United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR S. LAKHA (of Counsel)
For the Respondent	MS A. RUSSELL (of Counsel) BURSTOWS 8 Ifield Road Crawley West Sussex RH11 7YY


 


HIS HONOUR JUDGE CLARK: This is an appeal by Mr Janmohamed, the Applicant before the London (South) Tribunal against that Tribunal's reserved decision to dismiss his claims of unfair dismissal and for breach of contract. That decision with extended reasons was promulgated on 3 February 1998.

The Facts

The Appellant was employed by the Respondent from 5 September 1988 until his resignation on 9 December 1996. He was employed as Area Service Manager.

The material events leading to his resignation, in circumstances which he claimed amounted to constructive dismissal were these.

By his letter of appointment dated 1 August 1988 it was provided that:

"A Maintenance Commission will be paid on a monthly basis, determined by the income of contracts within your region. With the current workload this payment will be in the region of £30 per month..."

A payment of £25 per month was made from February to June 1989 inclusive following the completion of the Applicant's probationary period. In June 1989, new schemes were introduced. In lieu of the Maintenance Commission, two new payments were introduced. The first was a "Service Department Profit Related Bonus", and the second was a "Maintenance Contract Commission". The first payment was based on the overall profit of the Service Department. The second was based on the number of the new maintenance contracts sold by the individual engineer. The Appellant received varying payments of the bonus in accordance with the new scheme.

There was a further slight change in March 1990. The bonus scheme changed from being based on monthly profits to being based on quarterly figures. Various payments were made from time to time to the Appellant. The new scheme the Tribunal found was first introduced to the engineers in the South of England at a meeting in June 1989 when all those present were given a copy of the Pay Review Document. The Tribunal found as a fact that the Appellant was present at that meeting, contrary to his evidence and that he received a copy of the document. In these circumstances the Tribunal found that he knew of, and accepted, the changes in the basis of his remuneration which took place in 1990. There was a consensual variation to the terms of his employment.

It was common ground that over the years the Appellant had on several occasions over the years asked for a contract of employment or a statutory statement of terms and conditions of employment. On 30 September 1996, the Respondent's Managing Director, Mr Rasores, wrote a standard form letter to all engineers including the Appellant. The letter enclosed a document headed "Principal Statement of Main Particulars of Employment (the "Statement")".

The covering letter read:

"The Directors have for some time recognised that our administrative arrangements need to be brought completely up-to-date especially in light of recent changes to Employment Regulations.

We enclose with your September payslip two updated copies of your Principal Statement of main particulars of employment which the law requires you to receive, confirming the main points of your Employment Contract, one of these copies is to be returned signed to the Company.

Please note that this document confirms your current Terms and Conditions of Employment.

The Company has been able to award a pay review to some members of the staff. It is a condition of this pay review that all the particulars of your Employment Contract are accepted."

We are also enclosing a written statement of the company's rules together with a statement of our local safety arrangements, advice and information and a vehicle policy if applicable. Please read these documents carefully then sign and return the slip below.

The letter concluded:

"If you have any queries regarding any of this documentation, please do not hesitate to raise them with me or your Head of Department."

At the foot of that letter was a rubric reading:

"I acknowledge receipt of copies of (a) the company's rules (b) local safety arrangements, advice and information, and (c) vehicle policy. I have read, understood and agreed to work by these documents"

and then there was a space for the employee's signature, date and printed name.

As to the statement, the Tribunal record at paragraph 17 of their reasons, a concession by the Respondent's representative, Mr Gatley, that some of the terms there contained were new terms not previously included in the Appellant's employment contract. Before us, Mr Lakha has identified six new terms, Ms. Russell acknowledges five of those, the difference is immaterial for present purposes.

The Statement concludes with provision for signature by and on behalf of the Respondent and there is a signature on the copy sent to the Appellant and below that, acknowledgement of receipt of the copy of the document and space for signature and a date to be completed by the employee. The Appellant did not sign and date that document. Indeed he responded to that letter and the Statement in some detail by a letter dated 13 November 1996, written with the benefit of legal advice. The thrust of his response was that the Statement was an attempt to unilaterally and fundamentally vary his terms of employment. That he found to be utterly unacceptable. He then gave chapter and verse of what he claimed were the differences between certain of his contractual terms and the equivalent terms set forth in the Statement. Finally, he noted Mr Rasores offer in his covering letter of 30 September, to reconsider the matters there raised, and asked him to withdraw the unacceptable terms, giving a period of 10 days in which to respond, failing which the Appellant indicated that he would assume that he was not willing to withdraw those terms.

We pause to observe that in his Originating Application, at paragraph 7 the Appellant pleaded that he did not accept that Statement and continued to work in accordance with his contractual terms. That factual position was confirmed to us today by Mr Lakha, who appeared on behalf of the Appellant.

In fact, no response was received to that letter from the Respondent within the 10 days specified by the Appellant or at all prior to his resignation whilst on holiday on 9 December 1996. Various explanations for that omission were advanced by the Respondent in their Notice of Appearance and in evidence. The Tribunal noted in their reasons, that in particular the Respondent was engaged in litigation with an ex-employee in the High Court during the relevant period.

The Appellant's letter of resignation, in which he claimed to have been unfairly constructively dismissed, evoked a prompt response by Mr Rasores, who wrote on 11 December apologising for his failure to reply to the Appellant's letter of 3 November, and asking him to reconsider. He there stated that the Appellant's existing terms and conditions of employment would not be changed without his consent. The Appellant was unmoved, and by letter dated 22 December 1996 maintained his position.

The Complaint

The Appellant's case was that the Respondent had failed to withdraw the unacceptable terms contained in the Statement, that there had been a total breakdown of mutual trust and confidence and further that there had been a failure to pay contractual commission due to him.

Employment Tribunal Decision

Based on their findings of fact, the Tribunal concluded that there had been no failure to pay contractual commission. On the wider question of repudiatory breach of contract, the Tribunal found:

(1) That the letter of 30 September 1996 was not an unequivocal statement that the Appellant would thereafter be employed on the terms contained in the Statement; and

(2) The failure to respond to the Appellant's letter of 3 November and withdraw the new terms set out in the Statement did not constitute a fundamental breach of the contract.

Accordingly the Appellant was not constructively dismissed for the purposes of his claim for both unfair dismissal and breach of contract (i.e. wrongful dismissal).

The Appeal

Mr Lakha began his submissions before us by boldly asserting that this Tribunal decision was perverse in the sense formulated by Mr Justice Wood, giving the judgment of this Employment Appeal Tribunal, on which Mr Scouller sat, in East Berkshire Health Authority v Matadeen (1992) ICR 723, 737 E-F, 738 B. Having considered what followed, and looking at the decision as a whole, we are all three of us far from that position where it would be permissible to interfere with the decision.

The factual position, as found by the Employment Tribunal, was that in the Statement the Respondent set out 5 or 6 terms which did not accurately reflect the true contractual terms.

The Appellant objected. He wrote to the Respondent a detailed summary of his objections. He did not work to the new terms, he affirmed the existing terms. The Respondent did not reply; not did it seek to actively impose those terms. The Appellant went on holiday. During his holiday he resigned without more. There was no meeting to discuss his queries. Had there been one, the Tribunal found, the Respondent would have reconsidered its position and then made a final decision.

In these circumstances the Tribunal was entitled to conclude in our judgment, that the Respondent did not evince an unequivocal intention to impose new terms on the Appellant. There was no breach entitling him to treat himself as discharged.

Although there is no express reference to the Appellant's case that the Respondent was in breach of the implied term of mutual trust and confidence, it is, we think, implicit in the second question which the Tribunal asked themselves at paragraph 19 of their reasons and answered within paragraphs 23-25.

We have been taken to the statements of principle as to the circumstances in which we can interfere with the essentially factual question as to whether or not a fundamental breach of contract has taken place. Having considered those authorities, particularly Woods v W M Car Services (Peterborough Limited), both in the Employment Appeal Tribunal (1981) ICR 667 and the Court of Appeal (1982) ICR 693, and Pederson v Camden London Borough Council(1981) ICR 674 (Note) (Court of Appeal), we are fortified in our conclusion that this appeal must be dismissed.