United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR C SHELDON (of Counsel) MR G.J OAKLEY Solicitor 46-67 Baker Street London W1A 1DN
For the Respondent	Respondent neither present nor represented


 


THE HONOURABLE MR JUSTICE MORISON (PRESIDENT): This is an appeal against a decision of an Industrial Tribunal which was promulgated on 18 February 1998. The proceedings have something of a history to them. Mr Thompson, the Appellant, had brought a complaint of unfair dismissal (constructive dismissal) against his former employers, Ritec Limited, the Respondents. The essence of his claim was that his employers had failed or refused to pay into the pension fund the employer's contributions which were due, and despite persistent requests for them to put the matter right, the employers had failed to do so. After a warning to them by letter dated 12 January 1994 that he was proposing to exercise his right to, nonetheless the employers still did not put the breach right.

The Industrial Tribunal initially accepted that there had been a breach of contract but came to the conclusion that this was not a fundamental or sufficiently serious breach to justify the employee in walking out. The matter came before the Employment Appeal Tribunal for a full hearing in 1997 (15 November 1996, judgment delivered on 10 December 1996). The judgment of the Employment Appeal Tribunal (given in extensive form) was that the Industrial Tribunal's approach to the question of what was a serious or sufficiently serious breach to justify the employee walking out had not been correct in law and the learned Chairman and lay colleagues at the Industrial Tribunal were invited to reconsider that question, the matter being formally remitted back to the same Tribunal for their further deliberation.

The Industrial Tribunal did consider the matter again in December 1997 and their decision with which this appeal is concerned, was promulaged as I have indicated on 18 February 1998. The Industrial Tribunal concluded on that occasion that there was no reason to alter their previous decision. They indicated that the Tribunal had taken into account all the authorities (to which the Employment Appeal Tribunal had drawn attention) had indicated that they had previously been aware that failure to pay pension contributions into a pension fund was a serious breach of contract but justified their decision on the basis that the Applicant left in circumstances where there was a hidden agenda which caused him to leave, in other words he left for some reason not connected with the employers failure to make the payments into the pension scheme and in any event, it was unreasonable for the employee to have departed given that the employers had, in response to his letter of 12 January 1994, indicated that they would be prepared to discuss the matter and potentially put it right in a year's time. The reason why Ritec Limited were unable to pay money into the pension fund was attributable to the shortage of funds.

And so the matter comes back before us again, and it is argued on behalf of the Appellant, Mr Thompson, that effectively the Tribunal have not reconsidered their previous decision but rather have simply sought to justify it by improving the terms in which they give their reasons. Secondly, the decision of the Industrial Tribunal in relation to the seriousness of the breach justifying the Appellant leaving his employment was perverse and thirdly, having regard to the comment about a hidden agenda and that the Applicant was contriving the position in which he could leave for some unspecified reason, this was a point which was not dealt with in the evidence and there was no factual foundation for their conclusions.

It is the experience of this Court that sometimes it is appropriate to remit a case to an Industrial Tribunal who heard the original complaint so as to enable them to review their decision in the light of any guidance given by the Employment Appeal Tribunal. There are many cases where if a remission is required, it is more sensible for the case to be remitted to a freshly constituted Tribunal, not least in those cases where the party who lost originally would be likely to be of the view that the same Tribunal would simply rubber stamp its previous decision and that a remission would give him no real rights.

The Tribunal in this case was chaired by a very experienced Chairman. We do not in this judgment wish to criticise the approach which he has taken, although it has to be said that much of what he said in the second decision could have led the Appellant to the belief that this case was not reheard in the way the Employment Appeal Tribunal had anticipated in their first judgment. We can, we believe, deal with this appeal very shortly because it does seem to us, with great respect to the Industrial Tribunal, that no reasonable Tribunal properly directing itself as to the law, could have concluded on the evidence before it that the failure to make the pension contributions was other than a serious repudiatory breach of contract entitling the employee to accept and walk off. The evidence showed that over the two year period prior to the Applicant leaving his employment, he had raised the question of the non-payment of his pension contributions on 16 occasions. When he finally wrote at the beginning of 1996 saying that if they did not make proper amends he would be forced to resign, the employers simply responded in a way which, in our judgment, was wholly unreasonable, seeking to defer consideration of the pension matter for approximately one year. In those circumstances, it seems to us that every employee faced with this degree of procrastination by his employer in relation to a matter which is of great importance in the employment relationship would have been entitled to treat as a repudiatory breach and leave his employment.

As to the suggestion that the employee was provoking a situation in which he could leave for some hidden or unspecified reason, we accept Counsel's submission that there was no basis for such a finding. If the Tribunal were minded to make that finding, they should have put the matter squarely to the Applicant to enable him to deal with it. The only potential reason that we can think of as to why an employee might have engineered the termination of his contract would be if he had other work immediately to go to. We are told by Counsel, Mr Thompson, and accept that this is not such a case as the Applicant was out of work following the termination of his employment with Ritec Limited for a period of some months before he obtained alternative employment.

It seems to us that the failure to pay pension contributions into a pension scheme is akin to a failure by the employer to make a payment of wages or other parts of the remuneration package; that in this case the employee was entitled to infer that the employers were deliberately refusing to put the matter right based on the way they had dealt with it over the previous two years. There was a history of procrastination; and in any event it does seem to us that this can only be described as a serious breach of contract going to the root of the obligations between employer and employee destroying the underlying trust and confidence that is required in the employment relationship.

As to the suggestion that was made that the Applicant, by delaying, had somehow waived the employer's breach, we consider that such a contention is wholly unsupportable. The employee was faced with a continuing series of breaches by his employer (that is, a continuing failure to make payments into the pension scheme) in an employment relationship. He was left with a dilemma as to how he should deal with the matter. It was entirely reasonable in our judgment, that he should continue in his employment trying to persuade his employers to put the matter right, and that he was entitled to regard what happened at the beginning of 1996 as the last straw. He was entitled to say to himself, up with this repeated breach of contract, I am not prepared to put up any further. That being so, it seems to us that this was a perverse decision of the Industrial Tribunal in all the circumstances and we therefore allow the appeal.

I should make it plain that the Respondents have failed in this case to enter a Notice of Appearance to this appeal but they have been written to persistently asking them to enter a Notice and eventually were served with an unless Order which they did not comply with and ultimately they were debarred from defending this appeal. It seems to us, in the circumstances, that there is nothing they could have said to render the second decision of the Tribunal sustainable in law. This was obviously a case of repudiatory breach as we have indicated.

Accordingly, the appeal is allowed and the matter must go back to an Industrial Tribunal to assess compensation. Whether it would be necessary for it to go back to the same Tribunal is not necessary for us to determine, although we can see no good reason why it, as this is an exercise concerned with a discrete question as to what losses, if any, Mr Thompson has sustained as a result of his employer's repudiatory breach justifying him in walking off from his employment. If the existing Tribunal want to take jurisdiction over it so be it, but we do not think this is a case where that is essentially desirable, and certainly not necessary.

We would wish to make it plain that the question of compensation will be dealt with on the basis of full liability. This is not a case, as it seems to us, where it is arguable that in any way Mr Thompson has contributed to his own dismissal. On the contrary, he has been asserting his contractual rights and when they were unfulfilled he left his employment. Therefore there can be no question of any reduction in the compensatory award.