United Kingdom Employment Appeal Tribunal

BAILII case number: [1996] UKEAT 41_95_1701

Appeal No. EAT/41/95

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 17 January 1996

HIS HONOUR JUDGE P CLARK

MRS M E SUNDERLAND JP

MR N O WILLIS

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BROMLEY HOSPITALS NHS TRUST          APPELLANTS

MISS H MAIR          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MR Q BARRY

Solicitor

Messrs Donne Mileham & Haddock

42/46 Frederick Place

Brighton

East Sussex

BN1 1AT

For the Respondent MR J WATERS

(of Counsel)

Messrs Armstrong & Co

Solicitors

2 Dartmouth Road

Forest Hill

London

SE23 3XU


 


JUDGE CLARK: This is an employer's appeal against the unanimous finding of the London South Industrial Tribunal that the Respondent employee, Miss Mair had been unfairly dismissed. The questions of remedies was adjourned, although the Industrial Tribunal gave a preliminary indication that, subject to argument, it had in mind a further finding of 60 per cent contribution to dismissal by the Respondent. The Tribunal's extended reasons for their decision are dated 2 December 1994, following a hearing lasting just over two days.

The essential facts, as found by the Tribunal are these. Miss Mair was continuously employed by the Trust and its predecessors from 30 August 1976 until 5 February 1994 when, the Tribunal found, she was constructively dismissed by the Appellant. At that time she was employed as a State Enrolled Nurse Grade E at Bromley Hospital.

On 18 November 1993 the Respondent was working on Dewey Ward at the hospital together with Nurse Patel and Staff Nurse Adams. Putting the matter shortly an incident occurred involving the Respondent and Nurse Patel. Following that incident Miss Mair directed verbal racial abuse at Nurse Patel in the presence of at least one patient.

Thereafter the Respondent was suspended and a disciplinary investigation was carried out by Miss Farr, the Nurse Manager for Surgery. It is unnecessary to repeat the detail of that procedure which is fully set out in the Tribunal's reasons. Suffice it to say that no criticism is made of the way in which the Appellant's conduct procedure was followed.

The upshot was that Miss Farr concluded that the Respondent had been guilty of gross misconduct. She then considered the question of penalty. Miss Farr decided that although the Respondent's conduct was worthy of dismissal she would stop short of actual dismissal but impose instead the following penalties; downgrading from Grade E to Grade C, involving a reduction in earnings; a final written warning to last for 24 months; the Respondent was to undertake courses, she would be taken off nights and finally, she would be put on a fixed term contract for a period of six months.

The Respondent never returned to work after those penalties were imposed. She tendered her resignation on 9 December 1993, left the employment and commenced proceedings claiming constructive unfair dismissal.

The Tribunal expressed its conclusions in paragraphs 27-30 of its reasons in this way:

"27. In our judgment, the Respondent [employer] did commit a fundamental breach of contract in seeking to impose unilaterally new terms and conditions in the form of a fixed term contract in a manner not permitted under the original contract. The Applicant did not unduly delay her response, giving notice by her letter of 9 December 1993 in reply to the Respondent's letter of 3 December 1993. The notice expired on 5 January 1994, which was the effective date of termination. The Applicant was constructively dismissed.

28. The Tribunal accepts that the Burchell test outlined in paragraph 26 above was satisfied by the Respondent in regard to Miss Mair's conduct and that the Respondent would have been entitled to dismiss her had it chosen to do so in a proper manner. In any event, the reason for the constructive dismissal was conduct.

29. However, the Tribunal finds that having regard to the criteria in section 57(3) and in all the circumstances, the Respondent did not act reasonably in constructively dismissing the Applicant. The Respondent decided not to dismiss but chose unilaterally to impose on Miss Mair a fixed term contract combined with a significant reduction in rank and earnings. Miss Farr admitted that the issue in her mind was performance, and that she was trying to take steps to ensure that at the end of six months it would be easier to dismiss Miss Mair if she did not meet objectives.

30. The Tribunal finds that notwithstanding the safeguards under employment law which would still have applied to the Applicant under a fixed term contract, the unilateral imposition of such a contract was unfair and unreasonable in all circumstances. The Respondent had no power under the contract unilaterally to impose another contract of that kind. Further, the Respondent effectively dismissed the Applicant when it had said it was not going to do so. The Tribunal finds that the Applicant was unfairly dismissed."

In this appeal Mr Barry, on behalf of the Appellant, takes two principle points. First, he says that the Tribunal was wrong in law to find that the imposition of a fixed term contract constituted a repudiatory breach of contract. Second, he submits that even if the Respondent was constructively dismissed, the Tribunal having found that the tests of reasonableness were satisfied in relation to the reason found, namely conduct, the Tribunal erred in nevertheless holding that the manner of dismissal, that is the imposition of the fixed term contract, converted an otherwise fair dismissal into an unfair dismissal. He contends that the intention to impose a lesser penalty than actual dismissal cannot make what is fair unfair.

For the Respondent, Mr Waters relies upon the reasoning of the Tribunal. He submits that the Tribunal was entitled to reach the conclusion that the Respondent had been constructively dismissed, and this is not a finding with which this Tribunal can properly interfere. As to the finding that the dismissal was unfair, he points to the last sentence in paragraph 29 of the reasons and contends that what the Tribunal found was that the real reason for imposing the penalty of a fixed term contract was in relation to the Respondent's performance and not her conduct. This was an inappropriate penalty amounting, as it did to a repudiatory breach of contract in circumstances where the employer had expressly disavowed an intention to dismiss for misconduct.

That submission depends upon reading into the Tribunal's finding at paragraph 28, the "stated" reason for dismissal was misconduct, whereas, implicitly the Tribunal found that the reason for the constructive dismissal related to the Respondent's performance.

We should say at this stage that that is not our reading of the decision. We think, by reference to the letter of dismissal dated 3 December 1993 and the finding in paragraph 29 of the reasons, that the Tribunal was merely pointing out that the fixed term contract was imposed with a view to monitoring future performance. It was not related to past performance.

In our judgment the correct analysis of the Industrial Tribunal's conclusions is as follows:

(1) The unilateral imposition of a fixed term contract by the Appellants amounted to a fundamental breach of the existing contract of employment. The Respondent accepted that repudiation without delay. She was constructively dismissed

(2) The reason for dismissal related to the employee's conduct

(3) The employer had satisfied the threefold Burchell test, that is it had a reasonable belief based on reasonable grounds following a reasonable investigation that the Respondent was guilty of misconduct

(4) The Appellants would have been entitled to dismiss the Respondent had it chosen to do so in a proper manner. We take that to mean that but for the manner of dismissal such a dismissal fell within the band of responses open to a reasonable employer. As we observed earlier, no procedural irregularities occurred in this case in relation to dismissal related to the Respondent's conduct

(5) However, the dismissal was unfair because it involved the unilateral imposition of a fixed term contract and this was unfair and unreasonable. Further, the Appellant effectively dismissed the Respondent when it said it was not going to do so.

Dealing first with the submission that the Tribunal erred in concluding that the Respondent had been constructively dismissed, in our judgment it was open to the Tribunal to find that the unilateral imposition of a fixed term to the existing contract of employment had no contractual authority. It follows that it was a breach of the contract. The fact that there is no material difference between termination of a contract of employment with or without notice, and expiry of a fixed term contract by effluxion of time for the purposes of claiming the protection of unfair dismissal legislation, is beside the point.

The Industrial Tribunal having found as a matter of fact that there was a breach, and that it went to the root of the contract, it is not open to this Tribunal to interfere with that conclusion.

We turn now to Mr Barry's second submission. It is now well established that a constructive dismissal may be a fair dismissal. See Savoia v Chiltern Herb Farms Ltd [1982] IRLR 66, and the cases there cited. That conclusion arises from a proper analysis of the 1978 Act. The Tribunal must ask itself three main questions:

(1) Was there a dismissal under Section 55(2)(a) or Section 55(2)(c) of the Act

(2) If so, what was the reason for dismissal, and is that a prescribed reason within Section 57(1)(b) of (2) of the Act?

(3) If a prescribed reason is made out by the employer, did the employer act reasonably in treating that reason as a sufficient reason for dismissal under Section 57(3)?

When so analysed it is clear that the questions to whether or not the employer is in repudiatory breach of contract is relevant only to the first question of dismissal. Once dismissal is established, the question then is what was the reason for dismissal, and if a prescribed reason, did the employer act reasonably in treating that reason as a sufficient reason for dismissal. The mechanics of the dismissal are not material at this third stage of the enquiry.

Here, the Tribunal found that the employee had been constructively dismissed. It then went on to find that the reason for dismissal related to the Respondent's conduct, and that dismissal for that reason satisfied the reasonableness test. Where it fell into error was then to return to the manner of dismissal, instead of focusing on the reason for dismissal and treat the former as a ground for finding that the dismissal was unfair.

In these circumstances the appeal must be allowed, and in the light of the Tribunal's clear findings we substitute a finding of fair dismissal.