United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR JOHN MARTIN (Solicitor) Messrs Robert Muckle Solicitors Norham House 12 New Bridge Street West Newcastle-upon-Tyne NE1 8AS


 


JUDGE PETER CLARK: The applicant, Mr Winkworth, commenced employment with the employer, Presswork Metals Ltd, in January 1992. He started as a Grade 1 factory worker in the Press shop, where he acquired two written warnings for inadequate work rate, and was then transferred to the Heat Treatment department on 10th August 1992. Subsequently he was promoted to Grade 2.

His contractual working hours initially involved shift work. Each shift consisted of 7¾ hours. There were three shifts; 7.45 a.m.-4 p.m.; 3.45 p.m.-midnight; 11.45 p.m.-8 a.m.

In addition, the applicant and his colleagues had the opportunity to work non-contractual overtime, particularly on Sundays, when double-time was paid. Although not compulsory, employees were expected to co-operate by making themselves available for overtime. The applicant was happy to do so.

The employer commissioned an efficiency report which concluded that a cost saving of £73,000 could be made if a seven day 24 hours per day weekly system was introduced.

The employer decided to implement the report's recommendations. It decided to introduce a new shift pattern of 12 hour shifts, four days on and four days off in the Heat Treatment Department.

Initially the applicant was content with this proposal. He thought that he could work overtime elsewhere in the factory during his days off. However, that was not the case.

On 15th February he met with three members of management, Messrs Burns and Hedley and Mrs Ebdon. He was told that he would receive a weekly flat rate of £225 to include bonuses and shift allowances. His opportunities for overtime would be limited to his own department, and then only when a colleague was off sick. He would receive only single time overtime pay. He asked if he could be dismissed, and he was told not. If he was unhappy with the proposal an alternative position would be found for him in the factory.

On 17th February the applicant met Mr Burns coming off the night shift. He was angry, saying that he did not agree with the shift pattern "and as far as I am concerned you can sack me."

On Monday, 19th February the applicant attended for his afternoon shift at 2.30 p.m. He saw Mr Burns, and it was common ground that he told him that he had changed his mind. Mr Burns discussed the matter with Mrs Ebdon and they concluded that the applicant had shown a lack of commitment to the Heat Treatment Department and that the requirement to run a 12 hour shift made it undesirable to keep him there. Mr Burns communicated this view to the applicant.

On 20th February the applicant met with Mr Burns and Mrs Ebdon again. He reiterated that he was willing to accept the new shift pattern, but they would not accept his request to remain where he was.

From 23rd February to 4th March the applicant was off sick. On 5th March a decision was taken to transfer him back to the press shop. He was informed of that decision by Mr Burns and Mrs Ebdon on that day, and told that the transfer would take place on 18th March. He was asked to sign a transfer form but refused; instead he handed in a letter prepared by the local Citizens Advice Bureau, whom he had consulted, dated 29th February, requesting that he be allowed to remain in the Heat Treatment Department. The transfer form indicated that he was being offered a transfer from Grade 2 in the Heat Treatment Department to Grade 1 in the press shop.

On 7th March Mrs Ebdon and Mr Burns sought to persuade the applicant to transfer to the press shop but he maintained his refusal. On 11th March he handed Mr Burns a letter stating that he continued to work under protest, following a change in working hours and a reduction in wages.

On 14th March he left the employment and presented a complaint of unfair dismissal and breach of contract. That complaint was heard by the Newcastle Industrial Tribunal sitting on 16th and 29th August 1996.

We have set out the background from the Industrial Tribunal's findings of fact, they having preferred the evidence of the applicant to that of the employer's witnesses where a conflict existed.

The tribunal summarised the change in the applicant's terms and conditions involved in the proposed transfer to the press shop at Grade 1 in this way at paragraph 3(l) of their extended reasons dated 4th September 1996:

"(l) On the new shift system in heat treatment the applicant would be worse off in basic wage terms only when working nightshift and then by only slightly more than a pound but taking the overtime into account would have been significantly worse off. The new shift system would involve him in working another 2¾ hours per week. On transfer to the press shop the respondent claimed that the applicant's wage as a Grade 2 Operative would have been protected until the new pay rise came in on 31 March. This was never explained to the applicant. The new pay deal would have increased the Grade 1's workers from the basic wage of £143.50 to £173.00 per week and a shift allowance of a third extra for nightshift and a sixth for the morning shift. This was not explained to the applicant either. As far as he was concerned he was being returned to a department where he felt under threat of procedural steps for failure to produce, at a lower Grade and at a lower basic wage. He was refused reconsideration of his position. Having originally been given a deadline of 4.00 pm on Monday 19 February and having indicated on the previous Saturday that he would not accept the proposals as soon as he changed his mind and accepted the original proposals, he was told that he could not have them anymore. In basic wages and shift allowance terms even at the increased level after the pay increase at 31 March the applicant would be £7.73 worse off on a day shift £4.52 on an afternoon shift and £1.31 worse off on a night shift. The position as it would be understood by him was even worse since he had not been told about protection of his wages or the benefits of the increases that were due to take place."

Based on their findings of fact the tribunal considered whether the applicant had been constructively dismissed. They referred to the implied term of mutual trust and confidence contained in every contract of employment.

They found that that implied term had been breached by the employer in the following ways:

(1) In changing the shift pattern.

(2) In seeking to transfer him from one department to another against his will.

(3) In seeking to demote him from Grade 2 to Grade 1.

The Industrial Tribunal concluded in paragraph 7 of their reasons:

"... Of course the applicant's initial objection to the new shift pattern was the loss of overtime but for the respondent to down grade him and furthermore cut his basic pay after he had come round to accept the position can in our view only been seen as a fundamental breach of contract. He resigned in response to it and quite clearly did so promptly."

The tribunal found that he had been constructively dismissed and, in the absence of any prescribed reason for the dismissal being advanced by the employer, the dismissal was held to be unfair.

Against that decision the employer now appeals. The basis of the appeal argued by Mr Martin is that the Industrial Tribunal erred in finding that the applicant resigned in response to the breach as found. It is said that in cross-examination the applicant agreed that the real reason for his resignation was the withdrawal of overtime. Accordingly, submits Mr Martin, the claim must fail. It was not the fundamental breach which caused him to leave, it was the withdrawal of non-contractual overtime. See Walker v Josiah Wedgwood & Sons Ltd [1978] ICR 744 at 751H per Arnold J.

There is no doubt that the applicant was unhappy with the loss of overtime opportunities. However, on the tribunal's findings he had overcome that disappointment on reflection over the weekend of 17th-19th February. He returned to work that Monday willing to work the new shift system in the Heat Treatment Department. He was not permitted to do so. The employer wished to transfer him to the press shop and down-grade him. That proposal was capable of amounting to an anticipatory fundamental breach of the implied term of mutual trust and confidence. The Industrial Tribunal was entitled to so find. That is essentially a question of fact for the Industrial Tribunal. Pederson v Camden London Borough Council [1981] ICR 674. Mr Martin accepts that is so. So too, in our judgment, is the finding that the applicant resigned in response to that breach for the reasons given in paragraph 7 of their reasons. Absent perversity we are unable to interfere with that finding. Despite the answer apparently given by the applicant in cross-examination, we are not persuaded at this preliminary hearing that an arguable case of perversity is made out. Accordingly this appeal must be dismissed.