United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR T WEISSELBERG (of Counsel) Messrs Thomson Snell & Passmore Solicitors 3 Lonsdale Gardens Tunbridge Wells Kent TN1 1NX
For the Respondent	IN PERSON


 


JUDGE J HULL QC: This is an appeal to us by employers, a firm called Barkland Cleaning Ltd, who are engaged, among other things perhaps, in the activity of cleaning contracts with large stores and they appeal to us against a decision of the Industrial Tribunal sitting at Sheffield on 14 January 1997. Mr David, the Chairman, sat alone to hear the complaint.

The complaint was made by the Respondent to the appeal, Mr Julian Andrew Lamb. Mr Lamb had been employed at first as a Regional Operations Director, but then he suffered some minor demotion and became a Regional Operations Manager; he was first employed on 19 September 1994 by a different company.

Then there was a transfer of the undertaking on 27 April 1996 and that was a transfer, at any rate of parts of the undertaking and Mr Lamb, as is common ground, had his contract novated (to use the technical term) under the terms of the Transfer of Undertakings (Protection of Employment) Regulations 1981 and thus became the employee of the Appellant company. It was that transfer which led to the situation which has arisen.

Putting it very shortly Mr Lamb expected to be given a car by his new employers (I say given, of course, I mean provided with a car) for the purpose of his duties, as he had with his previous employers, and there was some discussion of that as well of other matters and on 29 April, two days after this handover of the undertaking, Mr Lamb went along to collect his car. He says that two of his colleagues, who were in the same position as he, were given cars which did correspond to their position, proper executive cars for a middle-ranking executive. He, himself, was offered an Astra Diesel Estate Car which, in Mr Lamb's view (which we are quite sure was bona fide) did not appear to him to be a car which was in any way commensurate with his position as Regional Operations Manager and he was so indignant at this (as I say, there is no question about his good faith) that he simply went home and from that day, until matters came to a head in May, he never did any work for the new company.

We were told there were various conversations. It was suggested that this Vauxhall Astra was all that the company had to offer, at any rate for the moment. We have been shown a letter which was written on the same day, 29 April by a Mrs Crockford, the Personnel Officer to the new employers. She wrote as follows:

"Following your conversation of today, with Mr Atherton, Director of Operations, I am now writing to request confirmation of your current situation.

I understand from Mr Atherton that you have indicated that you were not happy with the vehicle which was offered to you. However, as explained this is the only vehicle available.

By not attending at work you are in Breach of Contract. Should you not return to work the Company will take Disciplinary action against you. Any grievance relating to your Company vehicle should be pursued through the normal Grievance Procedure.

You are therefore requested to return to work. Mr Atherton is expecting you to ring him by 9 am, on Wednesday, 1st May to confirm that you will be recommencing your duties."

And Mr Lamb has told us that he believes he received this letter on 1 May. It quite plainly is, although not in any way in abusive terms or unpleasant terms, an ultimatum. It uses the expression "You are in Breach of Contract". It says "Mr Atherton (the Managing Director) is expecting you to ring him by 9 am, on Wednesday, 1st May to confirm that you will be recommencing your duties" and the explanation with regard to the vehicle was "this is the only vehicle available" and any man of business receiving a letter like that would, one feels, be quite clear that the new employers were, so to speak, "laying it on the line", were preparing to take action if, in fact, Mr Lamb did not resume his duties.

Before I go to the decision of the Industrial Tribunal we have been invited to look at the Service Agreement which was made by the predecessors of the employers on 29 May 1995 and that starts at page 31 of our papers. It is quite a long and elaborate agreement, clearly drafted by lawyers one would have thought, in the first place, or taken from a document drafted by lawyers. At page 34 we find, among the duties of the executive, it is provided:

"The Executive shall use his best endeavours to promote the interests of the Company and its Subsidiaries.

The Executive shall perform such duties and exercise such powers consistent with his office in relation to the conduct and management of the affairs of the Group as may from time to time be assigned to or vested in him by the Board"

And then, our attention has been particularly invited to subparagraph 4 on that page:

"The Executive shall (unless prevented by ill-health or accident) devote the whole of his time during normal business hours to the duties of the Appointment and such additional time as is necessary for the proper fulfilment of those duties."

Then there is provision, of course, about a large number of matters; his salary, his travelling expenses, his car. Sub-paragraph (1) at paragraph 6 says:

"The Company shall provide the Executive with a car appropriate to his status for his use in the performance of his duties ..."

And he is to be entitled to use that car for private purposes too. Then there are other provisions with regard to holidays; all sorts of matters; and at paragraph 15, which is at page 40 of our papers, there are provisions with regard to termination of the agreement. As Mr Weisselberg has observed, it is perhaps not surprising there is more about termination by the employers than termination by the employees, and in that way it is a usual type of agreement.

Sub-paragraph (1) at paragraph 15 provides:

" ... the Company or the Executive may terminate the Appointment by giving to the other at least 3 months' notice in writing."

Then there is power to pay money in lieu of notice and then there is an express provision of importance in sub-paragraph 4 (c) at page 41:

"If the Executive:

fails or neglects efficiently and diligently to discharge his duties or is guilty of any serious or repeated breach of his obligations under this agreement -

the Company may by written notice to the Director terminate the Appointment with immediate effect."

Those are the most important parts of the contract for present purposes.

Now we must turn to see the facts in the case. We must take those from the decision of the Chairman, who (as I say) sat alone to hear the matter and the facts in the case are the responsibility of the Industrial Tribunal. We can only entertain appeals on points of law. We have no jurisdiction whatever to find any facts ourselves or to go into the facts, or to criticise the findings of fact.

What we have to do is look at the findings of fact made by the Tribunal and see whether there are any errors of law. Here Mr Weisselberg says there are a number of errors of law and I will come to those, when I have referred to the Chairman's decision. He says that the facts are not in serious dispute. He describes how, at first, under his previous employers Mr Lamb had the use of a Volvo car. Then in effect he was demoted from Director to being Manager and he became entitled to a middle-management car, a Cavalier, Mondeo or Primera. But in fact he retained the Volvo motor car. Then the Chairman goes on to the events of the transfer and he says that Mr Lamb had some knowledge of the TUPE Regulations, that is the Transfer of Undertakings Regulations and he says that he was offered the Vauxhall Astra. The Chairman goes on:

"He [Mr Lamb] felt, rightly or wrongly, that if he accepted the Astra he would be bound by his acceptance and would find himself in a position of having acquiesced in a change to his contract. The applicant refused to accept the car and he arranged to be taken back to his home in Sheffield without a vehicle of any sort. It was unfortunate because by returning to his home without a vehicle had placed himself in a position where he was unable to continue to carry out his duties. He had no vehicle to use."

That is a most important finding. It is a finding by the Tribunal that Mr Lamb had deliberately placed himself in a position where he could not carry out his duties under the contract. It was his own act.

Then the Chairman goes through various events. He says that on 6 or 7 May, the employers arranged that one of the Mr Lamb's new colleagues, a Mr Whelan, should be given the title of Regional Manager and responsibility for the Applicant's part of the business. The Chairman finds that at that point the Respondents had decided that the Applicant would not be continuing his employment with them.

The Respondents went through a form of a disciplinary interview which took place, says the Chairman, on 14 May. The facts were discussed and the Applicant was told that the decision of the Respondents would be given in due course. That night the Respondents wrote a letter to the Applicant in which they said (page 50 of our bundle):

"You have not made yourself available for work since the transfer of your contract from your previous employer on April 29 1996. In relation to your grievance with company car provided for your use, you have declined, despite our requests, to follow the established Grievance Procedure as contained in your Contract of Employment.

Having established all the relevant facts (as agreed by you), a decision has been made that you be summarily dismissed without notice or payment in lieu of notice, in accordance with the L.I. Group Disciplinary Procedure. Your last day of service was April 18 1996."

He received that letter, says the Chairman, about two days later. The Chairman says that Mr Lamb had contended that his summary dismissal was not warranted by the circumstances. The employers, said the Chairman, said that the Applicant was in breach of his contract. They said that he withdrew his labour and that he should have accepted the Astra car under protest and then followed the grievance procedure. They said that summary dismissal on the 14th was justified.

Then the Chairman comes to his findings. He says:

"I find that the applicant was not entitled to say that he was constructively dismissed on 29 April. I think that the problem that arose then was relatively trivial and I think it is a great pity that the applicant did not accept the car under protest. If he had done so he would still be employed and no doubt he would have been able to persuade the respondents in due course to provide a proper motor vehicle."

This is a very important finding in this paragraph - or two important findings. First of all, the Applicant was not entitled to say that he was constructively dismissed. That means, although the Chairman does not spell it out, that whatever can be said about tendering a Vauxhall Astra car, it was not a breach which went to the root of the contract and so Mr Lamb was not entitled to say, "this entitles me to say that I have been constructively dismissed".

Then the rest of the paragraph appears to be at any rate a tentative acceptance by the Chairman, for the purposes perhaps only of his decision, that indeed, Mr Lamb was entitled to a better car. It was, he says, a relatively trivial matter and he thinks that if Mr Lamb had accepted the Astra, then he would have been able to persuade his employers to provide a proper car. In other words, it did not conform to the contract, but it was not a serious matter.

Such minor breaches of contract are probably a common incident of everyday life. They must be. So far as the employee is concerned, he may be late for work. He may on some occasion appear to be rather off-hand. He may fail to write a letter he has been told to write or matters of that sort. From the employee's point of view the employer may, on occasions, fail to provide all sorts of things that the employee is entitled to and then put matters right in due course. Those are all minor breaches. So that was the view of the Chairman, on the face of it a perfectly just view, one he was entitled to reach with regard to this failure to provide a better car.

Then the Chairman goes on:

"The events of 14 May seem to me to be the significant part of this case. I have already indicated that I think that the decision to dismiss the applicant was made before 14 May. I think that in the event the interview that took place on that day was something of a charade. I think the respondents already knew what the outcome was going to be and I find it extraordinary that they were not able to convey that message to the applicant at the time. As it was they wrote to him."

About that, there are several things to be said. The Chairman obviously had grounds for thinking that the decision had already been reached. Mr Whelan had been appointed to do the Applicant's job and that certainly might give rise to the inference that Mr Lamb was to be dismissed. With regard to his comment that it was rather extraordinary that the employers did not convey that message on 14 May, or perhaps he is referring back to the earlier time, 8 May, when they wrote - it was a term of the contract that the decision should be conveyed in writing and it is rather strange to see why the employers should be criticised for doing that, but there it is.

The employers were quite entitled to reach a decision, and to say that they would hear the employee before they gave effect to that decision.

Then the Chairman goes on, in paragraph 10:

"I find that the respondents were not justified in summarily dismissing the applicant. I do not have to consider questions of fairness because of course that is a concept which really concerns the unfair dismissal legislation which does not apply. But it seems to me that the respondents have not established that they were entitled to regard the applicant's conduct which came about by a mistake on his part, as a sufficient reason for summary dismissal. I find that the applicant was dismissed in breach of contract."

That is the centre of the appeal. Mr Weisselberg puts it like this. First of all, he says the Chairman was quite right to put considerations of fairness out of his mind because that belongs to a different part of the law, the law of unfair dismissal. But he says, as the Chairman was therefore proceeding to decide whether a breach of contract had occurred and, if so, what the result of that was, he should have referred to the contract. He should have said, what were Mr Lamb's contractual obligations? Was he in breach of those obligations? - and if he was in breach of those obligations, what remedies were available to the employer?

No doubt, of course, Chairmen of Industrial Tribunals, which are intended to proceed in a summary way, often do elide their reasoning to some extent, do go straight to the point without going through various steps, but we think the submission made by Mr Weisselberg in this context is right. The Chairman should have looked at the contract. It is quite impossible to say whether there has been a breach of contract until one looks at the contract. Then he should have said, however shortly, was there a breach of the term? - and if so, of which term? And then he should have said, what remedies were available to the employer? Not every breach of contract entitles the other party to say the contract is at an end. That is elementary.

The Chairman had already found that the breach, as it may well have been with regard to the car, certainly did not entitle Mr Lamb to say that the contract was at an end. But equally, he should have, in this case, looked to see whether there was a breach and then, having done that, said what remedies were available to the employer. Here, I have already referred to the vital terms which Mr Weisselberg asks us to look at. Here was a promise by Mr Lamb to devote the whole of his time to the duties of his appointment and such additional time as was necessary for the proper fulfilment of his duties. Here was a quite clear statement under "termination of employment" that, if the executive failed or neglected efficiently and diligently to discharge his duties or was guilty of any serious or repeated breach of his obligations under this agreement, then the employer was entitled summarily to end the contract.

On the face of it, that would be a mixed question, of course, of fact and law because the Industrial Tribunal Chairman would have to find the facts and here we think he did sufficiently find the facts. As Mr Lamb has confirmed to us, he was going to stay at home until he got the car, he was making his protest. He was, so far from attending to his duties, taking the undoubted risk of saying "I will not carry out my duties". He had put it out of his power, said the Chairman, to carry out his duties.

So he was undoubtedly saying that he would not be bound by the contract and here the contract made express provision for the situation and said that, in those circumstances, as a matter of contract the employers were entitled to terminate the contract. How could the Chairman, in those circumstances, say "I find that the Applicant was dismissed in breach of contract"? Mr Lamb has not told us how that might be, has not been able to show that the Chairman in those circumstances could say, "Yes. Here, Mr Lamb, for no particularly important reason, a relatively trivial reason, was refusing to carry out his contractual obligations. He was in an important position in the Company. He had executive responsibilities for a number of sites and yet, in spite of that, I find that he was dismissed in breach of contract. The employers were not entitled contractually to dismiss him".

We simply cannot see how the Chairman, as a matter of law, could say that and we are inclined to think that it was probably precisely for the reason on which Mr Weisselberg puts his finger, namely that the Chairman did not refer at this point to the contract, and look at the breach which he must have found was occurring in the circumstances and look at the employer's remedies for the breach. Of course, it goes without saying that the employer had a discretion in the matter. He might have held his hand still further. It may well be that Mr Weisselberg is right in saying that the Chairman had somewhat confused himself by looking at the question of fairness. He then left it again, but it may be that he was asking himself whether this was reasonable under the Employment Rights Act, as it now is, whether it was fair, and that affected his mind. But it is not up to us to say what was in the learned Chairman's mind.

We have looked to see whether there is any ground on which the Chairman could have reached the conclusion which he did. We have come to the conclusion that there is not. It is manifest here, on the findings of the learned Chairman, that the employers were entitled, summarily, to terminate the contract. Whether they did so was a matter for them, but in the absence of any reasons given we cannot, ourselves, think of any possible reason which can justify the conclusion that the dismissal was in breach of contract and, therefore, we have to say that the Chairman was manifestly wrong when he reached that finding. There is only one conclusion, on the findings of fact which he made, which he could reach and that was that the employers were entitled to end the contract. Whether they were justified as a matter of commonsense, good industrial relations, fairness or anything of that sort, did not arise and in those circumstances there were no two ways about it, that is a manifest error of law and in the circumstances, bearing in mind the findings of fact, we are undoubtedly entitled to substitute the only view which, in our opinion, as a matter of law is sustainable and that is that the employers were entitled to terminate the contract and were not in breach of contract in doing so.

In those circumstances the appeal must be allowed and the other questions which are raised on the appeal appear to us not to arise, and there is no need to remit the matter. We substitute a decision in favour of the Respondents and say that there was no breach of contact here and that none of the other complaints in Mr Lamb's application are sustained or sustainable and that is our decision. The appeal is allowed.