United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR J FAIRBAIRN (Solicitor) Denton Hall Solicitors Regency Court 206-208 Upper Fifth Street Milton Keynes MK9 2HR
For the Respondents	MR J CROSFILL (of Counsel) Messrs Eversheds Solicitors Senator House 85 Queen Victoria Street London EC4V 4JL


 


JUDGE HICKS QC:

1. The appellant, Mrs Young, had been employed by the respondent employers, John D Wood & Co, since June 1988. At the dates relevant for the purposes of her complaint and this appeal she was described as a lettings negotiator/office manager. She was in fact working at Curzon Street as a lettings negotiator, but had been told by the employers in December 1996 that they were opening a new office in Kensington Church Street and wanted her to manage it.
2. She was then approached by other prospective employers - 'head-hunted' is the word used in the tribunal's reasons - and there was some negotiating in which her current employers and the prospective new employers made competing offers, but on 28th April 1997 she decided to stay with John D Wood & Co after she had had a promise, and inferentially and plainly because she had a promise, which was put in writing on 19th May 1997 and which guaranteed her a salary of £30,000 from 1st May until Kensington Church Street Office opened and she became manager of that office, when the remuneration situation would change. The tribunal found as a fact that that was a binding contract that she should become the office manager of the Kensington Church Street office.
3. However, on 18th July 1997 she was told that the respondent's business had been sold to Hambros Countrywide, in fact about a month earlier, and that other changes were taking place. On 5th November 1997 she was told that, as part of the changes following on the take-over, first, the Curzon Street office was closing, secondly, there was to be no new office in Kensington Church Street and, thirdly, that there was a possibility of her being relocated at Holland Park or Chelsea or Wandsworth.
4. There was a telephone conversation with a Mr Phillips, apparently on 11th November, although the reasons do not give the exact date, at which he, as the tribunal found, offered her the Wandsworth job, to which her response was to ask for it to be put in writing. It does not appear from the reasons that it ever was put in writing and, as we understand it, it is common ground that it never was. By 22nd November, as the tribunal find, Mrs Young discovered that the Wandsworth job had been offered to someone else.
5. On 30th November 1997 Mrs Young wrote to the Chairman, Mr Pope, a letter which the tribunal summarise by saying that she reiterated that she stayed with the firm on the basis of the offer of the management job at Kensington Church Street, referred to the fact that the Wandsworth job did not appear to be open any longer and that Curzon Street letting department was to close on 2nd January 1998, stated that she had received neither written nor verbal confirmation of her position within the employers and asked that matters be resolved forthwith, failing which she would consider herself unfairly and wrongfully dismissed with effect from 5th December.
6. After she had heard that the Wandsworth job was no longer available, as the tribunal found, she sought other employment. She received a formal offer of another job on 1st December which, as the tribunal found, had been the subject of prior discussion with that other firm.
7. On 3rd December there was a meeting at which other possibilities for Mrs Young's future were discussed and subsequently confirmed to her in writing. On that date she was also given a letter written by Mr Phillips which, as we understand it, for the first time confirmed in writing that he had offered to her the position of manager at Wandsworth in the discussion on 11th November.
8. That is a summary of the history as found by the tribunal. The tribunal then proceed in paragraph 10 to formalise what they plainly considered to be the most relevant findings under four heads. The first amounts to a finding, and it is clear that the tribunal made a finding, that there was a breach of contract by the failure to provide the Kensington Church Street management post that had been promised. The second is a finding that after 6th November Mrs Young remained in negotiation with her employers as to her future location and position and the tribunal continue:

"… we therefore find that although the Respondents had breached their obligation to her she had accepted that breach and was prepared to continue to work for Wood & Co."

Thirdly, there is a finding that it was only when discussions about the Wandsworth job "ran into the ground" that Mrs Young, first, sought other employment and, second, wrote the letter of 30th November to Mr Pope. And, fourthly, there is a finding that at the subsequent meeting on 3rd December the Kensington Church Street promise does not appear to have been discussed and that the discussion concentrated on other posts at other locations in London. The tribunal then goes on to summarise Mrs Young's submissions about that, but that is not part of their own findings.

9. Paragraph 11, which is quite short, reads as follows:

"11 The Tribunal find that the Applicant's claim for constructive dismissal fails. It only finds that the Respondents were in breach of contract by failing to honour their promise in respect of the Kensington job. But the Applicant subsequently accepted that Kensington was not a possibility and she effectively accepted their breach of contract by remaining in discussion with the Respondents about her future at a different location within the company."

10. The tribunal go on in paragraph 12 to deal with an issue whether there was redundancy, but for reasons to which I shall come and I need not recite that finding in detail.
11. In paragraph 13 the tribunal say:

"13 We further find that there was no further fundamental breach of any implied term of trust and confidence by the Respondent. Our view is that the Applicant wished to remain in the Mayfair/Kensington area where she has considerable knowledge and expertise, and that she chose to find employment in the same area with a new employer rather than change her location and remain with her existing employer. The Applicant's claim to the Tribunal therefore fails."[Our emphasis]

12. There is, as Mr Crosfill for the respondent very fairly concedes, a very great deal that one would expect to find in a tribunal's reasons on such issues missing. That may come down to the question of affirmation or non-affirmation of breach, because, as Mr Fairbairn who was present at the hearing recalls, that issue was simply never canvassed at the hearing before the tribunal and is raised for the first time in their reasons. However, that is not one of the grounds of appeal that is advanced. The mere fact that the tribunal canvassed an issue which had not been argued we therefore mention only as being, as I have said, a possible explanation of why the tribunal's reasoning seems in some respects to contain gaps.
13. In approaching an issue of constructive unfair dismissal there is first the question whether there was a breach? The tribunal plainly addressed that question and plainly found that there was. There is no cross-appeal on that point, and that finding Mr Crosfill therefore has to accept and does accept.
14. There is second the question whether that breach was repudiatory. There is no express finding on that point. Mr Fairbairn advances his appeal on the basis that there is plainly an implied finding to that effect, for two main reasons, first that without such a finding the discussion of affirmation or waiver is totally unnecessary, and secondly, that in paragraph 13 there is the word 'further' in the first sentence, the implication being that one fundamental breach, namely the disappearance of the Kensington Church Street job, has already been dealt with.
15. Mr Crosfill does not concede that there is any finding that the breach is repudiatory, but he does not press the point particularly vigorously. As it seems to us he is first of all in the dilemma that if there is no implied finding that it was repudiatory then there is no finding on the issue whether the breach was repudiatory one way or the other, and the reasoning must be defective on that ground alone. However, we ourselves have no doubt whatsoever that Mr Fairbairn's approach in this respect is correct and that the tribunal must be taken impliedly to have found that the breach was repudiatory. Again, on that basis there is no cross-appeal and therefore no basis on which Mr Crosfill seeks or could seek to challenge that finding.
16. That being so the next issue, albeit apparently not argued and certainly not much canvassed at the hearing, but addressed by the reasons, is whether there was affirmation. The tribunal's finding that there was is justified, so far as it is justified in their reasons, in the two passages which I have already read. The first is in paragraph 10(a), where the tribunal find that after 6th November Mrs Young remained in negotiation with her employers as to her future location and position, and continue "we therefore find that … she had accepted that breach". Everybody has agreed that the rather odd phrase "accepted that breach" must be understood to mean "affirmed the contract and was prepared to continue to work for Wood & Co." Then, in paragraph 11, after dealing with the breach, they say:

"But the Applicant subsequently accepted that Kensington was not a possibility and she effectively accepted their breach of contract by remaining in discussion with the Respondents about her future at a different location within the company."

17. In our view that first amounts to a misdirection, because it amounts to a finding that the mere "remaining in negotiation" as it is put in 10(b), or the mere "remaining in discussion", as it is put in 11, by itself and without further investigation of the duration of such discussions, the background to them or their nature, amounts to affirmation. That is simply wrong. There are very many cases where employees in such a situation have entered into negotiation with employers and on the facts been found not to have affirmed the contract or waived their right to rely upon the repudiation as a ground for resignation. How long the negotiations continue may indeed be relevant, but it is common ground that there was no great lapse of time here, and certainly the tribunal do not say and could not justifiably have said that length of time was a factor which justified their conclusion. The nature of the negotiations may be relevant, but although the tribunal do indeed to some extent recite the nature of those negotiations in their findings of fact they do not seek to, and we see no way in which they could have sought to, rely on that factor as showing that there was an affirmation of the contract or waiver of the repudiation. We therefore consider that the tribunal were in error in law in their approach to this point. But even if we were wrong about that, and there were no explicit misdirection, we are quite clear that the conclusion which the tribunal reached was on the facts which they recited and which I have summarised, and which we have taken into account perverse, in the sense that no reasonable tribunal, properly directing themselves as to the law, could on those facts have reached this conclusion. For both of those reasons, therefore, we find the conclusion of the tribunal as to affirmation wrong in law.
18. If there was no affirmation then the next question would have been what was the reason for resignation. In this case there was the factor of another job being available, and there could no doubt have been argument about whether the other job was the effective reason for resignation rather than the repudiatory breach by the employer. But Mr Crosfill accepts that if the discussion gets to that stage then it simply cannot be said that the tribunal made any proper finding of the reason for resignation.
19. If at the end of all those processes there had been a finding of constructive dismissal, then the tribunal would have had to go on to consider the issue of fairness, and the tribunal did not do that. As we conclude, and as Mr Crosfill indeed submits, the only possible result of our finding on the errors of law which the tribunal did make is that the matter must be remitted, because we have not the material on which to reach the necessary conclusions.
20. I have mentioned the issue of redundancy. That is dealt with briefly in paragraph 12 of the tribunal's reasons, which I have not recited and need not recite in detail for two reasons. First of all Mr Crosfill accepts that the tribunal is wrong in the way in which it deals with the issue whether there was at Curzon Street what is commonly called "a redundancy situation"; and secondly Mr Crosfill, for that and other reasons, agrees that if we do remit this matter for a hearing before an Employment Tribunal then the question of redundancy must be open for reconsideration from the outset. Therefore any judgment of ours in any detail about the way it was dealt with in this decision before us is unnecessary.
21. We are, provisionally, disposed to consider that the remitted hearing should be before a different tribunal, but if either party wishes to submit that it should be the same tribunal, of course we shall hear those submissions.

[After discussion.]

22. We shall direct that the matter be remitted for hearing by a differently constituted tribunal, but that the findings of the first Employment Tribunal on the following issues shall not be reopened: first, the finding of breach; second, the finding, as we hold it to be, that that breach was repudiatory; and third, the finding dismissing the complaint of further breach of the duty of trust and confidence. For the avoidance of doubt, the finding of affirmation is among those open for reconsideration; it is not closed by our conclusions on the perversity issue.

[An application for costs on behalf of the appellant.]

23. We are not prepared to make any costs order against the respondent. The power to do so requires, for present purposes, that there be unreasonable conduct in conducting the proceedings - in this case conducting the respondent's answer to the proceedings, as to which there is first of all the general consideration that, in our view, it is really only in quite extreme cases that the respondent is under a duty, on pain of being found unreasonable if he does not do so, to consent to the allowing of an appeal without any hearing. But secondly, and perhaps more importantly, this appeal comes to us following a preliminary hearing at which our colleagues then sitting considered that there was an arguable point and directed the appeal to proceed; that of course was a decision in favour of the appellant, but, there was no indication that the matter was so obvious that the respondent ought to consider whether it wished to oppose. No order for costs.