United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR RAOUL DOWNEY (of Counsel) Instructed by: Mr K C Smith Messrs Kingsford Stacey Blackwell Solicitors 14 Old Square Lincoln's Inn London WC2A 3UB


 


MR JUSTICE MORISON (PRESIDENT): The purpose of this hearing is to determine whether there is an arguable point of law to be considered at a full hearing of the EAT in a Notice of Appeal which the London Borough of Brent have lodged against an adverse decision of an Industrial Tribunal which was held at London (North), which was reduced to writing and sent to the parties on 19th May 1998. The unanimous decision of the Industrial Tribunal was that the applicant, Ms Killick, a former employee of the Borough, had been unfairly dismissed.

It was constructive dismissal case and therefore it was appropriate as happened that the applicant should give her evidence in this case first. To some extent the facts were not substantially in dispute. The applicant was employed as Director of the Contractor Business Unit known as "Brent Homebuyers". She took this important post on 14th February 1994 with a fixed-term contract for four years, terminable by three months' notice on either side, and she was paid a salary of £40,000 per annum to reflect the responsibilities in her employment. She resigned on 2nd August 1996.

In her IT1 she had made a number of specific complaints about the way she had been treated, in her view, by her employers. She had listed them under five specific headings. The tribunal said this:

"2. The Applicant's original complaint listed five issues including lack of resources, lack of training, criticism from and behaviour of councillors, the disciplinary investigation into the Business Unit's finance manager, and the conduct of the grievance investigation against Ms Killick. At the conclusion of Ms Killick's evidence, the Tribunal gave an indication that there was probably insufficient evidence to support a constructive dismissal in respect of the first three issues, and it was agreed by the Applicant and her trade union representative that the Tribunal should concentrate on the other two issues. Nevertheless the Tribunal has been aware of a number of difficulties apparently faced by Ms Killick in her efforts to manage her unit effectively and efficiently."

Thus the focus of attention of the tribunal's decision was very much on the last two matters. No complaint is made about their decision to act in that way.

The problem that she had in her employment stemmed from the fact that she did not consider that she required a personal assistant. The personal assistant concerned came from the ethnic minorities. It was her response to the suggestion that she was an unnecessary employee to make an accusation against the applicant that she was acting out of racial motivation. The applicant was also experiencing problems with her finance manager who also was of a different racial origin to herself. They made informal complaints about their treatment to a Miss Ward, who was the Service Development Manager, and responsible for appraising Ms Killick's performance in her duties. The applicant also discussed her problems with these two particular individuals with Miss Ward, but not on a formal basis.

In early 1996 the applicant discussed with Miss Ward both the redundancy of her personal assistant and also the possibility of taking disciplinary action against the finance manager. Her view about the finance manager's capability was reinforced by the routine audit which had been undertaken in February 1996. On 9th March, the finance manager was informed by the applicant that an investigation into her work was to be conducted prior to possible formal disciplinary procedures being undertaken. Meanwhile, at the end of the financial year the Compliance Support Unit of the Council, being anxious to strike a balance in Brent Homebuyers accounts, took over audit in that connection. That audit was carried out by somebody who was also from the ethnic minorities. He visited the Unit at a time when the applicant was not there. On the following morning, that is a Saturday, he was observed to be removing material from Ms Killick's office. Somebody telephoned Ms Killick to tell her that this was so, so she went round to see what was happening and was told by the Compliance Unit officers that they were acting with management authority.

The next thing that happened was that the investigation into the finance manager's capabilities was put on hold and formal complaints of race discrimination against the applicant were received by the Chief Executive from both the finance manager and the personal assistant. What happened was that the Council instigated procedures for dealing with the grievances which had been raised. A Miss Royer was appointed as investigating officer; and secondly, a decision was taken that Ms Killick should be seconded to the Commissioning Unit while this matter was under investigation. She was told on her return to work on 29th April, having been away on holiday and then off sick, of the decision to second her. It was her case before the tribunal that during the period of secondment she appeared to be being excluded from the normal lines of communication.

On 30th May, Miss Royer produced a report confirming that her conclusion that there was no evidence of race discrimination, but it went on to deal with necessary improvements in Ms Killick's "management style". Ms Killick, not surprisingly, seriously objected to references to her 'management style', as apart from anything else, as we understand it, Ms Royer was not at a more senior grade than herself, and it fell, in Ms Killick's view, outside the remit which she had been given.

On 4th June the Compliance Unit manager produced a report which referred to matters well outside the remit of a compliance unit of a local authority. It dealt with the alleged unequal treatment that staff had been receiving. It was no business of the maker of that report to be making those comments, although it was thought to be justified at the tribunal on the basis that he was merely reciting background history.

The Industrial Tribunal in paragraph 5, having found the facts in a composite way, concluded that it was legitimate for the complaint against the finance manager to be investigated. It was legitimate for the Compliance Unit to take documents from the Homebuyers unit on 30th March, although in doing so it created a conflict between the needs of the audit and the needs of the disciplinary investigation. They rejected her complaint that there had been fault in the procedures relating to the way the grievance was investigated. They said that it was appropriate for Miss Royer to have been appointed to investigate the allegations of race discrimination and that the secondment of Ms Killick on her return to work was also appropriate. However, they concluded that in respect of Miss Royer's report they found that had it confined itself to the findings on race discrimination it would have been supportive of Ms Killick and that would have been an end of the matter. However, the tribunal went on to say:

"In our view Miss Royer overstepped the mark in dealing with "management style" in the way in which she did. The references to management style were in our view significantly out of order. If anything, it exacerbated Ms Killick's view that she was being subjected to one investigation after another. We make this finding particularly in the light of the fact that Mrs Balchandari was concurrently doing much the same piece of work in relation to management style in her capacity as the acting manager of the Homebuyers' Unit."

The tribunal then said that the Compliance Unit manager's introduction to his compliance report on 6th June was completely outside his terms of reference and was re-opening issues which Ms Killick thought had been resolved. The tribunal considered his introduction to have been highly prejudicial and likely to damage any supportive work being undertaken by Miss Wards and another person to allow Ms Killick to continue in her post.

The tribunal then found in relation to her dismissal letter of 12th June was that it was as a direct result of an accumulation of investigations culminating in the Compliance Unit's report of 6th June, and that report was the last straw which led her to believe she could no longer stay at Brent.

In paragraph 6 and 7 they direct themselves as to the correct question to be asked as to whether there is a breach justifying an allegation of constructive dismissal. There can be no criticism of their directions in paragraph 6. As we read paragraph 7, they apply their minds to the question whether the two complaints which they have found proved fall into the category of complaint which justifies a finding that there is a fundamental breach of contract. They say that on the basis of those two definitions, that is the definitions in Western Excavating (ECC) Ltd v Sharp [1978] QB 761 and Malik v BCCI [1997] ICR 606, taken together, the tribunal came to the conclusion that although the events up to and including the end of May would not have amounted to such a fundamental breach, the report written by Miss Royer where it refers to 'management style' and the Compliance Unit manager's report of 5th June, amount to conduct, which viewed objectively, seriously damaged the trust between employer and employee.

The tribunal then went on to consider whether when the applicant resigned, the applicant had done enough to demonstrate that she was complaining of conduct with which she could not be expected to put up with. They find in paragraph 8:

"In the present case there is evidence that Ms Killick made strong protests about Miss Royer's report within a few days of receiving it. She also had a meeting with Miss Ward when she received [the Compliance Unit manager's] report protesting about its contents. Her letter of resignation followed. Those assertions were subsequently reaffirmed and enlarged upon in the internal memo that she sent to Miss Ward on 1 August immediately preceding her last day at work, but certainly whilst she was still in employment."

In paragraph 10 the tribunal said that:

"... There was then no exit interview although she requested one and she therefore set out at some length on 1 August, before her employment ended, a very long and detailed narrative which we find to be a sufficient assertion of the grounds for her going."

The tribunal then had to deal with a suggestion which had been made on the Council's behalf that the true reason why she had left was to go to work for another local authority. She had applied for a post with Harrow. Harrow having heard about the race discrimination allegations then hesitated about offering her a job, and thus the Council argued that the real reason why she left was not because of any activities of their employees, but rather because she was interested in taking up another job. They particularly relied on the fact that when Harrow wobbled as to whether to offer her alternative employment, she explored the possibility with Brent that she should be retained by them. The tribunal made these findings:

"9. ... We do not agree with the Respondents' assertion that this was simply a move to further her career, but we consider it a response to what she considered to be an impossible position. Had she resigned at any stage prior to the end of May we would not however have considered that resignation to be a response to circumstances likely to damage the trust necessary in the employer/employee relationship. However, we have already found that the events at the beginning of June warranted that resignation on the grounds of significant damage to the relationship then.

10 Ms Killick was then put in an impossible position when Harrow queried the race allegations, and we are not surprised that at that stage she investigated the possibility of remaining at Brent. We do not think that that was a considered decision indicating that she had accepted the earlier breach, but rather an indication of her anxieties about her future career and remuneration. ..."

We can add that it apparently was the assertion of Ms Killick at the Industrial Tribunal that she was eventually employed at a post which carried a salary some £17,000 short of what she being paid by Brent. No doubt the tribunal were looking at Brent's contention in that context.

On this appeal it had been argued that there are four grounds, essentially, to justify a further hearing. First of all, it is said that although the tribunal may have correctly recited the law in paragraph 6 of their decision as to whether there is a fundamental breach, that is the objective test, they have not applied that.

It seems to us that that criticism is wholly unjustified. Paragraph 6 and paragraph 7 are an accurate reflection both of the correct legal test and the application of that test. It is of course quite true that they have concerned themselves with the effect that the alleged conduct was having upon Ms Killick. They were bound to do that, because they would be bound to have to investigate whether there was a causative link between the alleged mistreatment and the resignation. In order to see whether there was a causative link, they would have been bound to have asked themselves why it was that Ms Killick left, and they would be bound to ask themselves in that context what effect the alleged conduct had had upon her. But that is a separate question from the objective determination of whether there is a breach, and we see no grounds for the assertion that the tribunal have not applied the test correctly.

Secondly it is said, alternatively the findings of the tribunal were manifestly perverse. Having effectively rejected many of the complaints, the two which were outstanding could not sensibly be regarded as so serious as to have irreparably damaged the relationship between employer and employee.

It seems to us that that is a quite unfair criticism of the Industrial Tribunal's careful decision. There is no sign in our view that this decision was one which no reasonable Industrial Tribunal could have arrived at having regard to their findings that they have made. What has happened in a nutshell in this case, is that Ms Killick was attempting to manage her department, but that the tables were turned on her in a way which was wholly unfair. That is the essence of the tribunal's finding as we understand it, and that is demonstrated by the fact that Miss Royer whose was there to investigate the race allegations which she completely dismissed, went on to make damaging comments in an inappropriate way about the applicant's management style, and the Compliance Unit manager's remarks about the racial matter which was not his business and which should have been a dead matter by the time he came to write his report as a result of Miss Royer's findings , she having been specifically charged to investigate that issue.

Thirdly, he says, and I think this is very much the same point, that having rejected the substantial complaints made in her IT1, it was not appropriate for them to then seek to justify her complaint of unfair dismissal by reference to those findings which they had made, that there was no evidence to justify their finding that it was two matters which they found proved which provoked her into going. Again, we regard that as unfair. There are likely to be in any constructive dismissal case a number of reasons which provoke the employee into leaving. Sometimes not all the alleged breaches of contract will be proved and in such cases the tribunal will always have to ask itself whether what was proved was sufficiently substantial such as to justify the employee walking out; and secondly, whether it was those matters alone, the employee would have walked out or did walk out. It seems to us that the tribunal have carried out that exercise conspicuously carefully in this case.

Finally, it is said that the tribunal erred in concluding that she, when leaving, had demonstrated that she was leaving because of the way she had been treated. It seems to us that that is an unsustainable contention in the light of the findings to which we have referred. The tribunal were entitled to conclude that although the letter made no express reference to the reasons why she was going, everybody at Brent who ought to know would have known why she was going, having regard to the discussions that she had and the memorandum which she wrote.

In relation to the separate contention that there was no sensible causative link, this is another version of the same submission that effectively the tribunal have sought to justify their finding that she was entitled to leave on the basis of just two of the allegations which she had been making and that they, so to speak, were trying to find that she left because of those two matters rather than because of the matters which had been unproved. For the reasons I have attempted to give, we regard contention as unfair.

This was a five day hearing before the Industrial Tribunal. The respondents were represented by Counsel. The applicant was represented by a trade union. The tribunal were the arbiters of fact. They were entitled, provided they applied the law correctly, to reach the conclusions which they did. We are not persuaded that there is any arguable point which should go to a full hearing. Indeed, we were of the view that if this had been a full hearing, and we have say Mr Downey was given a lengthy opportunity to put forward his point of view, this is not a case where we would have invited the representative for the respondent to have responded to this appeal because we believe it is unarguable. The appeal will therefore be dismissed.