United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 422_94_1209

Appeal No. EAT/422/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 12 September 1994

HIS HONOUR JUDGE J HICKS QC

MS S R CORBY

MR J C RAMSAY

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GOLDWELL (HAIR COSMETICS) LTD          APPELLANTS

MR N LAMBERT          RESPONDENT

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Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised


 


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APPEARANCES

For the Appellants MR MARTYN WEST

(Personnel Consultant)

Peninsula Business Services Ltd

2nd Floor

Stamford House

361-365 Chapel Street

Manchester M3 5JY


 


JUDGE HICKS QC: This is an appeal by the employers Goldwell (Hair Cosmetics) Ltd against two parts of the decision of the Industrial Tribunal in dealing with an application for unfair dismissal by the Applicant, the present Respondent, Mr Lambert, who was employed by the Appellants as an area sales manager. He had been employed by the Appellants since 1974 and had been in his post as area manager from January 1987. The case put forward by him was one of constructive dismissal, because he had admittedly submitted his own resignation at the end of September 1992. His complaint was that he did so in circumstances where he was entitled to resign because of breaches by the employers and it is the Appellants' case, and is indeed clear from the reasons of the Industrial Tribunal, that the major complaint upon which he founded that accusation concerned events at the end of June 1992 when, as he put it, he was suspended as area sales manager and required to perform the duties of an ordinary salesman.

It was also his case that the conditions imposed, as he said, by the employers at that stage for his re-applying for the post of area sales manager were such that he was not genuinely likely to be considered for that reappointment, and substantially the Industrial Tribunal accepted the way he put it in this respect.

The Industrial Tribunal gave full reasons and at paragraph 7 of those reasons set out, under some 23 subparagraphs, very full findings of fact including their decisions on matters where there had been a conflict of evidence, in some of which they preferred the evidence of the Appellant and some the evidence called on behalf of the employers. We are impressed by the care and completeness with which the Tribunal dealt with those matters.

The first ground of appeal is that the Industrial Tribunal "erred in law in finding that the Respondent had terminated his contract in circumstances where he was entitled to do so by reason of the [employers]' conduct (although the Notice actually reads "employees")", but although it is expressed in those general terms in paragraph 3(a) of the Notice of Appeal the substance concentrates on one point only, namely the delay between most of the precipitating events at the end of June and the Applicant's resignation at the end of September. Having dealt with the facts in paragraph 7 the Industrial Tribunal deal with that point at the end of paragraph 11 of their Reasons in these terms:

"We were also satisfied that in waiting for the period of three months, in the circumstances of this case, he had not waited too long and that he had not affirmed the breach."

Those words are indeed brief but they are against the background of very full findings of fact and the Industrial Tribunal clearly had all those facts in mind. They also had in mind, so far as the law on this point is concerned, the leading case of Western Excavation EEC Ltd v Sharp [1978] ICR 221, which they refer to in paragraph 9 of their reasons in these terms:

"The test to be applied ... is what is known as the "contract test" and which was defined by Lord Denning MR, as he then was in the leading case of Western Excavating (ECC) Ltd v Sharp [1978] ICR 221 when he said:- ..."

After dealing with the nature of the conduct on the part of the employer which justifies the employee in treating himself as discharged and resigning the quotation from Lord Denning's judgment goes on:-

"The employee is entitled in those circumstances to leave at the instant without giving any notice at all or, alternatively, he may give notice and say he is leaving at the end of the notice... he must make up his mind soon after the conduct of which he complains: for, if he continues for any length of time without leaving, he will lose his right to treat himself as discharged. He will be regarded as having elected to affirm the contract."

Mr West on behalf of the Appellants does not dispute that that does accurately set out the law. He contends that despite their reference to that statement and despite their careful and full setting out of the facts of the case, the Tribunal cannot have applied that test - or at least of course at this stage, the preliminary hearing, he says it is arguable that they have not done so, and he has referred us briefly to two authorities mentioned in the Notice of Appeal. One is the case of Bashir v Brillo Manufacturing Company [1979] IRLR 295. That was a case in which the employee continued to work for a period of 2¹/₂ months and the Industrial Tribunal held that to be too long a period to entitle him to rely on constructive dismissal but this Tribunal, on appeal, held that the Industrial Tribunal had erred in law in failing to take into account that he did so under protest. That was not of course a decision about the facts of the case; it was a decision, as are all decisions of this Tribunal, on a point of law, but the important point for present purposes, it seems to us, is that it was a decision in favour of the Applicant, and what this Tribunal there said in general terms about possible variations on the facts of that particular case (which was what Mr West relied on) cannot be authority in our view in favour of an employer for the purposes of the present appeal. It was not part of the ratio decidendi but an obiter dictum.

The second case to which Mr West referred us is Grant v Brown & Root Manpower Services Limited in the Scottish Division of this Tribunal. It is unreported and we have simply the passage quoted in the Grounds of Appeal, which in our view does not carry matters any further.

We have come to the conclusion that the Industrial Tribunal made a careful judgment in which they applied the correct law. There is no ground shown or, in our view, arguable, for saying that they erred in any way in applying the law to the facts and the appeal on that ground is dismissed.

The second ground goes to the assessment of compensation and again is confined to a narrow point. The Tribunal made an award assessed at £20,580, reduced to the maximum of £10,000. In arriving at the figure of £20,580 they had applied a reduction of 40% for the contribution of the Applicant's conduct to his dismissal. None of those calculations is challenged. What is challenged is the way in which they dealt with the issue whether had the Applicant not been constructively dismissed he would be likely to have lost his post during the period between constructive dismissal and the hearing in the Industrial Tribunal on the ground of redundancy. That was a matter canvassed before the Industrial Tribunal. They dealt with it in paragraph 4(iv) of their Reasons in these terms:

"We were further satisfied on the balance of probabilities that if the applicant had not resigned from his employment with the respondents in late 1992 when he had been constructively dismissed he would not have been dismissed by the respondents on account of redundancy between that date and today."

What Mr West relies on is evidence which he says was before the Industrial Tribunal that at a meeting after the Applicant's resignation, in October of 1992, he was offered reinstatement in his previous post as area sales manager but indicated that he did not now wish to accept that post, he wished to have one of two alternative posts, and Mr West says there was evidence that both of those posts disappeared by reason of redundancy within a comparatively short period thereafter.

It is not entirely clear to us as to how this is intended to be put by way of appeal. It seems to us that there are two possible ways of putting it. The first is the way in which Mr West, as we understood it, first put it before us, which treats the matter as simply one of fact and causation: that had Mr Lambert been given one of these two posts he would have lost it by redundancy and therefore there is no loss. That in our view is not an arguable point, because what one must postulate for the purposes of compensation is the situation which would have obtained had there been no constructive dismissal. Constructive dismissal does not consist merely in Mr Lambert's resignation, it consists in the whole state of affairs which has been held by the Industrial Tribunal to be constructive dismissal, of which a prime element is the breach on the part of the employers which entitled Mr Lambert to resign. Had that breach not occurred - had he not been demoted and had all the other events not occurred of which he complained and which gave rise to his resignation - then the meeting in October 1992 would not have taken place; the question of the alternative posts so far as the evidence goes need never have arisen, and it therefore seems to us that that is simply approaching the whole basis on which compensation is assessed from the wrong standpoint.

The alternative way of putting it, which Mr West says was argued before the Industrial Tribunal, but which I think he felt some difficulty about pursuing until I raised the question, is that of mitigation. On that basis the question is whether the Applicant acted reasonably in the circumstances which obtained in October 1992. In our view that is not arguable either for two reasons; one is that it was plainly (I think Mr West accepts) not known to him, the Applicant, that these two posts were liable to early termination for reasons of redundancy, and secondly it appears that in the case of at least one of them it was known, as Mr West told us, to the employers but not revealed to the employee, and we do not therefore see how any argument that Mr Lambert unreasonably failed to mitigate his loss can be advanced and we therefore find that no arguable ground is put forward for the appeal against compensation and that that appeal also should be dismissed.