United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR J HYAM (of Counsel) Appearing under the Employment Law Appeal Advice Scheme


 


MR JUSTICE CHARLES: This appeal comes before us by way of preliminary hearing. The parties are a Mr Sears and the Coventry City Council. There are two appeals. The first is against the decision of the Employment Tribunal which was contained in their Extended Reasons sent to the parties on 28 October 1998. The other is against the decision of the Chairman of that Employment Tribunal to review that decision. The reasons for that refusal to review were sent to the parties on 10 December 1998.

1. We shall deal firstly with the refusal to review. We shall deal with that shortly. The reasons given by the Chairman are set out in his Extended Reasons and, in our judgment, they do not disclose any error of law on his part and indeed, in our judgment, they showed that he applied the correct approach and on that exercise of his discretion reached the correct answer. It follows, in our judgment, that it is not reasonably arguable that in refusing the review there was any error of law.
2. We turn now to the main or substantive appeal namely the appeal against the main decision. That decision was that the Applicant, Mr Sears, was unfairly dismissed but that he is not entitled to any remedy and that the Applicant's claim for wrongful dismissal and damages for breach of his contract of employment is dismissed.
3. The hearing took place over five days and the decision was a reserved and unanimous one.
4. The Notice of Appeal which was prepared by Mr Sears himself runs to some 18 pages and is supported by an affidavit. It has also been supported before us by a skeleton argument prepared by Mr Sears.
5. Today, we and Mr Sears have had the considerable assistance of Mr Hyam, who has appeared for Mr Sears under the ELAAS scheme, which has helped all of us to focus attention on relevant points.
6. The grounds of appeal can conveniently be divided into four heads. We describe them in slightly different terms to the way in which Mr Sears described them in his skeleton argument. We describe them in the following way.

Point A:. Bias or procedural unfairness.

Point B: The Extended Reasons contain findings of fact that cannot be supported by evidence or are irrational.

Point C The Employment Tribunal erred in law in reaching their decision that the Applicant, Mr Sears, should have no compensation for unfair dismissal without allowing him the opportunity to be heard on the issues relating to compensation

and

Point D: The Employment Tribunal erred in law in its description of the implied term of trust and confidence and in its assessment of Mr Sears' claims for damages for breach of contract.

7. We shall start by dealing with Point C:
8. In our judgment it is reasonably arguable that the Employment Tribunal erred in law in determining the issue, relating to compensation / remedy for unfair dismissal, without affording Mr Sears an opportunity to be heard on those points.
9. Central to these issues of compensation / remedy will be an interpretation of the correspondence in 1997. Mr Hyam took us to some of that correspondence both as summarised in the Extended Reasons and in the bundle of documents. An interpretation and application of that correspondence against its proper background is also a central point on what was described in argument as "the 1997 breach of contract claim". This claim can shortly be described as an assertion that the employers were in breach of the implied term of trust and confidence by not taking proper steps to ensure that Mr Sears could return to work at a time when he was medically fit to do so.
10. That is an introduction to point D which deals with the allegations of breach of the implied term of trust and confidence. That term is a well known one and, for example, is set out in Harvey, paragraph D 430 by reference to the affirmation of its existence by the House of Lords in Mahmud v BCCI [1997] ICR 606, where the authors of Harvey say the term was held to be as follows:

"The employer shall not, without reasonable and proper cause, conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee."

11. There were two strands of Mr Sears' claim. The first relates to the events of 1995, when he was assessed and criticisms were made of his teaching by his employers. At that stage the employers, as we understand it, adopted a competency procedure rather than an appraisal procedure.
12. Mr Sears' complaint is that the competency procedure that was not carried out fairly. Indeed, I think he goes further and says that it was conducted oppressively. In this context the summary of the facts found in the Extended Reasons, paragraphs 5(xiii) through to (xxii) are perhaps of central importance. We will focus on simply one aspect of them and that is what is reflected in paragraph (xviii). That paragraph is in the following terms:

"On 12 and 13 July 1995 immediately prior to the end of the Summer Term, the formal Competence hearing took place before Mr Kershaw. Although he was not then provided with a copy much of the case put to Mr Kershaw by Mrs Mitchell and Mr Lynch was based upon Mrs Mitchell's report dated 11 July 1995 entitled 'Performance Report. Mr Sears. Strictly Confidential' (357-367). Whilst taken aback at the detail and force of the allegations against him, the applicant prepared his response overnight during the hearing and delivered it on the 2nd day, believing that he had satisfactorily answered the very personal and varied allegations against him. The issues raised were those originally set out in the 9 March 1995 meeting but with more detail provided by Mrs Mitchell and Mr Lynch."

13. The 9th March meeting is mentioned earlier in the Extended Reasons and in sub-paragraph 5(xi) it says:

"On 9 March 1995, Mr Lawley and Mr Lynch met with the applicant for the first meeting within the informal stage of the Capability/Competence procedure (314 - 316); 6 specific issues were raised with him with expectations of improved performance; a four week period for improvement was set."

But the document dated 11 July entitled "Performance Report" referred to in paragraph 5(xviii) is 11 pages long, some of it relates to support but the complaints cover 7 full pages.

14. As appears from paragraph 5(xviii), before the Competence hearing Mr Sears was not provided with a written list of the complaints contained in the "Performance Report". Indeed, he was not provided with a written list until some time afterwards and had to deal with the Competence hearing at the end of the summer term without (or it would appear without) being given (and we put this in inverted commas) "a list of the charges that were being made against him". His case is that that was thoroughly unfair and oppressive and he goes on to say that it formed part of the breach of contract he alleges.
15. So far as that claim is concerned the Tribunal deal with it in the second paragraph 13 of their Extended Reasons in the following terms:

"The tribunal fully accepted the applicant's submission of law that there was a basic implied term in every contract of employment that the employer would repose trust and confidence in the employee and also found in law an implied obligation in contract (akin to that under the law of tort) to take reasonable care of the employee's health and safety including his mental health. However, the tribunal was simply not satisfied on the balance of probabilities that the respondent was in breach of either of these implied duties. As stated earlier, the applicant's perception or interpretation of events which undoubtedly led him to a complete loss of trust and confidence in his own employers was often not justified in the view of the tribunal and the tribunal did not accept that the respondent was itself in breach of duty so as to cause his loss of trust. In any event, the tribunal was not satisfied as a matter of causation that any breach of duty by the respondent caused the applicant's nervous breakdown and subsequent sickness absence and loss of pay."

16. Arising from that paragraph the first point that can be made is that the implied term is not expressed in the most felicitous language. That, it seems to us, founds the potential for an argument that it was misinterpreted and misapplied.
17. Also, there is a considerable lack of reasoning which underlies the conclusion in the phrase "the tribunal did not accept the respondent was itself in breach of duty so as to cause his loss of trust". As to that, there is no linkage back to the manner in which the competency or appraisal was carried out in 1995 which, on any view, lies at the root of the dispute between the parties in this appeal.
18. The second limb of the breach of contract claim is dealt with in paragraph 14 of the Extend Reasons and that is in the following terms:

"The other aspect of breach of contract is a straightforward wrongful dismissal claim for lost notice pay. The applicant was in reality given notice of dismissal (termed notice that his resignation would be effective and his employment would cease on 31 August 1997) on 24 July 1997; he was therefore only given 5 weeks rather than his contractual entitlement of 3 months, leaving a shortfall of 8 weeks' notice. However, the reality is that the respondent dismissed him for his continued failure to provide medical certification for his absence and to signify an intention to return to work, despite giving repeated opportunities for him to do so. The tribunal finds on the balance of probabilities that the applicant was himself in repudiatory or fundamental breach of his contract of employment."

19. An essential finding in respect of that issue is to be found in paragraph 5 (xlvii) of the Extended Reasons relating to a letter of 9 June 1997. The interpretation and application of that letter read together with the surrounding correspondence is, as we have said, a central feature of the issues that arise in respect of (a) this claim for breach of contract, and also (b) the assessment of whether or not Mr Sears made a 100 per cent contribution to his loss and thus in respect of the issues relating to compensation / remedy for unfair dismissal (see Point C).
20. It seems to us that it would be foolish that this Tribunal should be considering the compensation / remedy issues in isolation from the arguments that arise in respect of the "1997 breach of contract claim". In our judgment, points that are reasonably arguable are raised as to the interpretation of that correspondence, having regard to the background history which can be dealt with by this Tribunal on the documents. Additionally, in respect of this breach of contract claim, again, the point is raised as to the manner in which the Employment Tribunal have expressed themselves concerning the nature of the implied term of trust and confidence and again, it is arguable that there is a lack of adequate reasoning in paragraph 14 to found the Employment Tribunal's conclusion.
21. It is therefore, for the reasons I have attempted to set out, our conclusion that points of law that are reasonably arguable are raised in respect of both breach of contract claims and thus to the allegation that there was a breach in 1995 and the allegation that there was a breach in 1997. Those arguments go to the description and expression of the implied term and its application in this case, having regard (particularly in respect of the 1997 claim) to correspondence passing between the parties.
22. That leaves what we described as points A and B raised in the Notice of Appeal. We can deal with them together.
23. The essential thrust of our point A is that it leads to point B and the errors that the Appellant says the Employment Tribunal made in its assessments of the facts. The underlying allegation relating to point A is: (a) that the Employment Tribunal failed to understand that the main claim was for wrongful dismissal and breach of contract and not for unfair dismissal, and (b) that this led to procedural unfairness and, as a consequence, led the Employment Tribunal into error in assessing the facts. A large part of the unfairness alleged is that the employers' witnesses were called first and the employers effectively opened the case.
24. We shall assume that the Employment Tribunal did think that the main claim was for unfair dismissal and were not ones for wrongful dismissal and breach of contract, as the Appellant alleges, and that if they had not thought this, they would have allowed the Appellant to go first.
25. On those assumptions it is nonetheless apparent that the Employment Tribunal were well aware that the Appellant had a claim for wrongful dismissal, that the Appellant had a claim for damages for breach of contract and that they considered both those claims in addition to their consideration of the claim for unfair dismissal.
26. Having regard to those matters and the detail of the fact-finding in the Extended Reasons, we have concluded that the Appellant does not have a reasonably arguable point that the Employment Tribunal conducted the hearing in an unfair manner, or that the way in which they conducted the hearing caused them to err in their assessment of the factual situation or caused unfairness to the Appellant. That does not mean that the Appellant does not have arguments relating to his breach of contract claims, and which are based on the correspondence and the documents, that errors were made, or adequate explanations were not given, by the Employment Tribunal. It simply means that he cannot proceed with these arguments that there was procedural unfairness or bias and that these caused errors to be made.
27. Another point raised in this context by the Appellant in paragraph 10 of his skeleton argument related to his statement being treated "as read". In our judgment that does not give rise to any reasonably arguable point of law. It was plainly open to the Employment Tribunal to conduct the case on that basis. Indeed, it is commonly the case that Employment Tribunals must proceed on the basis that statements, including lengthy statements, have been read by them and in this context it must also be remembered that the Applicant himself did give evidence and that he cross-examined witnesses of the employers for a considerable length of time.
28. Point B as a free-standing point is an allegation that the Employment Tribunal made findings of fact which either were not supported by any evidence or were perverse. As we have said, it is in fact linked to the point we have described as point A. In our judgment this ground of appeal does not raise any reasonably arguable point of law. Again, and although the boundaries between the points is not easy to defined, this conclusion does not mean that the Appellant does not have arguments relating to his breach of contract claims, and which are based on the correspondence and the documents, that errors were made, or adequate explanations were not given, by the Employment Tribunal.
29. However there is the added complication that we have concluded that there is a reasonably arguable point of law that the Employment Tribunal erred in law by not giving the Appellant an opportunity to be heard on the issues relating to compensation / remedy for unfair dismissal and there is an overlap between those issues and the "1997 breach of contract claim". In our judgment this complication means that there is a reasonably arguable point that because the Employment Tribunal took this course that not only should its conclusion as to (a) remedy / compensation for unfair dismissal not stand, but also that its conclusion in respect of (b) the "1997 breach of contract claim" that the Applicant was in repudiatory or fundamental breach of contract (see paragraph 14 of the Extended Reasons) should not stand. We have therefore concluded that Point C should be expanded to include a reference to the Appellant not being given the opportunity to be heard, or properly heard, on the issue whether as the Employment Tribunal concluded he was in repudiatory or fundamental breach of his contract of employment.
30. It follows that, in our judgment, this appeal cannot proceed on the basis of the points we have described as points A and B but that it should proceed on the other points, namely on:

(1) the grounds of appeal that in respect of both of the breach of contract claims: (a) the implied term relied on has been misexpressed and misapplied by the Tribunal, and further or alternatively (b) what is often described as a Meek point, namely that the Employment Tribunal have not given sufficient reasons to demonstrate to the parties why they have won or lost on those points, and

(2) Point C as altered in paragraph 29 namely that the Tribunal erred (a) in not permitting Mr Sears to make representations as to the compensation / remedy for unfair dismissal and he should be paid for unfair dismissal, and further or alternatively (b) in not giving Mr Sears the opportunity to be heard, or properly heard, on the issue whether as the Employment Tribunal concluded he was in repudiatory or fundamental breach of his contract of employment.

31. We therefore direct that the appeal should proceed on those grounds only. We give it Category B and a time estimate of two days.
32. We also will direct that there should be a directions hearing attended by the Appellant and the Respondents to be fixed through the normal channels. Prior to that hearing each side should notify the other as to:

(a) the documents they consider should be available to the Tribunal hearing this case, and

(b) a list of what they say are the central points in issue on the appeal because I think that may be a practical way of defining the issues more closely.

That directions hearing will deal with matters relating to the identification of a bundle for use by the parties and by this Tribunal of the final hearing, skeleton arguments and such other matters that occur to this Tribunal generally and to identify points to be argued at the full hearing.

33. We will also direct that, if practical, that directions hearing should be heard by the judge who will chair the Tribunal that hears the final hearing.