discharge of the implied term, to tell the employee that it was not the result of anything which the employer had done and that they were not responsible for it. Counsel contends that on the facts as found there was an unjustifiable extension of the implied term.

The facts on which the submission is based are that the Appellants did not investigate the Respondent, that they were not blaming her in the civil proceedings, that they did not give any information to the Police which caused the arrest and therefore they were not responsible for it.

A second ground of appeal is that, in any event, the Industrial Tribunal misdirected itself in the last sentence of paragraph 15, which I read a few minutes ago, in which it is concluded that the Respondent was entitled to believe that the Police action stemmed from information given through her employee. Mr O'Donovan submits that her belief is not the correct test to apply. A subjective test is not material in determining the question of breach of contract. That can only be determined by an objective test.

On behalf of the Respondent, Mr Parry contended that the implied term was properly extended. It is argued that there is a finding to which we referred earlier that the Appellants felt that the Respondent played some part in the misconduct. As to that finding, we feel bound to say that it may be no more than that may have been the Appellants' state of mind but that it was not communicated to the Police. That conclusion is, we think, probably justifiable in view of the express finding that Mr Lochhead did not tell the Police anything which led to the Respondent's arrest. It is submitted, on her behalf, that the Appellants put the Respondent in an intolerable position on the 10th June 1992 by not telling her that they had not been responsible for the arrest and that they had done nothing to cause it. In those circumstances, Counsel contends that a breach of the implied term of mutual trust and confidence must follow.

The point involved on this aspect of the appeal is a very short one. We have paid careful attention to the submissions which are made on each side and it seems to us that the submission on behalf of the Appellant is well founded and that it does constitute an unwarranted extension of the implied term to hold on the facts that there was a breach of that term. It seems to us that it puts far too high a burden on an employer on the facts of this particular case. Moreover, in our view, the submission which is made as to the approach of the Tribunal in relation to the Respondent's belief and state of mind is well founded. Her belief cannot amount to the breach of an implied term. That is not the test. The test is, indeed, an objective one and it seems to us Mr Parry could not seriously challenge that conclusion.

The question has been raised as to whether there is any basis upon which we could conclude that this matter should be remitted either to the Tribunal that heard the matter or to a fresh tribunal, but it seems to us there is no challenge as to the facts that were found and we cannot see therefore any basis upon which it would be proper to remit this case for a further hearing. The errors which were made are errors of law which force us to the conclusion that the Tribunal's decision cannot stand.

For the reasons we have given it follows that the appeal must be allowed.