United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MS L BROOKS (of Counsel) Messrs Irwin Mitchell Solicitors 48-50 St Johns Street London EC1M 4DP
For the Respondents	MR T ARCHER (Solicitor) Messrs Richards Butler Solicitors Beaufort House 15 St Botolph Street London EC3A 7EE


 


MR JUSTICE HOLLAND:

1. By an 1TI dated the 28^th November 1997 Mrs Catherine Stafford initiated a complaint against her erstwhile employers, National Westminster Bank PLC, alleging constructive dismissal and disability discrimination. The complaint was heard over four days in August 1998 by an Employment Tribunal sitting for London (South). By that date disability discrimination was no longer alleged. In the result (as communicated to the parties with Extended Reasons on the 16^th September 1998), the Tribunal held that she was "not constructively dismissed." Against that finding she appeals to this Tribunal alleging that it is founded on an error of law.

Chronology

2. The issues arose out of the following chronology:
3. 26^th February 1992 - The Appellant (as she now is) joins the Respondents (as they now are). She is then aged about 37 and she initially works in Bristol.
4. 1^st May 1996 - She becomes a Consultant Manager in the Respondents' United Kingdom Pensions Unit. The latter had been set up in London to investigate such pension plans as had been the subject of prior advice by the Respondents, that investigation being driven by regulatory requirements aimed at exposing the 'mis-selling' of pensions. The Tribunal made findings in paragraph 6 of the Extended Reasons:

" ..... The external regulators, the Securities and Investment Board (SIB) and the Personal Investment Authority (PIA), required the Bank to review advice given to every customer to whom a pension had been sold. This was a very high profile department and was subject to pressure from the regulatory bodies and the Minister responsible to ensure that the vast number of people to whom pensions had been sold and who complained about mis-selling were dealt with speedily. There can be no dispute that this was a highly pressured department."

5. The Unit seemingly contained about one hundred employees. As a Consultant Manager the Appellant supervised two groups, each of six or seven employees. She was a training manager and there is a finding by the Tribunal that she was notably good as such.
6. August 1996 - She took over a further role: Operational Manager for the SERPS team.
7. The period to January 1997. The Tribunal noted the Appellant's contention that during this period the strains of the work were exacerbated by bullying behaviour on the part of her line manager, Mrs. J. Whelan, and more particularly on the part of the Head of Department, Mr. A. O'Regan. It is important to note that whilst the Extended Reasons faithfully record the Appellant's case no note is made of the respective contentions of Mrs. Whelan and Mr O'Regan (both of whom gave oral evidence), nor is there any attempt to make findings as to the Appellant's allegations.
8. January 1997. A reorganisation with the department was initiated.
9. 19^th January 1997. By way of a memorandum the Appellant expressed concerns over the reorganisation.
10. 15^th January to 17^th February 1997. The Appellant was away from work suffering from depression.
11. February to March 1997. An important sequence of events was recorded buy the Tribunal in paragraphs 12 and 13:

"12. On her return to work Mrs Stafford discussed her new duties with Mr O'Regan. He was concerned about her health and invited her to consult with Dr Murray Bruce, the Respondent's consultant doctor. And this she did on 20 February 1997. Dr Bruce wrote to Mr O'Regan on 27 February 1997 (Exhibit R1 document 111), in which he states:

'It does look to me as if it was various aspects of her work which have contributed to her illness. I think these are best covered in discussion with you and I will be pleased to visit your office as arranged on Friday 28/2 at 10 a.m.'

This discussion appears to have taken place.

13. On 27 March 1997 Mrs Stafford informed Mr O'Regan that she would be resigning from her employment. He stated, in evidence, that he was concerned that she was not in a fit state to make this important decision and he refused to accept her resignation. There is no doubt that she did not, in fact, pursue her decision to resign at this stage. She went on sickness leave from that date suffering from depression and she never returned to work in the pension unit."

12. 4^th May 1997. Mr. M. Searle become Head of the Pension Unit. Mr O'Regan thereafter retained a line manager's responsibility for the consultant managers in the Unit.
13. 12^th June 1997. The Appellant returned to work undertaking temporary duties in other departments, seemingly without particular difficulty. A personnel officer, Mrs. Julie Barker sought to help her to find a permanent position.
14. 27^th August 1997. There is an interview between the Appellant and Mr Searle. Unhappily there is a conflict of recollection as to what was said but it seems that whereas neither said as much both had reason to think that Mr O'Regan was due to retire and that Mrs Whelan was due to start maternity leave. As to the conflict, the Tribunal preferred Mr. Searle's version:

18. Mr Searle's version of the interview is that the pension unit had expanded rapidly and there was a need for a training manager to cover all the aspects of training within the unit. He would require Mrs Stafford to work as an assistant to the training manager in that she had particular expertise in training in technical matters and she would be fully occupied and possibly less stressed than she had been. This would possibly be a temporary position for three, four or six months and the situation could then be reviewed. As assistant to the training manager she would not report to Mr O'Regan. She would report to Mr Searle. Her grade, salary and status would be unaffected. He denied expressing a lack of faith in Mrs Stafford's ability to return to her former role. He was prepared to let Mrs Stafford return as a consultant manager but in that case she would have to report to Mr O'Regan and she was adamant that she did not wish to report to Mr O'Regan. She indicated that she felt his presence to be unsettling. Mr Searle was aware that Mr O'Regan was likely to be leaving in three or four months' time and it might then be possible to transfer her over, but he could not be certain at the time of the interview.

19. On balance, we preferred the evidence of Mr Searle as to his version of the interview. We accept Mr Searle's evidence that Mrs Stafford was an expert technical training manager and he required her expertise. It would not seem logical for him to have been dismissive of Mrs Stafford in the manner in which she has stated. It may be that she was in a depressed state at the time, uncertain as to her future, and misconstrued what Mr Searle had told her.

20. Mr Searle's evidence was that he advised her to consider the issue carefully, talk amongst her colleagues, and return too him with her decision. She in fact informed him by telephone on the next day that she would be resigning from her employment."

On the Appellant's version she was being invited to confront a renewal of reporting to Mr O'Regan. In the event she gave notice and left this employment.

The Law

15. Fundamental to the Appellant's case was Section 95(1)(c) Employment Rights Act 1996:

"For the purposes of this Part an employee is dismissed by his employer if .....:

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

16. Guidance as to a Tribunal's approach is provided by an oft-cited passage from the judgment of Lord Denning M.R. in Western Excavating (ECC) Ltd v Sharp (1978) 1 CR 221 at 227:

" ..... If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself discharged from any further performance. If he does so, then he terminates the contract by reason of the employer's conduct. He is constructively dismissed. The employee is entitled in those circumstances to leave at the instant without giving any notice at all or, alternatively, he may give notice and say he is leaving at the end of the notice. But the conduct must in either case be sufficiently serious to entitle him to leave at once. Moreover, he must make up his mind soon after the conduct of which he complains: for, if he continues for any length of time without leaving, he will lose his right to treat himself as discharged. He will be regarded as having elected to affirm the contract."

The Employment Tribunal

17. The Tribunal having directed itself as to the law as above made findings as follows:

"23. We must state that we have a lot of sympathy with Mrs Stafford and the situation in which she found herself. However, we cannot find, as a fact, that the Respondent behaved in such an unreasonable manner as to entitle Mrs Stafford to consider that her contract of employment had been breached and that she was, thereby, entitled to repudiate her contract of employment and submit her resignation.

24. In coming to this decision we note that Mr O'Regan appears to have been concerned about Mrs Stafford's health and himself referred her to Dr Murray Bruce. We note that he refused, on 27 March 1997, to accept her resignation but gave her the opportunity to think about it. In his view, her health was not in a sufficiently good enough state to come to such an important decision. We accept Mr Searle's evidence that, in the final interview on 27 August 1997, Mrs Stafford was offered the position of assistant training manager and she would be reporting to himself and not to Mr. O'Regan and she would remain on the same grade and on the same salary as she had been. This may have been perceived as a slight drop in status. However, the situation was under review and it must be remembered that Mrs Stafford had had two lengthy periods of sickness due to her depression. We also note that human resources advisers had attempted to find her alternative employment within the Respondent's organisation. These are not the actions of an uncaring employer.

25. We find that the Respondent did their best to accommodated Mrs Stafford. Unfortunately she felt unable to accept their terms for her own reasons.

26. We note that Mrs Stafford at no time followed the grievance procedure against her managers. There was no suggestion that a group audit should be brought in to investigate problems in the pension unit. The allegations were vague and human resources advisers decided not to pursue the route of group audit investigation and we note that Mrs Stafford did not wish her name to be identified in any investigation. We also note that in this highly pressured unit possibly the niceties of working life may not always have been followed.

27. Mrs Whelan commenced her maternity leave in September 1997 and never in fact returned to work with the Bank. Prior to her going on maternity leave she had worked for approximately two months, a lot of the time at home. Mrs Stafford must have been aware that Mrs Whelan was pregnant and would go on maternity leave although she would not be aware that she would not return to work at the Bank.

28. Taking all these factors into account, we do not find that Mrs Stafford was constructively dismissed pursuant to section 95(1)(c) of the Act and this application fails. Mrs Stafford resigned from her contract of employment. She was not dismissed. We wish Mrs Stafford every good fortune in the future and a return to good health."

The Appeal

18. On behalf of the Appellant Miss Brooks submits as follows:

(a) That which the Appellant was exposed to when in this unit in the period to March 1997 (and particularly the behaviour of Mr O'Regan and Mrs Whelan) amounted in the words of Lord Denning M.R. to "Conduct which is a significant breach going to the root of the contract of employment" and amounted to constructive dismissal.

(b) By tendering resignation on the 27^th March the Appellant was promptly intimating her 'acceptance' of such dismissal.

(c) Granted that her then state of health justified the Respondents' refusal to accept her resignation, nonetheless her stance did not alter in the period to 27^th August. On proper analysis she was seeking to mitigate the loss resulting to her from such dismissal by taking up a suitable alternative post away from the strains and bullying that were a feature of the Pensions Unit.

(d) Thus when Mr Searle offered no more than a return to the Unit her efforts at mitigation were at an end and the constructive dismissal of March took effect by her giving notice.

(e) The case thus deployed was simply not addressed in the Extended Reasons. There should have been findings as to, respectively, whether or not the conduct complained of occurred, as to whether such constituted a breach as identified by Lord Denning M.R. and as to the resultant significance in law of the events of and subsequent to the 27^th March. Miss Brooks accepted that the notion of constructive dismissal in March was not canvassed in the ITI but she contends that the point was implicit in the Further and Better Particulars and that it was advanced to the Tribunal in her final speech. That failure to address the case amounts, she submits, to an error of law justifying the allowing of the appeal and the remittance of this matter to a fresh Tribunal for a re-hearing so that the true issues could be the subject of findings of fact.

(f) Her alternative case is that the, Appellant was constructively dismissed by Mr Searle in that he specified a return to the Unit notwithstanding the history, and notwithstanding that there was then no certainty that Mr O'Regan would be departing from it. To demand her return to the Unit evinced an intention to dismiss her: such could not be sustained by her without a breakdown in her health. Submits Miss Brooks, here again the Tribunal failed to confront her case and make significant findings of fact. In particular it failed to make findings as to the pre March history and the significance of further contact with Mr O'Regan.

The Response

19. On behalf of the Respondent Mr Archer submits that the approach of the Tribunal as it appears from the paragraphs cited above cannot be faulted as to law. He further submits that what in reality is under challenge is the Tribunal's assessment as to fact, which challenge can have no effect before us. Whatever might have been found as to the events of and before March 1997 is not in point: the focus has to be on the ultimate resignation and the circumstances giving rise to such.

Our Findings

20. We agree with Mr Archer. The termination of the Appellant's employment was upon notice and took effect on the 25^th September 1997. Was that termination justified by reference to the Respondents' conduct, see Section 95(1)(c)? That essential issue raised for the Employment Tribunal was a jury question involving findings and assessment of fact. In the event the Tribunal chose to deal with the issue by noting (and accepting) the Appellant's earlier depression and her continuing animus against Mr O'Regan along with a host of other factors, all as spelled out in paragraphs 23 to 28 as cited above. We think that this approach cannot be faulted as to law. True, the Tribunal did not make specific findings as to the merits of the Appellant's animus against Mr O'Regan or Mrs Whelan but we can see no reason for such. Indeed arguably the Tribunal's approach was favourable to her in that the basis for the animus was not called into question or challenged (as might have been the result of specific findings). Averting to Miss Brooks's primary case, namely that there was constructive dismissal as at March 1997with its effect pending until the 27^th August, we agree that such is not specifically confronted in the Extended Reasons. However in our judgment that failure did not render the Tribunal's decision defective in law. Had the Tribunal confronted that case it would have been bound to reject Miss Brooks's construction of the legal implications of events in and after March 1997. As appears from the passage cited from the judgment of Lord Denning M.R., for the Appellant to claim constructive dismissal there must have been an early, clear decision to regard herself as discharged. The facts reveal no such decision - indeed, quite the opposite. Unilateral decisions, respectively, to withdraw resignation, to return to work and examine tendered options (a fortiori, in the light of the career moves of her husband) are wholly inconsistent with a perceived state of constructive dismissal in, as it were, suspended animation. What if a tendered option had been accepted? Were the Respondents then unknowingly re-engaging her? Or were they somehow expunging the events in and leading up to March 1997? The argument's subtlety and weakness prevents it from having a serious role in the matter. The appeal is dismissed.