United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR O OGUNNOWO (Solicitor) City Legal Associates Wickham House 10 Cleveland Way London E1 4TR
For the Respondents	MISS S MACKIE (of Counsel) Messrs Picktons Solicitors 60 London Road St Albans Hertfordshire AL1 1NG


 


MR JUSTICE MAURICE KAY: This is an appeal from an Employment Tribunal, sitting at London (North) on 14th June 1999.

1. The appellant was an onboard parking attendant with the respondents from 27th June 1994 until 4th August 1998. He claimed unfair dismissal. His case was that he had been constructively dismissed.
2. The decision of the Employment Tribunal was that he had not been dismissed at all and that therefore his claim of unfair dismissal failed.
3. The issue before us has been whether the finding that there was no dismissal was correct in law. We refer first to the findings of fact and set them out as listed by the Employment Tribunal.
4. They began with a reference to an earlier incident in July 1997 which was and is not material to our task and so we pick up the findings of fact at (ii):

"(ii) the Applicant was employed by the Respondent to work under a contract with Kensington Council. Paragraph 7.3 of Kensington Council's conditions of contract with contractors provided as follows:

"The authorised officer shall be entitled, but not unreasonably or vexatiously, to require the contractor, by notice in writing, to remove from the provision of the Service any employee of the contractor specified in such notice including the contract manager. The contractor shall forthwith remove such employee from the provision of the Service and shall as soon as practicable thereafter provide for a replacement if necessary."

(iii) In pursuance of that contract condition, on 23 September 1997, Kensington Council required that the Applicant should no longer serve in the capacity of parking attendant in the Kensington Council area. On 9 April 1998, following the end of the job the Applicant had performed from September 1997 to April 1998, off the street, processing photographs of impounded cars, Kensington Council required that the Applicant should not be employed in any capacity on the Kensington and Chelsea contract.

(iv) Following the April requirement from Kensington Council there was an amicable discussion between the Respondent and the Applicant on 11 June regarding possible transfer opportunities out of the Kensington Council area. No transfer was decided upon.

(v) The meeting on 11 June raised suspicions in the mind of the Applicant's manager, Mr Caplin, regarding the Applicant's integrity, where before that point Mr Caplin had given the Applicant the benefit of the doubt when queries were raised about his performance of his parking attendant duties. Mr Caplin conducted an investigation and concluded that there was a case of misconduct for the Applicant to answer. The Applicant was thereupon suspended on 8 July 1998 and investigative meetings occurred on 10 July, 13 July, 14 July, and 29 July, plus the Applicant failed to attend proposed meeting on 17 and 23 July.

(vi) Those meetings did not help the investigation process forward materially because the Applicant refused to co-operate. From the outset of the meeting on 10 July the Applicant announced that he regarded the situation as one of constructive dismissal.

(vii) The Respondent's holding of a series of investigative meetings was somewhat cumbersome given the Applicant's clear determination from the outset not to co-operate. However the Tribunal was satisfied that these were fact finding investigative meetings, not disciplinary hearings in breach of the Respondent's disciplinary procedure.

(viii) The Applicant and his representative at the hearing also made much of the Respondent's failure to put allegations in writing and to give the Applicant evidence to take away and consider. The Tribunal concluded that the disciplinary investigation would have been helped by a full a clear statement of the allegations on paper. However there were understandable reasons for the Respondent to be wary about releasing sensitive information on car registration and tax details plus parking infringements. The material was available in Mr Caplin's office for the Applicant to have studied. The Applicant never attempted to do so. Further the material was familiar to the Applicant in that it was predominantly notes prepared by himself, either manually or on husky.

(ix) The Tribunal concluded that there was no actual decision to move the Applicant to another contract, Richmond or elsewhere. Nor was there an actual decision that his salary would be reduced. In the letter of 4 August these were clearly proposals not actual decisions. The Applicant's views were being asked for before a decision was arrived at. The Applicant chose to resign rather than giving his views on these proposals."

5. The reference to a letter of 4th August is a reference to a letter written on that date by Mr Parkinson, the personnel manager of the respondents, to the appellant. It is a letter which dealt with two separate matters. The first was the latest stage of the investigative or disciplinary proceedings which were underway. The second was as to the future of the appellant's employment regardless of the outcome of those investigative or disciplinary proceedings. It is a letter which has assumed considerable importance in relation to this appeal and it is necessary for us to set out in full:

"Re: Disciplinary Hearing

You were required to attend a disciplinary interview on Wednesday 29th July 1998 to assist us in our investigation into allegations made against you concerning falsification of records.

This was the third attempt to conduct this investigation. Regrettably, although you attended the interview you played no constructive part in assisting Mr Caplin in the matter and left saying that you had no confidence in the sitting.

The only reasonable conclusion that Mr Caplin can come to on the basis of what he knows so far is that for whatever reason you have deliberately falsified the records as shown at the interviews.

There may be a completely different and entirely innocent explanation for what has happened but if you do not give it to us then we can only proceed upon the basis of what we know.

In any event we intend to proceed to a disciplinary hearing which will be conducted by David Caplin and Darren Liddy on 10th August 1998 at 2.00pm. This will be held at the South site at Verney House. At that hearing they will consider the allegations against you and if they are found to be proved will also decide what disciplinary measures should be taken. I invite you to attend the hearing with a work colleague to put forward your side of the story both as to what is alleged and also if it is found to be proved what disciplinary measure is appropriate. I should warn you that deliberate falsification of Company records is regarded as being a serious matter and could lead to your dismissal. You are therefore strongly advised to take this seriously.

As an entirely separate issue, I should tell you that our client, the Royal Borough of Kensington and Chelsea have decided that they no longer wish you to work on this contract. We therefore have to place you elsewhere if indeed Mr Caplin and Mr Liddy decide that your contact should not be terminated.

You currently hold the position of On Board Parking Attendant. There is no similar job available at the Richmond contract and our proposal is to move you to the Richmond contract in the job of Parking Attendant. This will involve a reduction in your salary of approximately £600 per annum. I emphasise that this proposed move is not a disciplinary measure but arises simply because of the insistence of our client that you be taken off their contract. It is possible that in the alternative that we would move you to the Bexley site but again this would have to be in the capacity as Parking Attendant. If in the future a similar position arises within these two contracts we will notify you forthwith.

Before deciding whether you should be moved and if so where to I would like your observations on this and I would be grateful if you would address them to me rather than to Mr Caplin or Mr Liddy.

Nevertheless, I felt it appropriate to bring this subject up now so that you should know where you stand in relation to your employment with this Company. It effectively amounts to a proposal from us to change your existing terms and conditions of employment."

6. The appellant had no further dealings with the respondent after that letter beyond indicating that he was leaving and considering himself to have been constructively dismissed.
7. The conclusion of the Employment Tribunal is at paragraph 11 of the Decision and is set out in the following paragraphs (i) to (iii):

"(i) There was no actual decision to transfer the Applicant to another job in another borough or to reduce his earnings. At law the circumstances did not amount to an actual or anticipatory breach of contract.

(ii) There was a degree of potential unfairness in the failure to provide the allegations against the Applicant in writing and in not volunteering move overtly the evidence to support those allegations. However that was a procedural weakness which did not at law amount to a fundamental breach of contract.

(iii) It follows that the first requirement of Western Excavating (EEC) v Sharpe [1978] for an actual or anticipatory breach of contract by the employer was not satisfied. Therefore at law there was no dismissal.

In these circumstances the Tribunal did not need to go on to consider the reason for dismissal or the fairness of dismissal."

8. In short, the Employment Tribunal had acceded to the submission that had been made on behalf of the respondent which was concisely expressed in the expression "the Applicant walked too soon to establish a breach".
9. We now turn to the legal principles which are relevant to the present appeal. In order to claim unfair dismissal an employee must establish that he had been dismissed. This, of course, includes the concept of constructive dismissal. By s.95(1)(c) of the Employment Rights Act 1996 it is provided that:

"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 contract."

10. It is pertinent to refer to the authority of Western Excavating (ECC) Ltd v Sharpe [1978] IRLR 27 which was mentioned by the tribunal. In the course of his judgment in that case, Lord Denning MR said at page 29 at paragraph 15:

"… 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 as 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. …"

The principles are clear. We have to consider their application by the Employment Tribunal in the present case.

11. We consider first the construction of the letter of 4th August. As we have indicated the tribunal concluded that that letter manifested no actual decision to transfer the appellant or to reduce his earnings. We have considered the letter in the context in which it was written and we have had regard to its terms. We do not agree with the construction of it which the Employment Tribunal arrived at. We observe that when three of our colleagues considered this case on a preliminary hearing on 9th December 1999, the judgment of the Employment Appeal Tribunal, given on that occasion by His Honour Judge Pugsley, said of this finding of the Employment Tribunal:

"4. Although the Tribunal found that those were clearly proposals, we have some difficulty in seeing how [they] can be regarded solely as a proposal.

We this it is at least arguable to say no more than that this is a statement of a decision which has been taken rather than a proposal and that might provide a rather different complexion on that facts found by the Tribunal. …"

That was of course simply expressing a provisional view as to what was arguable.

12. We have heard arguments from both sides and we are entirely satisfied that the view expressed by our colleagues on 9th December 1999 is the correct one. We simply cannot see how any Employment Tribunal could find that there had been anything other than a decision as to the future of the appellant's employment in the Kensington and Chelsea area. In our judgment, on that issue, the letter is unequivocal. Kensington and Chelsea had made a decision, exercising their contractual rights, and as a result the respondents had decided that the appellant would no longer be able to work in Kensington and Chelsea. It is simply erroneous to conclude or infer that they were advancing a proposal to that effect. It is true that they were evincing some conditional negotiability as to where the appellant might work instead of Kensington and Chelsea, but what was clear was that, in any event, it would be in a different area in reduced capacity and at a significantly lower pay.
13. On behalf of the respondent, it is suggested that a move, whether to Richmond or Bexley or anywhere else in the London area, would have been within the contract of the appellant and that neither the proposed moves nor the proposed reduction in salary would amount to any breach, let alone fundamental breach, on the part of the respondent. We not agree with those propositions.
14. There is some documentary uncertainty about the employee's contractual position. A document headed "Statement of Main Terms of Employment" is in blank and no document specific to the appellant had been produced. Even that document states on its face that it "should be read in conjunction with your letter of appointment". We have not seen such a letter. Moreover, the Statement simply states that the job "includes such duties as may be reasonably associated with this position". The position being described as "Parking Control Officer".
15. It may be significant that in the course of making their findings of fact the Employment Tribunal stated that the appellant was employed by the respondent to "work under a contract with Kensington Council". It is suggested on behalf of the respondent that that was not intended to be indicative of a contractual term limiting the employment area to the area covered by the Kensington Council, but we have doubts about that. In the end, however, it is not crucial to the conclusion to which we have come.
16. In our judgment, the position arising from the letter dated 4th August could only be construed in one way. Leaving aside the investigative or disciplinary proceedings, the letter shows quite clearly that it had been decided by the respondent, following the demand of Kensington and Chelsea, that the appellant would no longer be employed in the area covered by the Kensington Council. What was being put forward by the respondent was the possibility of a move to a different area, doing a lesser job, at a significantly lesser salary. In our judgment, the inevitable construction of that is that this was an anticipatory fundamental breach of his contract. In those circumstances, as a matter of law, he was entitled to treat himself as constructively dismissed and to terminate his employment in the manner in which he did.
17. Accordingly, on that point alone, this appeal must be allowed. We shall substitute a finding that the appellant was dismissed within the meaning of s.95(1)(c) of the 1996 Act. The matter will have to returned to a differently constituted Employment Tribunal for a consideration of whether, in all the circumstances, this was fair or unfair dismissal. It will be noticed that our conclusion is based on the letter of 4th August. We record that an alternative submission was made on behalf of the appellant, namely that procedural deficiencies in relation to the investigative or disciplinary proceedings also amounted to a fundamental breach of his contract of employment, which would have enabled and did justify him in treating the contract as at an end in circumstances of constructive dismissal.
18. The unwillingness of the respondent to specify the allegations in a document was, in our view, regrettable. They were detailed, related to documents and to events a considerable time before the discussion that were taking place in the Summer of 1998. The respondent did not fail to comply with its own disciplinary procedures. It may be that the failure to specify and particularise the allegations could be viewed as a breach of contract. However, it is unnecessary for us to decide that point. Certainly the procedural deficiencies or weaknesses may be relevant to the fairness or unfairness or the dismissal. We say no more about that at this stage. The matter will simply have to be reheard by a differently constituted Employment Tribunal so that the fairness or unfairness of the dismissal can be determined.