United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MISS C M COX (Representative) Southwark Law Centre 14-16 Hanover Park London SE15 5HG
For the 1st Respondents For the 2nd Respondents	MR R WHITE (of Counsel) The Solicitor London Borough of Southwark South House 30-32 Peckham Road London SE5 8UB MR P BURLOW (Representative)


 


MR JUSTICE KIRKWOOD: This is an appeal by an employee against the decision on a preliminary point of a Chairman of the London (South) Industrial Tribunal sitting alone on 16th May 1996. The Chairman found that at the date of termination of his employment the appellant, Mr Jones, was not employed by the London Borough of Southwark, but was employed by Botes Building Ltd and was not dismissed by Botes Building Ltd. The Chairman's extended reasons were sent to the parties on 6th June 1996.

The circumstances surrounding the case concern a transfer of an undertaking. Mr Jones was employed by the London Borough of Southwark as a bricklayer from 10th November 1986. His last employment by the Council was at its Acorn Neighbourhood Office. In June 1995 the Council was compulsory required to tender for building services. Its bid failed. From June 1995 it was in negotiation with Botes Building Ltd for the transfer to that Company of building services within the district.

On 11th August 1995, Mr Jones was informed by letter that he had been identified as an employee whose job would be transferred to an outside contractor. Mr Jones did not want that. He said that he had been selected because of his trade union duties as a shop steward. He lodged a grievance under Council's grievance procedure. He said:

"I feel I have been victimised as a shop steward in being chosen for TUPE in Acorn. I have never been shown how the point system worked where I was selected. I have never even seen the results of the interview. As a steward I have been called upon daily by the members of the unions to carry out my duties as a steward. I feel this is the real reason I have been selected."

The grievance procedure said that there should be a hearing within five day, although the Council had the right to vary the time scale if there was a valid reason. The hearing did not take place until 24th October 1995. Mr Jones got no explanation for the delay. The grievance was not upheld.

On that same day, 24th October, Mr Jones had an interview with Botes Building Ltd. Mr Jones was told that his terms and conditions of employment with the Council would be honoured by the Company. The transfer date, though imminent, had not yet been settled, so Mr Jones was not told of the transfer date. Mr Jones did not say that he did not want to be transferred, or that he did not want to work for the Company, so the Company assumed that his employment would indeed be transferred.

On 30th October 1995, Mr Jones applied for his grievance to move to stage 2. On 31st October at 7.00 p.m. a letter was delivered to Mr Jones at his home. It was a letter from the Council. It said:

"Following the awards of contracts by the housing department of the repairs and maintenance contract 1995 - 1998 in respect of Botes Building Ltd commencing 1 November 1995.

This letter confirms that you are to be transferred along with the contract to Botes Building Ltd on 1 November 1995 in compliance with the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE).

Accordingly you last day of employment with Southwark Direct Construction will be 31 October 1995, upon which date you will be required to return to your line manager or council equipment or any job tickets you have in your possession.

As of 1 November you will be required to report to Botes Ltd at 8.00 am and you are to report to ...

In regards to the transfer I advised that you are not obliged by law to transfer to Botes Building Ltd the position however is that if you object to the transfer the movement of the contracts will operate so as to terminate your contract of employment with Southwark Council, this means your employment with the Council will end as if you had resigned. If you do not wish to transfer to Botes Ltd may I take this opportunity to thank you for your service with this council and which you well in your service with your new employer."

It is to be noted that that letter was delivered after the end of normal workings hours on 31st October 1995 and just five hours before the transfer was to take effect.

Mr Jones did not report to work for Botes on 1st November 1995 or at any time thereafter. He made no communication whatever to either the Council or Botes about his decision in that regard.

A few days later, Mr Jones received a letter from the Council dated 31st October 1995. In the letter the Council said:

"The following outlines the terms and conditions of employment and their sources for employees from Southwark Direct preserved under TUPE ... when they transferred to another contractor ... the terms and conditions in Southwark Council's personnel procedures manual apply to Southwark Direct employees. I have attached documents relating to the main terms and conditions of employment as follows ...

The employee complaints procedure ...

If you have any queries on this matter please do not hesitate to contact me."

On 1st November 1995, a further letter was sent to Mr Jones by the Council which reached him subsequently:

"Following your transfer of employment ... taking effect midnight 31 October 1995 to Botes Building Ltd. I have to advise you that if you wish to proceed with the final stage of your grievance it must be taken up with your new employer, relevant documentation from your stage 1 hearing is to be forwarded to Botes.

I must again reiterate that if you choose not to take up employment with Botes Building Ltd it will be viewed by the Council that you have resigned."

S.54 of the Employment Protection (Consolidation) Act 1978 provides:

"(1) In every employment to which this section applies every employee shall have the right not to be unfairly dismissed by his employer."

The definition of dismissal is contained in s.55:

"(2) ... an employee shall be treated as dismissed by his employer if, ...

...

(c) the employee terminates that contract, with or without notice, in circumstances such that he is entitled to terminate it without notice by reason of the employer's conduct."

That is what is known as constructive dismissal.

The provisions of the Transfer of Undertakings (Protection of Employment) Regulations 1981, are set out in Regulation 5, deal with the effect of relevant transfer on contracts of employment, and the like. In Regulation 5(4A):

"[The above paragraphs] shall not operate to transfer his contract of employment and the rights, powers, duties and liabilities under or in connection with it if the employee informs the transferor or the transferee that he objects to becoming employed by the transferee."

And (4B) says:

"Where an employee so objects the transfer of the undertaking or part in which he is employed shall operate so as to terminate his contract of employment with the transferor but he shall not be treated, for any purpose, as having been dismissed by the transferor."

The Industrial Tribunal found:

(1) that at the relevant time for the purpose of the legislation was 31st October 1995; that the transfer took place at midnight 31st October 1995;

(2) that Mr Jones did not exercise his right to end the contract under Regulation 5(4A);

(3) that from midnight on 31st October, Mr Jones ceased to be an employee of the Council and became an employee of Botes;

(4) Mr Jones's case that the Company committed a fundamental breach of the contract of employment by failing to complete the second stage of the grievance procedure before the transfer took place was not justified on the particular facts of the case.

(5) The Chairman found as facts that Mr Jones, having remained silent, did nothing to prevent the transfer taking place; and that Botes had an intention of continuing with the grievance procedure;

(6) that Mr Jones was not dismissed by the Council in the meaning of s.55(2)(c) of the 1978 Act for those reasons.

In summary Mr Jones took no steps under Regulation 5(4A); he raised no point and he did nothing at all. He simply failed to go to work the following day, 1st November 1995. The Chairman also found that Mr Jones was not dismissed by Botes within the meaning of that same section or at all. His failure to go to work amounted to a resignation.

The Notice of Appeal dated 5th July 1996, relies upon the ground that the Chairman made a finding of fact that Mr Jones resigned on 1st November 1995, rather than 30th October 1995 as Mr Jones contended, without hearing any evidence. Leave was subsequently given to add by amendment a second ground. That was that the Chairman had no power to decide the issue of fact while sitting alone. That second ground has subsequently been abandoned.

In his skeleton argument, the appellant says:

"2. The Appellant who was the Applicant in these proceedings complained of unfair dismissal, victimisation and dismissal for Trade Union activities against the First Respondent. In summary, the Applicant's claim for unfair dismissal was that he had been forced to resign from the first Respondent's employment on the evening of the 31st October 1995, when it became clear that the First Respondents were not going to deal with his outstanding grievance in line with his contract of employment, prior to his employment being transferred to the Second Respondents."

The complaint in the skeleton argument is essentially as in the Notice of Appeal that findings of fact were made which did not have a foundation in evidence.

In the course of the extended reasons, the Chairman rehearsed in summary form the submission made on behalf of Mr Jones in these terms:

"16. ... He does not accept his contract transferred to Botes. He submitted that the London Borough of Southwark had fundamentally breached a term or terms of his contract when they failed to complete stage 2 of the grievance procedure before the transfer to Botes Ltd was effected. The breach caused him to resign forthwith. He did not write a letter of resignation, but this is irrelevant firstly, because he did not, in law, have to formally express his resignation in response to the breach, for it be effective; and secondly, because it was recognised by the first Respondent that if he did not report to work with Botes and/or he objected to the transfer he would be deemed to have resigned from the Council."

Mr Jones's case, is, we understand, that having moved the grievance on to stage 2 on 30th October 1995, the receipt of 7.00 p.m. on 31st October 1995 of the letter which said nothing whatever about his grievance, a grievance which had obviously not been dealt with by then, and a letter which gave him the very first notice he had the date of transfer, amounted to a breach of his contractual rights. Further, he knew, because the letter told him, that if he did nothing he would be treated as having resigned. So that in order to effect his resignation in response to what he perceived to be a breach of contract, there was nothing further that he need to do. His case is that he did nothing and thus resigned, because his grievance had not and was not being dealt with and that that was a circumstance in which he was entitled to terminate the contract of employment without notice by reasons of the employer's conduct.

In considering this appeal, which is based, essentially, on the absence of sufficient evidence, we have been troubled by the point that whilst the Chairman in fact heard no oral evidence. She was not invited to do so. This was a preliminary hearing to decide as a preliminary matter the question of dismissal. To proceed in that way is not uncommon in unfair dismissal cases. But there are obvious hazards in cases of constructive dismissal when the employee's reasons for terminating the contract may not appear sufficiently or at all from documents alone. In a case such as this the absence of written communication from the employee, even disregarding the brevity of the time scale, is no cause for wonder. Furthermore, the complaint made on this appeal, is not of failure to hear oral evidence as such. It is that in the absence of such evidence, there was no or no sufficient evidential basis for the findings of fact that were actually made.

Mr Jones's case as contained in the summary of the submission on his behalf to which we have referred, raised these questions. Was the failure to address phase 2 of the grievance procedure before transfer a breach of contract? In that regard there may be relevance not only to the extraordinary lateness of the letter of 31st October 1995, but particularly to its total silence as to the outstanding grievance matter. If there was a breach of contract, was that conduct entitling Mr Jones to terminate the contract, for example by not going to work on 1st November, without notice? If it was such conduct, did Mr Jones act upon it in such a way as to fall within the provisions of s.55 of the Employment Protection (Consolidation) Act 1978?

In the way in which the Chairman summarised the case for Mr Jones, evidential gaps are immediately manifest. The findings of the Chairman on this aspect were in these terms:

"16. The Applicant submitted that a fundamental breach of the term on his contract had occurred when the first Respondent failed to complete both stages of the grievance procedure before the transfer was effected. I accept the submissions of the Applicant that an employee need not formally resign from an employer even in response to a fundamental breach of contract. However, each case turns on its own facts, and in the present case I find that the Applicant, having remained silent, did nothing to prevent the transfer from taking effect, and I also took into consideration that the second Respondent had every intention of continuing with his grievance procedure."

In that, the question of whether there was a breach of contract, is not, so far as we can discern, addressed at all, nor was the nature or quality of it. In saying that Mr Jones remained silent, the Chairman seems to address the absence of objection under Regulation 5(4A) of the 1981 Regulations. She does not address the point made or at least inferred by the Council itself in its letters, that non-attendance at Botes place of work would amount to resignation from employment by the Council rather than dismissal.

The Chairman then took into consideration Botes Building's intentions with regard to the grievance procedure, of which, incidentally, Mr Jones had not been informed. If, as appears to be the case, the Chairman was there addressing whether Mr Jones was entitled to terminate without notice, that consideration is plainly irrelevant.

It seems to us that that unsatisfactory and confused response to the questions posed by Mr Jones case, can only flow from the insufficiency of evidence upon which properly to address and answer those questions. Accordingly, Mr Jones's case was not dealt in the way it should have been dealt with at all and this decision cannot stand.

The case must be remitted for hearing afresh by a newly constituted tribunal. In view of what has occurred in this case, that should plainly be a tribunal of three persons. The issue in the case is whether or not Mr Jones was constructively dismissed on 31st October 1995. Nothing in the case that occurred after midnight on 31st October 1995, so far as it relates to Botes Buildings is of any relevance to that. The tribunal has already found that Mr Jones was not dismissed by Botes. If his employment was transferred to them he resigned from it. That decision stands. Although Counsel for Southwark has indicated that if Southwark were eventually found to have liability that authority may wish to proceed somehow against Botes, we can see, as at present advised, no possible basis for that; but, in particular, we see no reason why Botes Buildings need to play any further part in these proceedings.

An application on behalf of the London Borough of Southwark for leave to appeal to the Court of Appeal refused.