United Kingdom Employment Appeal Tribunal

BAILII case number: [1996] UKEAT 599_95_2002

Appeal No. EAT/599/95

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 20 February 1996

Before

HIS HONOUR JUDGE N BUTTER QC

MRS R CHAPMAN

MR W MORRIS

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DEBBAGE & TUBBY LTD          APPELLANTS

MR A W JONES          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MISS M LAZARUS

(of Counsel)

Messrs Morgan Jones and Pett

95 St George's Road

Great Yarmouth

NR30 2JR

For the Respondent MR P TOBIN

(Trade Union Officer)

UCATT

177 Abbeville Road

Clapham

London

SW4 9RL


 


JUDGE BUTTER QC: This is an appeal by the employers against a decision of the Industrial Tribunal held at Norwich on 13 February 1995. The decision was promulgated on 1 May 1995. The unanimous decision of the Tribunal was that the Applicant had been dismissed and that the dismissal was unfair.

Before the Tribunal the employee complained that he had been constructively dismissed within the meaning of Section 55(2)(c) of the 1978 Act, in that the employers had intended to make a substantial cut in his pay. The employers denied that the Applicant was constructively dismissed. They said that there had been no anticipatory breach or breach of contract on their part, in that there had only been proposals to reduce the pay and they say that the Applicant resigned of his own volition.

The Tribunal in its reasons correctly referred to Section 55 of the Act and also to the relevant provisions of Section 57.

The background to the case can be set out very shortly. The Applicant, the employee, was employed as from November 1982. He was a sealed unit producer. In 1991 he signed a new contract of employment which ran into some 20 pages, but under paragraph 19 of that contract, it was provided:

"19. Changes to your terms of employment

19.1 The Company reserves the right to make reasonable changes to any of your terms and conditions of employment.

19.2 You will be notified of minor changes of detail by way of a general notice to all employees and any such changes take effect from the date of the notice.

19.3 [Which is of greater importance] You will be given not less than one month's written notice of any significant changes which may be given by way of an individual notice or a general notice to all employees. Such changes will be deemed to be accepted unless you notify the Company of any objection in writing before the expiry of the notice period."

The employee gave evidence on his own behalf and a Mr Glover, an Accountant for the Company, in turn gave evidence before the Tribunal. The evidence was summarised in the extended reasons given by the Tribunal.

In April 1992 the employee was served with a notice which did have the effect of cutting his pay, which he accepted at that time, based on an assurance contained in the relevant letter which indicated that there would be a possibility of increases and that the rates would be reviewed in September 1992.

It appears that the rates were reviewed but not changed in September 1992. The Tribunal became primarily concerned with events which occurred early in 1994. According to their findings, there was a meeting with all of the workforce who were told, in general terms, about the state of the market and the Company's need to be competitive. There was a further meeting which is referred to in paragraph 11 of the decision and then, and this is an important question, paragraph 12 says:

"12 The applicant says there was a further individual meeting with him and that he was told in simple terms: `Take it or leave it' and that the proposals were not negotiable. He said that the word `intransigent' was used by Mr Glover in these meetings and that the applicant himself did not know what this word meant and went home and looked it up in the dictionary."

In paragraph 18 the Tribunal said:

"18 In so far as there is a conflict of evidence between the applicant and the respondent, and there is, we greatly prefer the evidence of the applicant."

In the following two paragraphs, which are very short, they spelt out in categorical terms why that was so.

It was said today that this Tribunal should not treat paragraph 12 as being a finding or, if it is, it is a finding which is flawed by reason of the fact that it appears that before the Tribunal the solicitor acting for the Company had omitted to cross-examine Mr Jones with regard to this meeting. At a late stage he asked for Mr Jones to be recalled so that he, the solicitor, could cross-examine him, but the Chairman did not allow this.

The Chairman had a discretion, which he exercised in the way that he did. If this meeting was of importance, as almost certainly it was, it may well be that it would have been better if he had exercised his discretion differently, but this Tribunal today is not willing to say that there was any breach of natural justice in relation to the Chairman exercising his discretion in the way that he did.

In passing we should say that we reject the suggestion that there was any breach of natural justice in respect of the way that the concluding speech for the solicitor before the Industrial Tribunal was dealt with by the Chairman and we should, in passing, also record the fact that the earlier allegations of bias against the Chairman have not been pursued before this Tribunal today.

I return to the reasons and to the matters set out in paragraph 13 which deals with a notice which was sent out by the Company on 11 April 1994. That is to be found at pages 56 and 57 of the bundle; it is unnecessary for me to refer to it in full. It says, at the foot of page 56: "The proposed changes to be enacted in accordance under Section 19.3.", referring back to the section of the contract of employment to which I referred earlier and then sets out certain so-called proposals.

The proposal of particular importance is "that the current `AVR' of £1.35 is proposed to be reduced to £1, this giving rise to a reduction of 25.9 of a per cent."

I pause to say that the lay members of the Industrial Tribunal and the lay members of the EAT have between them an immense amount of practical experience in relation to employer/employee relationships. It was clearly the view of the Tribunal below, and it is the view of the Tribunal here, that although expressed in the notice of 11 April to be simply proposals, they were in effect decisions which were being announced by the Company. It is true that we were told that at a later stage (it seems after the resignation of the Applicant) the Company was persuaded to alter the rate to a reduction of £1.15, an aspect which is dealt with in paragraph 34 of the decision. This itself was a significant reduction but in the view of the Tribunal the notice to which I have referred was much more by way of an ultimatum, as distinct from merely an indication that this is the time for free negotiations to take place.

A criticism is made before this Tribunal today that in relation to paragraph 15 and others, the Tribunal below appears to have paid no consideration as to whether there was, in fact, a breach since it is said on behalf of the Company that all that was happening was that the Company was implementing Section 19 to which I referred earlier.

Reliance is placed upon the case of Haseltine Lake & Co v Dowler [1981] IRLR 25. I need not burden the length of this judgment by referring to the headnote or, indeed, by reading out paragraphs 14 to 17 to which we were helpfully referred. We have read those passages and others and taken them into account.

The effect of the Tribunal's decision below seems to us to involve this. The Tribunal was, we believe, entitled on the facts and evidence before it, to decide that in reality what the Company did was to involve an inevitable breach of contract because they were imposing a reduction which was moreover an unreasonable reduction. The employee was being told not "now is the time for negotiation and discussion", but in effect, "take it or else". The fact that the Company after the resignation was persuaded to alter the figures to some extent does not detract from the overall position which it seems to us did exist here, that the employee was, in truth, being given an ultimatum.

We have considered the various other points which have been raised and are grateful to Miss Lazarus for her clear and helpful presentation of the case, but we do not believe there to be a substance in them, with respect, and in the end it is the unanimous view of this Tribunal that we are satisfied that the Industrial Tribunal was entitled to reach the decision that it did and that it did not misapply the law.

Taking all matters into account, we reach the conclusion accordingly, that this appeal fails and must be dismissed.