United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR R K SINGH (Of Counsel)
For the Respondents	MR R A SMITH (Representative) IRPC Hinton Ltd Stockwell House New Buildings Hinkley Leicestershire LE10 1HW


 


JUDGE HULL QC: This is an appeal to us by Mrs Jane Beeley from a decision of the Industrial Tribunal sitting at Bedford, under the Chairmanship of Mr Thomas with two Industrial Members. They sat on 11 and 18 September 1996 to hear the application of Mrs Beeley, who complained that she had been constructively dismissed, as she put it (she did not actually say unfair dismissal, but that is clearly the subject matter of the complaint).

Mrs Beeley had been employed since 11 June 1990 by the Respondents, London Sailplanes Ltd, at Dunstable. They are a small business, concerned with the repair of gliders (or sailplanes as high performance ones are known). Mrs Beeley had, throughout the six years or thereabouts of her employment, been employed as the Office Administrator dealing with accounts and books generally, and office administration.

In November 1995 there was a new general manager of this small business and he was concerned to improve efficiency. The story is told shortly and accurately by the Industrial Tribunal. I cannot do better than set out what they say so far as the facts are concerned. The Tribunal started by finding that Mrs Beeley was a valued employee and experienced and then said this in paragraph 2:

"(d) Mr Robin Bickers became the General Manager for London Sailplanes in November 1995 and part of his remit was to organise the business in a more efficient way and to bring working practices together to ensure uniformity across the board. He would have liked Mrs Beeley to commence work at 8.30 am and to work a regular 40 hour week. He had a meeting with Mrs Beeley on 12 February 1996. The record of that meeting is recorded in both the Applicant's and Respondent's bundles. The gist of the meeting was that as the Applicant was working more than 40 hours on a regular basis that the Applicant should consider working a 40 hour week commencing at 9 am and no longer do work at home. After some discussion Mrs Beeley advised Mr Bickers that because she had to take her daughter to school, she could not arrive at work prior to 9.30 am."

Again, one could not possibly criticise the lady for insisting on that point.

They go on to say:

"(e) There was a further meeting on 27 February 1996. At that meeting Mr Bickers gave the company's explanation for the request to change the working hours starting at 9 am particularly with regard to the business need for the telephone to be covered prior to 9.30 am thus freeing the workshop staff from having to answer it and citing the proposed plans for the expansion of the retail outlet. It was on that occasion that redundancy was first mentioned as a possible option.

(f) There was a further meeting on 21 March where Mrs Beeley agreed that the proposed increase in hours were necessary in principle . Mrs Beeley asked what the wage packet would be and the answer was that the wages were negotiable. At the end of that meeting the Applicant repeated that she would not be able to work the hours proposed.

(g) On 22 March the Applicant wrote to Mr Bickers stating that she was unable to work the new hours from 9 am to 5 pm or 5.30 pm on a regular basis.

(h) There was a further meeting on 25 March, the nature of the new revamped job was explained to Mrs Beeley particularly involving the expansion of the retail side. Again redundancy was mentioned as an alternative to taking up the new post and if the Applicant was not willing to take up the new post, then redundancy terms would be offered. The Applicant's own evidence to the Tribunal was that her understanding was that inevitably she would be out of a job at some stage in the near future and that she would get six weeks notice.

(i) The parties met again on 1 April 1996 when again the Applicant said that she was unable to work the increased hours and asked for details of the redundancy package. Mr Bickers confirmed that he was not formally giving notice of redundancy and that the Applicant should continue working normally until notice would be given."

They then refer to a letter of 4 April:

"(j) There is an important letter in the bundle of documents from Jane Beeley dated 4 April to Mr Bickers. The letter referred to the various memos mentioning the proposal to offer redundancy. The letter goes on to say this

"..... because of my family commitments I am unable to take up the new post and therefore confirm my acceptance for redundancy terms.

As I obviously need to urgently seek alternative employment I am requesting that you release me from employment as soon as possible. I understand I am entitled to a statement of my redundancy terms and should be grateful if you would please provide me with the terms of your redundancy package by close of business today."

The evidence Mrs Beeley gave to the Tribunal was that her understanding was at this stage that days and weeks were limited and she had to find something else. Mr Bickers had emphasised to the Applicant that notice was not formally being given because he wanted to get somebody else in to do the job and that he would need the Applicant to show the new incumbent the ropes. It is also clear to the Tribunal that the Applicant was not happy to assist in those circumstances as a certain amount of personal animosity had built up between the Applicant and Mr Bickers.

(k) There is another important letter in the bundle dated 9 April 1996 again from the Applicant to Mr Bickers which said this

"... - I refer to your memorandum dated 4 April 1996 and note that you are not ready to set the date from which my present job becomes redundant. It is now six weeks since you wrote to me on 28 February 1996 recording the fact that my present job would become redundant. Since then I have made it clear to you that I am unable to accept the new post and you have not offered me an acceptable alternative. You have however stated that redundancy terms would apply. The purpose of this letter is to confirm that I am willing to accept your memo dated 28 February 1996 as formal notice of your intention to make me redundant. On this basis notice expires 10 April 1996. I will consider working until Friday 12 April 1996 but not beyond that date..."

(l) Mrs Beeley told the Tribunal that she was fed up with the aggravation and the pressure being put on her to change her hours - she wanted out and in fact had arranged to start a new job at the same hourly rate the following Monday 15 April."...

The Industrial Tribunal record what in fact happened. She did end when she said she was going to end, on the Friday; they say:

"... Although the two days notice was inconvenient the company accepted the Applicant would leave on 12 April which did cause operational difficulties. However they paid the Applicant an ex gratia redundancy payment equivalent to what she would have received had she been made redundant. The post of Office Administrator was advertised at the end of April 1996."

They ask themselves the preliminary question, which of course they have to decide, before they can go on to consider whether there has been an unfair dismissal:

"4. WAS THE EMPLOYEE DISMISSED?

It is the Tribunal's unanimous view that the employee was not dismissed. We do not accept that as the Applicant tried to argue the memo of 28 February 1996 was a formal notice of termination of employment on the grounds of redundancy and that the notice therefore expired on 10 April 1996. Redundancy was discussed on 28 February between Mr Bickers and Jane Beeley as a possible option but nothing more. Even the Applicant's own letter of 4 April makes reference to the proposal to offer her redundancy terms arising from the memo dated 28 February."

That they derived of course from hearing the evidence about the numerous meetings which had taken place and looking at the memoranda and letters which accompanied them.

It still might have been open to the Industrial Tribunal to say "we think that this lady was being treated in an oppressive and unfair way" (if those had been the facts), "we think she was being bullied" or even if they had heard evidence to that effect "we think she was being tricked", something of that sort, so that she was being treated in an intolerable way and the employers were in fact dictating to her and insisting that the terms of her contract must alter. If they had found those as facts, and those facts were based on evidence, then that would of course have been a totally different situation. But on the face of it, as the Tribunal found, so far from anything like that happening, what was happening was that Mrs Beeley was being asked to change the terms of her employment. It might have been open to the employers to say "your contract says that you must work from 9.00 a.m. those are your hours of work", but they accepted that they were not going to proceed like that and indeed Mr Bickers, the Manager, said to Mrs Beeley "what we are offering you is really a new job and pay will be negotiable amongst other things". He said "there are so many new terms that it's a new job". Was that, in any way, a breach of contract? Was it itself a dismissal? They go on to consider that in paragraph 5:

"The Applicant claims constructive dismissal. In order to establish that she has been constructively dismissed she must show the following:-

(1) that her employer committed a serious breach of contract - this is known as a repudiatory breach, see Western Excavating (ECC) Ltd -v- Sharpe [1978] ICR 221. It is not enough to show merely that the employer has behaved unreasonably. The breach of contract may be anticipatory rather than an actual one even though no breach has yet occurred it is sufficient if the employer has indicated a clear intention not to fulfil the terms of the contract in the future.

(2) That she has left because of the breach.

(3) That she has not waived the breach, i.e. by not delaying the resignation too long."

The first proposition which they state is not criticised in any way, neither indeed are the other propositions. I should prefer for my part to say, first of all, that there must be such a breach as is outlined by the Industrial Tribunal and, secondly, that the employee has accepted that breach as terminating the contract: that is to say she has said, after a proper interval perhaps for considering it, "right, well you are trying to break the contract, or telling me that your are going to break the contract, and I am not having that, I am resigning." That, of course, would be an acceptance of the breach.

However, having set out the test, quite correctly, that there must be a breach of contract, anticipatory or otherwise, the Tribunal goes on as follows:

"6. The Applicant's letter of 9 April clearly states in the first paragraph that the company were not ready to set the date from which the present job became redundant. A warning of a possible redundancy is not the same as formal notice of dismissal. The whole tenure of the letter is that the Applicant was as she thought accepting redundancy and would accept holiday and redundancy pay and that her last date of service would be 12 April. The Applicant in effect jumped the gun and was premature in resigning and then trying to claim constructive dismissal. By her letter of 9 April she was happy to accept a redundancy payment and that is the equivalent of the amount that her ex employers actually paid her as an ex gratia payment. The Applicant was resigning on that basis in the secure knowledge that she had another job to go to commencing on 15 April - that is the reason why she resigned and not because of any breach of contract by the employer. On that basis there was a voluntary resignation by the Applicant and her claim for constructive dismissal therefore fails."

So, having asked themselves the right questions in paragraph 5, they go on to say that having considered it, there was no breach of contract by the employer and that was the question which they had to ask themselves.

Mr Singh, who was instructed very late in this case, and yet was able to prepare for us, albeit belatedly, a Skeleton Argument, puts the matter in two ways. First of all he says that the Industrial Tribunal should have had regard to the cases and in particular to Greenaway Harrison Ltd v Wiles in which he says it was held that the Industrial Tribunal was entitled to find that an intimation of a dismissal in the future amounted to grounds which the employee could accept as being a constructive repudiation of the contract and an anticipatory breach.

I do not need to go through that case in detail. An Industrial Tribunal found that Mrs Wiles had been constructively dismissed within the meaning of Section 55(2)(c) of the Employment Protection (Consolidation) Act. According to the Tribunal the employers had fundamentally broken the terms of the contract by a change of hours and it was not reasonable for her to continue working in those circumstances. Mr Singh particularly invites our attention to what is said in the report at paragraph 7. The Tribunal set out the question:

"... whether an employer is in breach of contract, and if so whether the breach is a fundamental one, are both questions of fact for the decision of the Tribunal,"...

They go on to say in paragraph 8:

"Mr Griffith-Jones also took a rather different point of some difficulty. He submitted that, on a proper analysis of the facts, there had been no threat to vary the contract of employment at all. What the employers did was to try to negotiate a new contract in substitution for the original one, and the only threat was to determine the original one. But that threat, argued Mr Griffith-Jones, was to terminate by service of a notice of termination, which the employers were legally entitled to give (albeit that it might give rise to an unfair dismissal claim). It did not involve or threaten any breach of contract, so that under the principle of the Western Excavating case there had been no anticipatory breach of contract at all."

Then Judge Hague QC giving the judgment of our Tribunal in paragraph 9 went on:

"This is a far-reaching submission. Most employment contracts provide for a relatively short notice of termination, so that if the submission is correct, an employer who wishes to make a fundamental alteration to the contract can avoid the possible effect of s.55(2)(c) simply by making a threat of notice under termination. It would also create an unfortunate anomaly. If the employee leaves in the face of that threat, there would be no dismissal, whether creative [I think he must mean constructive dismissal] or otherwise, and so no unfair dismissal claim. But if he waits until notice of termination is given, there will be a dismissal (even if the employee gives notice and leaves before the expiry of the notice: see s.55(3)), and so the employee can make an unfair dismissal claim.

10 We cannot accept Mr Griffith-Jones's submission. In our judgment, the submission involves stretching the principle of the Western Excavating case beyond the proper limits. The Court of Appeal in that case, and the courts and tribunals in the cases where that principle has been applied, did not have in mind the possibility of a notice of termination which might itself give rise to an unfair dismissal claim, and we consider that it is necessarily implicit in the application of the principle that the contract of employment is assumed to continue. If Mr Griffith-Jones's submission were correct, it would probably have provided a short (and often contrary) answer to many of the cases."

Now that is a case, which I must admit when I read it (after the invitation in Mr Singh's Skeleton Argument) made me wonder whether it could possibly be correct. We all doubt whether it can. When we look in Harvey on Industrial Relations Section D paragraph 253 the learned author says:

"It is now well established that in order to constitute a notice of dismissal the notice must specify a particular ascertainable date. Where the employer merely gives an advanced warning of dismissal to occur at some future date, this does not constitute a notice of dismissal: see the redundancy case of Morton Sundour Fabrics Ltd v Shaw (1966) 2 ITR 84 and Burton Group Ltd v Smith [1977] IRLR 351. Nor does the intimation of future termination amount to a repudiatory breach of contract entitling the employee to leave and claim a constructive dismissal under s 95(1) (Devon County Council v Cook [1977] IRLR 188 and Haseltine Lake & Co v Dowler [1981] IRLR 25, [1981] ICR 222). Nor is the position any different where the employee leaves in these circumstances after discussions with the employer (see L Lipton Ltd v Marlborough [1979] IRLR 179). A statement of intention to terminate the contract in the future does not evince any intention to break the contract: it is perfectly consistent with a lawful termination. Hence the reason why it cannot form the basis of a constructive dismissal claim. (A contrary approach was taken by the EAT in Greenaway Harrison v Wiles [1994] IRLR 380, when the tribunal held that the employee was dismissed after resigning in circumstances where the employer had threatened her with a lawful dismissal unless she accepted an adverse change in terms and conditions. The cases referred to above were not cited, however, and it is submitted that the decision is wrong on the authorities.)"...

We are inclined to think that that may very well be said. It does seem quite inconsistent, not merely with the other authorities, but with the whole philosophy on which Industrial Relations Law is based, namely, that an employer should consult with an employee as early and as frequently as is reasonable when there is a danger of redundancies, or when he wishes to urge an employee to enter into a consensual variation of the contract; and if the employer is frank and honest with the employee, why on earth not? The employer may be showing his cards well in advance and it may be seriously to his disadvantage, because employees may then start to leave before the redundancy situation, or whatever it may be, arises.

But the employer being encouraged to consult is not, in our view, to be criticised for consulting at an early stage. Nor do we think that the mere fact or possibility that dismissal, when it comes, may be held in due course to be unfair, affects the matter. There is a great difference between an anticipatory breach or any other breach of contract and an unfair dismissal. An unfair dismissal is not by itself a breach of contract. The fact is that Parliament has chosen to impose, on top of the contractual basis of contract, statutory requirements. It is not enough for an employer to say "I terminated the contract lawfully and properly in accordance with contract law", he must also, if he wishes to escape a finding of unfair dismissal, frequently show what the reason was, and that it was treated by him fairly and properly as a reason for dismissal (to shorten and paraphrase the statutes).

In those circumstances, we think that to confuse the possibility of an unfair dismissal with an anticipatory breach of contract is a serious error and we do not think that we are constrained by the case of Greenaway Harrison v Wiles to hold that this Tribunal was in any way mistaken in law in its approach to the case. We would note that Greenaway Harrison v Wiles was a case in which the Tribunal had to come to the conclusion, as a question of fact, that the employee was dismissed, albeit by means of an anticipatory breach of contract. This case is the reverse. The Tribunal held the opposite. So we think that that submission of Mr Singh's is, with respect, mistaken and insofar as it is necessary for us to do so, we say that we do not follow the decision of our own Tribunal in Greenaway Harrison v Wiles, but follow the other authorities which are referred to, for the reasons which we have endeavoured shortly to state.

The other submission made by Mr Singh is as follows. Mr Singh says that here it might well have been open to the Tribunal to reach the conclusion that there was indeed no dismissal but a resignation, but they simply do not go into the facts. The Tribunal has not reached the findings of fact, and in particular whether the conduct amounted to an anticipatory breach by the employer, in a proper way.

We have to see whether that submission can be supported. I have read the material findings of fact of the Tribunal. They seem to us to be fully stated. Of course the Tribunal does not state every single fact or everything that has been proved before them, they are not obliged to do that. What they are obliged to do is state the facts sufficiently to show the parties and to enable us to see the basis of the decision. Having set out the facts, it seems to us perfectly adequately and fairly, they then go on to say: was the employee dismissed? They find that there was not a dismissal and they then go on to say "well that does not finish the matter, we must consider whether there has been a constructive dismissal". They set out the essential requirement for a constructive dismissal - that the employer must have been guilty of conduct which amounts to an anticipatory breach of contract or an ordinary breach of contract. They go on to say in the next paragraph what their conclusion about that is: they say that there was not a dismissal. They say that she was happy to accept a redundancy payment. They say that she resigned. She resigned, and not because of any breach of contract by the employer.

Clearly their conclusion can only be based on the various interviews which they set out; the memorandum which they set out and considered and, of course, on their view of the evidence which was given to them, which appears not to have contained any suggestion of unpleasant or tricky behaviour, over-bearing behaviour, or anything like that, simply consultation with the employee; an explanation to Mrs Beeley of her employer's necessities and requirements; an invitation to her to discuss and consider the matter, and an offer for her to consider with plenty of time to do so; whether she would be prepared to enter into a new contract. It seems to us that the Tribunal has very adequately set out the facts and reached a conclusion which not only was open to them but appears to us to be, in the absence of the sort of evidence I have referred to, the only conclusion which they could reach on the facts. We wish to say absolutely nothing to discourage employers in such a situation, seeking to reorganise their business, seeking to be more efficient, from consulting freely with their employees at the earliest moment when they feel able to do so.

The other matter which we would note with regret, is the fact that Mr Singh was instructed so late. It seems to us that it behoves everybody concerned in these appeals to us, certainly our Tribunal depends on it, to see that Skeleton Arguments should be put in at the proper time and that any Counsel or other representative employed to argue the case should have proper time to do so, to consider the matter and to communicate, if necessary, with this Tribunal. We deprecate late returns or whatever it is that causes Counsel to be put in the position in which Mr Singh finds himself. We do not criticise Mr Singh in any way. We are very grateful to him for his assistance but we regret that he has not been instructed at the proper stage and been able to carry out all his duties in the way that he would have wished.