United Kingdom Employment Appeal Tribunal

BAILII case number: [1996] UKEAT 1048_95_0902

Appeal No. EAT/1048/95

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 9 February 1996

Before

THE HONOURABLE MR JUSTICE MUMMERY (P)

MR E HAMMOND OBE

MISS A MACKIE OBE

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WADHAM KENNING MOTOR GROUP LTD          APPELLANTS

MRS M WELLS          RESPONDENT

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Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised


 


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APPEARANCES

For the Appellants MR G WARWICK

(of Counsel)

Messrs Kidd Rapinet

(Solicitors)


 


MR JUSTICE MUMMERY: This is a preliminary hearing of an appeal by Wadham Kenning Motor Group Ltd, car dealers, against the decision of the Industrial Tribunal heard at London (North) on 24 August 1995.

The Tribunal explained, in extended reasons notified to the parties on 5 September 1995, why they had unanimously decided that the Applicant, Mrs Wells, had been unfairly dismissed. They made no determination on the further claim of sex discrimination, as that was withdrawn by Mrs Wells. Wadham Kenning Motor Group Ltd appealed. Their Notice of Appeal was served on 25 September.

The case was set down for a preliminary ex-parte hearing to determine whether the Notice of Appeal raised an arguable question of law for decision on the appeal. This Tribunal only has jurisdiction in appeals on questions of law arising in decisions of Industrial Tribunals or in proceedings before them.

Mr Warwick presented a thorough argument, with the assistance of his skeleton submissions for which we are grateful. He identified what he says are reasonably arguable points, which deserve a full airing at a later hearing of this Tribunal.

The case brought by Mrs Wells, in her Originating Application presented on 6 October 1993, was one of constructive dismissal from her position as sales manager in relation to new and used cars. The Tribunal reached these conclusions in paragraphs 12, 13 and 14 of the decision:

"12 We are aware that for there to be a dismissal in these circumstances there has to be a fundamental breach of contract going to the root of the contract and of such nature that it cannot be expected for the Applicant to continue her work.

13. We find from these facts that the Respondents, through Mr Graham and Mr Newbury, were in breach of the Applicant's contract, that is in breach of the implied term of trust and confidence in that they systematically undermined the Applicant's authority in her job and humiliated her in a way that we can only conclude that they had hoped that she would resign. This conclusion is [and then the decision reads `enforced' - we think (to make sense) that is a typing error] re-enforced by the fact that after her resignation they did not take active steps to persuade her to remain but immediately cleared her desk and advertised for a new sales manager. In fact, it appears that the sales manager who was appointed was someone who was already known to Mr Graham.

14. In those circumstances we find that this was a dismissal and that the Respondents acted unreasonably in dismissing the Applicant in the way that they did within Section 57(3) of the Employment Protection (Consolidation) Act 1978 and therefore this dismissal is unfair."

In his Notice of Appeal and his submissions Mr Warwick argued that he would seek to support the appeal on two broad grounds. His main submission was that the findings of fact made by the Industrial Tribunal did not justify the conclusion of constructive dismissal. The Tribunal made two legal errors. The first was that, in paragraph 13 of the decision, they impermissibly relied on facts which followed the event relied on as the constructive dismissal.

He put the matter this way. Paragraph 13 opens "We find from these facts that there was a breach of contract". These facts must be the preceding facts. For reasons we will examine in a moment, Mr Warwick argued that that conclusion did not follow from the preceding facts.

The Tribunal then went on, in the second sentence of paragraph 13, to have regard to events which occurred after the resignation, those events being no "active steps to persuade her to remain, but immediately cleared her desk and advertised for a new sales manager" and appointing such manager someone already known to Mr Graham. He says that logically, if an employment is ended by constructive dismissal, later behaviour on the part of the employer cannot affect the position. He gives an example of an employee who resigns because she intends to take up a new job elsewhere. At the moment of her resignation she has no complaint whatsoever about her employer. The day after her resignation she calls at her former place of work to collect her belongings. Her boss then tells her that he hates her and attacks her. That display of violence by the employer could not turn what had been a true resignation into a dismissal, constructive or otherwise. In support of that he referred to passages in the decision of the Employment Appeal Tribunal in The Gaelic Oil Co Ltd v Hamilton [1977] IRLR 27.

We accept as correct the general proposition of Mr Warwick that, at the date when the employee leaves, there is either a constructive dismissal or there is not. If there is no constructive dismissal at the time of resignation and leaving, what happens subsequently cannot make one. We do not find it necessary, however, to examine the authorities or to examine the precise formulation of this submission in any further detail, because we are satisfied that the Tribunal, in paragraph 13, when read as a whole and in the context of the preceding and succeeding paragraphs, were not relying on subsequent events as a constructive dismissal.

What they found in the first sentence of paragraph 13 was that there was a breach of the implied term of trust and confidence. They found as a fact that the employers, through Mr Graham and Mr Newbury, were systematically undermining Mrs Wells's authority and humiliating her in a way which they concluded was done in the hope that she would resign. When they referred to what happened after the resignation, it was not for the purposes for finding a later constructive dismissal. It was for the purpose of reinforcing the conclusion that they had formed about the behaviour of the employer before Mrs Wells's "resignation". There is no error of law in that approach.

There is no error in a Tribunal reaching a conclusion of fact on a "resignation" (eg constructive dismissal by the employers) and then reinforcing the conclusion by looking at what happened subsequently. It would be an error of law to rely on what happened subsequent to the "resignation" as constituting, on its own, a constructive dismissal.

On that ground we find there was no error of law. The point in the Notice of Appeal under the heading "Post-Resignation" is not reasonably arguable. It says:

"It is denied that events post resignation can amount in law to a repudiation justifying someone ending her contract. Once someone has resigned then the contract is ended. ..."

We have already explained why that is correct as a proposition. But it does not help the Appellants in this case, since the Tribunal were not relying on the post-resignation events as constituting a repudiation. They were only relying on them as reinforcements of findings of fact on earlier events.

The second ground of appeal was that the findings of fact in the opening words of paragraph 13, do not in fact lead to the conclusion of constructive dismissal in the form of breach of the implied term of trust and confidence. On this part of the case, the broad analysis that Mr Warwick put to us can be summarised in this way: there was no suggestion that the employers had broken any express term. This was a case of a personality clash between Mrs Wells and Mr Graham, her immediate boss. As a result of those clashes Mrs Wells felt that her authority was being undermined. She had worries about her financial position. There was a scene, in particular, between her and Mr Graham in which Mr Graham raised his voice. Mrs Wells over-reacted and resigned. It was not a case of repudiation which would justify Mrs Wells in treating the contract of employment as terminated by her employer.

Mr Warwick submitted that it is necessary to examine closely the Industrial Tribunal findings to see whether Mrs Wells had discharged the burden of proving that she was constructively dismissed. In order to do that, it is necessary to look at the process of reasoning and the materials on which the Tribunal based their conclusion. As support for this approach he relied on the decision of the Court of Appeal in Lewis v Motorworld Garages Ltd [1986] ICR 157.

On the basis of that approach he referred to seven individual matters in the Industrial Tribunal decision and submitted that, on analysis, the Tribunal's reasons either showed that there was no breach of an express or implied term of contract or, alternatively, that there were contradictions in their reasoning.

Mr Warwick took us step by step through those seven items in order to show that there was no repudiation. We do not propose, for the purposes of this judgment, to go through all of them in the detail that Mr Warwick has explained them for this reason. We do not agree that the points under these individual headings assist him in establishing an error of law. He referred to what is said in the extended reasons, particularly in the findings of fact in paragraph 3 (subparagraphs 2, 3, 4 and 5) and in paragraphs 4 and 5. He dealt with individual items on which the Tribunal made findings; the change of procedure for hire purchase checking; the policies in relation to the signing of cheques; Mrs Wells's new remuneration package; the car change for Mrs Wells; the decoration of the showroom; the cleaning of cars; the appointment of Mr McKenzie as a salesman, and the events of 6 August 1993 described in paragraph 6 of the decision.

Our view is that, reading this decision as a whole, the Tribunal were faced with interpreting the situation which had arisen between Mrs Wells, Mr Graham and Mr Newbury. They not only made findings of fact about detailed points, they also had (and we regard this as important) the benefit of hearing evidence given by Mr Graham, Mr Wells and Mr Newbury about the way in which various changes, consequent on changes of company policy, were implemented. It was on the basis of the individual findings of fact, of their cumulative effect and of the Tribunal's assessment of Mr Graham, Mrs Wells and Mr Newbury that they came to the conclusion in paragraph 13 that the treatment of Mrs Wells was a systematic undermining of her authority in her job, a humiliation of her and a breach of the implied term of trust and confidence. It is not said by Mr Warwick that the Tribunal could not find overall a breach of the implied term of trust and confidence. He sought to dispute the overall conclusion on the basis of the individual findings of fact.

In our view, the approach in the Court of Appeal case in Lewis v Motorworld Garages Ltd should not lead to an over-analytical approach to the question "Was there a constructive dismissal?". There was no error of law and no inconsistency with the approach in the Motorworld Garages case in the Tribunal, standing back, after they had heard the evidence, seen and heard the witnesses give evidence and made findings of fact, and asking themselves, "Did this behaviour constitute a breach of the implied term of trust and confidence?". It was open to them to form the view on what is set out earlier in the decision that this was systematic undermining of authority and humiliation of Mrs Wells. Take just two passages from the decision.

First, in paragraph 4, it is clear that the Tribunal concentrated on the parts of the evidence that dealt with the way the changes were implemented, in particular, the lack of consultation about these changes by Mr Graham with Mrs Wells. That led them to say, at the end of paragraph 4, that the Applicant felt embarrassed and humiliated by the way in which changes were made without consulting her.

Secondly, in paragraph 5, the Tribunal in referring to changes to the decoration of the showroom and the cleaning of cars, said:

"5 ... these areas had been part of the Applicant's responsibility and he [Mr Graham] chose to make these changes without consultation and on days when the Applicant appears not to have been on the premises. These changes were fairly minor in themselves but the cumulative effect was that the Applicant, understandably, felt that her authority was being undermined. ..."

The emphasis in both of those paragraphs is on lack of consultation with Mrs Wells about the changes and to the cumulative effect of what might otherwise be regarded as minor matters.

In our view, there is no realistic prospect of the Appellant successfully persuading this Tribunal at a full hearing that paragraph 13 is flawed by an error of legal principle or approach to this problem. It would not be appropriate at a full hearing for the Tribunal, in a case such as this, to direct the production of the Chairman's notes of evidence in order to enable the Appellant to go point by point through the various findings of fact in paragraphs 3, 4 and 5, and then to argue either that they were not justified by the evidence or, that, if they were, the findings of fact did not themselves justify a finding of repudiation.

This Appeal Tribunal has to take a broad brush, in constructive dismissal cases, to what is essentially a question of fact. Unless the Tribunal have misdirected themselves about the correct legal test for a constructive dismissal, this Tribunal should be cautious to allow an appeal on grounds involving detailed analysis of the evidence and facts.

The Tribunal gave themselves a correct direction in paragraph 12 on constructive dismissal. In our view, they came to a conclusion in paragraphs 13 and 14, which was open to them on the facts found in the earlier part of the decision.

For those reasons, there is no reasonably arguable point of law in this case. We dismiss the appeal.