United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR R DAVIS (Solicitor) K E Davis & Sons Solicitors Warley Chambers Warley Road Hayes Middlesex UP4 0PU
For the Respondents	MR T CROXFORD (of Counsel) Lewis Silkin Solicitors Windsor House 50 Victoria Street London SW1H 0NH


 


MR JUSTICE BELL: This in an appeal by Mrs Devoy against the decision of the Employment Tribunal held at London (South) on 6th September 1999. The decision with extended reasons was promulgated on 27th October 1999. The Employment Tribunal rejected Mrs Devoy's claim that she had been constructively and unfairly dismissed by the respondent, deciding:

"The Applicant did not resign in response to a breach of contract by the Respondent and that the Applicant was not dismissed by the Respondent."

1. Section 94(1) of the Employment Rights Act 1996 provides that:

"An employee has the right not to be unfairly dismissed by his employer."

Section 95(1) provides, so far as is material to this case, that:

"… and 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."

Dismissal of the kind described in paragraph (c) is generally referred to as "constructive dismissal".

2. Mr Robin Davis, who has represented Mrs Devoy before this tribunal as he did before the Employment Tribunal, contends that the Employment Tribunal took the wrong approach in law to the question of whether Mrs Devoy had been constructively dismissed and that in any event its decision was perverse.
3. The necessary history, as found by the Employment Tribunal, is as follows:

"4.1 The Applicant was employed by the Respondent as a Payroll Administrator at Heathrow Terminal 1.

4.2 In January 1999 it came to the attention of Ms Deadman [the respondent's Human Resources Manager] that there appeared to have been two separate instances where confidential information relating to two employees' payroll details had been given to other members of staff in a short space of time. Both instances related to the grant of "Lieu days" in lieu of Bank Holidays where they have been off sick or given compassionate leave.

4.3 The incidents appeared to Ms Deadman to point to the Applicant who was invited to an investigatory meeting on 23rd January 1999. In accordance with the Respondent's Personnel Policies and Procedures the Applicant was accompanied by Joan Young. At the conclusion of the interview the Applicant was suspended on full pay pending further investigation.

Ms Deadman had other interviews with other personnel involved and a further investigatory interview on 2nd February 1999 with the Applicant.

The investigatory meeting was reconvened on 3rd February 1999. The Applicant was not told who had made the allegations against her and was not shown any witness statements (contrary to the Respondent's Personnel Policy and Procedures). The meeting was adjourned at 1.05pm and reconvened by Ms Deadman as a disciplinary interview at 1.30pm. The Respondent's Personnel policies and Procedures require that "At least 24 hours advance notice and the reason for the meeting must be given to the employee prior to any disciplinary interview"). The disciplinary interview lasted ten minutes.

At the end of the interview Ms Deadman told the Applicant she would be demoted to her previous position on the shop floor.

The Applicant asked for confirmation in writing. She did not receive this until after her resignation.

4.4 The Applicant went off sick immediately after the 3rd February meeting. The medical evidence submitted by the Applicant indicated she was suffering from "anxiety and depression". The Applicant remained off sick suffering from "anxiety and depression" (and was paid full sick pay in accordance with the Respondent's sick pay policy) until she resigned on 16th June 1999.

4.5 By letter dated 16th February 1999 the Applicant appealed against Ms Deadman's decision. Under the Respondent's Personnel Policies and Procedures an appeal requires "a full review of the whole case and not just a review of any new information".

4.6 Between 16th February and 16th June 1999 correspondence was exchanged between the Applicant and the Respondent.

In a letter dated 18th February the Respondent made it clear that "any time limits relating to the appeal process will not begin until you have returned to work".

The Respondent by letter dated 5th March made it clear that the Respondent did not think it appropriate for the Applicant "to attend an appeal hearing when you are clearly in an unfit state to attend work", that no change had been made to her salary or other terms of employment.

By letter dated 29th April the Applicant indicated to Mr Sowerby [the respondent's General Manager] that "the uncertainty concerning my position at work is contributing to my anxiety and depression I am unable to return to work until my position is resolved. As returning to work is a condition of the appeal process, clearly we have reached deadlock" and requested a personal meeting with Mr Sowerby.

On 5th May Ms Deadman wrote to the Applicant "to ask for your permission to approach your doctor for a medical report concerning your fitness and capacity to return to work".

On 10th May Mr Sowerby wrote to the Applicant confirming that "no changes have been made to your rate of pay nor your hours, on the department in which you work" and that "if you are medically unfit to come to work, then I cannot agree to overriding your Doctor's medical advice" and confirming that the Applicant's appeal would be heard when she was fit to return to work.

On 8th June Ms Deadman wrote again to the Applicant enclosing a copy of her letter of 5th May and asking the Applicant to make herself available to see a Doctor at the Occupational Health Centre".

On 16th June the Applicant wrote to Ms Deadman resigning forthwith on the grounds that "I have no further confidence in the company procedure".

The tribunal found at paragraph 4.7 of its extended reasons:

"The reason for the Applicant's resignation was solely the delay in hearing her appeal."

We should add to the facts which the tribunal found and which we have narrated, the common ground that the applicant did not respond to Ms Deadman's letter of 5th May 1999 but that there was a query as to whether she had received that letter. She did not reply to the request in 8th June 1999 letter that she make herself available for medical examination.

4. On 8th July 1999 Mrs Devoy presented an application in form IT1 dated 6th July 1999 to the Employment Tribunal. It did not describe the type of complaint in Box 1 but it ticked the compensation box in respect of unfair dismissal in Box 10. The Details of Complaint set out a brief history of events and finished by saying:

"On 17th June 1999 I resigned from my employment with the Respondent as they had failed to provide any information which allowed me to prepare my appeal or a date as to when the appeal was to be heard."

5. Having set out its findings of fact and summarised the parties' main submissions, the tribunal reasons dealt with the law in the following terms at paragraph 6:

"The law on constructive dismissal as established in the principles of Western Excavating (ECC) Ltd v Sharp is that:

1. There must be a breach of contract by the employer.

2. The breach must be sufficiently serious to justify the employee resigning, or else it must be the last in a series of incidents which justify the employee leaving.

3. The employee must leave in response to that breach and not for some other, unconnected reason.

4. The employee must not delay too long in terminating the contract in response to the employer's breach."

6. Finally, the tribunal set out its findings at paragraph 7 thus:

"In our findings of fact we have found that the Applicant resigned because of the delay in hearing her appeal. The first question we had to ask ourselves was therefore whether this constituted a breach of contract by the Respondent.

It was not suggested by either party that there was any provision in the written terms and conditions of employment concerning the position where an employee was off sick while a disciplinary appeal was pending. We were therefore left to consider the normal principles of contract law which we considered in the light of the principles enunciated (albeit in a different context) in Iceland Frozen Foods v Jones.

The question which we asked ourselves was whether the Respondent's decision not to convene the disciplinary appeal while the Applicant was certified as unfit to work on account of anxiety and depression but to delay it until she was fit to work was a course of action which fell within or without the band of reasonable responses which a reasonable employer might have adopted. In coming to our decision we bore in mind the responsibility which the Respondent had to the Applicant in relation to her health and safety (indeed we would have been very concerned whether it would have been reasonable to hold a disciplinary appeal while the Applicant was certified unfit for work due to anxiety and depression), that the Respondent was seeking to investigate the medical position, was continuing to pay the Applicant sick pay and had made it clear that the disciplinary appeal would be postponed until the Applicant was fit.

It is therefore our unanimous decision the Applicant did not resign in response to a breach of contract by the Respondent and that the Applicant was not dismissed by the Respondent."

7. In our view paragraph 6 of the decision is a fair summary of the effect of Western Excavating (ECC) Ltd v Sharp [1978] 1 QB 761 and [1978] IRLR 27. Western Excavating resolved what was at the time a clash of judicial opinion as to whether the test for the application of section 95(1)(c) was a contractual test depending on breach of contract by the employer or an unreasonableness test depending upon the employer's conduct being so unreasonable that the employee could not be expected to put up with it any longer. Western Excavating resolved that conflict in favour of the contractual test.
8. Yet, Mr Davis contends, as his first and most fundamental prong of attack on the tribunal's decision, the tribunal applied the reasonableness test to this case (see paragraph 7 of its reasons). He contends that the respondent's failure to convene an appeal against the disciplinary action taken against the appellant was a significant breach going to the root of the contract of employment. He did not in the Notice of Appeal or his skeleton argument allege that it was a breach of an express term of the contract.
9. In our view the tribunal was entitled to find that the reason for the applicant's resignation was solely [our stress] the delay in hearing Mrs Devoy's appeal. No doubt the tribunal had in mind the fact that Mrs Devoy did not leave in protest in early February 1999 after the procedural breaches of contract which occurred then; she left because of ill health and then followed the respondent's procedures by appealing. There was then a significant period of time until her resignation in the middle of June. Her more or less contemporaneous application to the Employment Tribunal said that she had resigned because of failures in the appeal process, which appears to have been a reference to the period between her 16th February notice of appeal and her 16th June resignation, rather than to events before that. The tribunal's decision in this respect was not perverse in our view.
10. It follows that for there to be a constructive dismissal in this case the delay in the appeal process which was the sole reason for her resignation had to be a significant breach of contract which entitled the appellant to treat herself as discharged from her contract of employment. That, in our view, is the effect of the Court of Appeal's approval of the contract test in Western Excavating. See Lord Denning MR description of the contract test at page 769A-C of the QB report.
11. For the purposes of constructive dismissal a term of contract broken by the employer may be an express term or it may be an implied term such as the portmanteau implied term of trust and confidence set out in Malik and Mahmood v BCCI [1998] AC 20. The test of breach of such an implied term is whether the employer has acted in a manner calculated or likely to destroy or undermine the relationship of trust and confidence. While that test is contractual the question of whether the employer has acted reasonably is not wholly irrelevant. As Mr Thomas Croxford has submitted on behalf of the respondent, it may be of evidential value in deciding whether there has been a breach of the portmanteau implied term of mutual trust and confidence by the employer and it may be of evidential value in deciding whether any breach of a term of the contract of employment by the employer is a sufficiently serious breach to entitle the employer to treat herself as discharged. See Harvey, Section D1, paragraph [423] and Dutton and Clark Ltd v Bailey [1985] ICR 780. Further still in our view, nothing in Lewis v Motorworld Garages Limited [1985] IRLR 465 gainsays, as Mr Davis' skeleton argument appeared to suggest it did, the need for a breach of contract which entitles the employee to treat herself as discharged and which she does treat as discharging her. That case is authority for the proposition that although the last act of conduct of the employer which drives the employee away need not in itself amount to a breach of contract, if it is properly to be taken with earlier matters including any earlier breaches of contract and those matters taken together amount to a sufficiently serious breach of the implied term of trust and confidence to amount to constructive dismissal. See Glidewell LJ at paragraph 36 on page 469 of the IRLR.
12. Did the Employment Tribunal go wrong in this case? Did it misdirect itself as to the relevant law or make a finding of fact for which there was no supporting evidence or which no reasonable tribunal could make?
13. The tribunal, as we have already indicated, set out the correct contract test of constructive dismissal at paragraph 6 of its reasons. As we have already said it was entitled to find that the reason for the appellant's resignation was solely the delay in hearing her appeal. Since it took it to be conceded by Mr Davis that that matter was not a breach of any express terms of the appellant's contract of employment, the tribunal was left to consider whether it was a breach of the portmanteau implied term of mutual trust and confidence. In our view that is what the tribunal meant when it said that it was left to consider the normal principles of contract law. The tribunal chose to judge the question of whether there was a breach of the implied term in the light of the principles in Iceland Frozen Foods v Jones [1982] IRLR 439. The tribunal acknowledged that the judgment in that case was in a different context, as indeed it was, because Mr Jones had been summarily dismissed and the question was the approach of the tribunal to whether his dismissal was unfair and in particular to whether the employer had acted reasonably or unreasonably in treating the reason for dismissal as a sufficient reason for dismissal. But the tribunal in the present case obviously thought that in the circumstances of the present case the question of whether the respondent had acted reasonably in holding back the appeal until the appellant was fit to work was that the most useful question to ask itself when judging whether the delay put the respondent in breach of the implied term and to such a serious degree as to justify the appellant's resignation.
14. In our view, the tribunal was entitled to take that approach and to come to the decision, as it clearly did, that the respondent acted reasonably and was not in breach of the portmanteau implied term of mutual trust and confidence.
15. Had the matter rested there, in our view, this appeal would be bound to fail. This morning, however, at the beginning of the hearing of the appeal, Mr Davis told us that Mrs Devoy's appeal was pursued on basis that the respondent's delay in hearing her appeal was a significant breach of an express term of her contract and that that had been her case before the Employment Tribunal contrary to the statement in the tribunal's reasons that:

"It was not suggested … that there was any provision in the written terms and conditions of employment concerning the position where an employee was off sick while a disciplinary appeal was pending."

16. Mr Davis referred us to Clause 7.6 of the respondent's Personnel Policies and Procedures, incorporated in the appellant's contract of employment:

"Appeals must be heard as soon as is practicable after the receipt of the formal appeal letter."

Without doubting Mr Davis' good faith, we initially had some difficulty in accepting that this term was raised before the Employment Tribunal since there was no reference to it in the tribunal's decision or in the Notice of Appeal or in Mr Davis's skeleton argument. On further enquiry, however, it appears to us that the most likely explanation is that Mr Davis did refer to the express provision in Clause 7.6 conceded and argued that Mrs Devoy's illness was of no relevance to the question of whether it had been practicable to hear her appeal before she resigned in June 1999. In that sense, the express term in Clause 7.6 did not, in Mr Davis' submission, provide for or concern "the position where an employee was off sick while a disciplinary appeal was pending." Mr Davis sustained that argument before us. He contended that "practicable" meant simply "capable of being done, feasible" and that it was "practicable" in that sense, to be distinguished he argued from "reasonably practicable" or "reasonable", for Mrs Devoy's appeal to be held well before June 1999. All that had to be done, Mr Davis submitted, was to fix a date for the hearing of the appeal. Illness, however severe, could not affect that, even if the employee was too ill to make any contribution to the appeal. So it was quite wrong of the Employment Tribunal to concern itself with what was "reasonable" and in particular whether delay from February to June 1999 was reasonable. Mr Davis contended that if the tribunal had asked itself whether it was practicable to hear Mrs Devoy's appeal before June 1999 the answer must have been in the affirmative and that failure to do so amounted to a serious and fundamental breach of contract on the part of the respondent which justified Mrs Devoy in leaving, hence constructive dismissal which, Mr Davis argued, was unfair. Mrs Devoy's claim should have succeeded. Even if we could not go that far, Mr Davis submitted that the tribunal had erred in failing to grapple with Clause 7.6 and in applying the wrong test and that the matter should be remitted to the Employment Tribunal to apply the correct test.

17. In our view, the express term in Clause 7.6 is competent to cover circumstances where an employee is ill. It is an umbrella term which bears on any situation where circumstances are said to make it impracticable to hear an appeal. Such circumstances may [our emphasis] cover for instance, illness of some essential party or witness or absence of abroad or lack of ability to trace such a person. In all those circumstances, the employer and the Employment Tribunal if complaint is made, must consider all the potential irrelevant circumstances to see whether the term is complied with or broken. The word "practicable" is not to be taken to mean simply "capable of being done". We would adopt what was said by May LJ in Palmer and Saunders v Southend-on-Sea Borough Council [1984] I All ER 945, [1984] IRLR 119, [1984] ICR 372. By the time of that case the words "reasonably practicable" had been substituted for "practicable" in the statutory provisions relating to extension of time for presentation of claims for unfair dismissal. May LJ said at page 384H of the ICR report:

"… we think that one can say that to construe the words "reasonably practicable" as the equivalent of "reasonable" is to take a view too favourable to the employee. On the other hand "reasonably practicable" means more than merely what is reasonably capable physically of being done – different, for instance, from its construction in the context of the legislation relating to factories … In the context in which the words are used in the Employment Protection (Consolidation) Act 1978, however ineptly as we think, they mean something between these two. Perhaps to read the word "practicable" as the equivalent of "feasible" as Sir John Brightman did in Singh v Post Office [1973] ICR 437 NIRC and to ask colloquially and untrammelled by too much legal logic – "was it reasonably feasible to present the complaint to the industrial tribunal within the relevant three months?" – is the best approach to the correct application of the relevant subsection."

In our view that approach is a good working approach to the meaning and application of the word "practicable".

18. It follows that the tribunal erred and misdirected itself in taking the course which it did in asking whether the respondent acted reasonably in this case in not hearing the appeal by June 1999, although we hasten to add that we understand why they did so because of what we interpret as confusion as to the applicability or otherwise of Clause 7.6 as an express term of the contract.
19. Misdirection does not necessarily mean that this Appeal Tribunal must allow the appeal against the decision of the Employment Tribunal which has misdirected itself. In the case of Dobie v Burns International Security Services (UK) Ltd [1994] ICR 812 and [1984] IRLR 329. At 818G of the ICR report, Sir John Donaldson MR, said:

"Once you detect that there has been a misdirection, and particularly that there has been an express misdirection of law, the next question to be asked is not whether the conclusion of the tribunal is plainly wrong, but whether it is plainly and unarguably right notwithstanding that misdirection. It is only that it is plainly and unarguably right notwithstanding the misdirection that the decision can stand. If the conclusion was wrong or might have been wrong, then it is for an appellate tribunal to remit the case to the only tribunal which is charged with making findings of fact."

20. In this case Mr Croxford submitted that even if the Employment Tribunal had asked itself whether the respondent was in breach of the express term in Clause 7.6 its answer must inevitably have been that it was not in breach because it could not sensibly be said that it was practicable to hear Mrs Devoy's appeal before she resigned in June 1999. His submission amounted to this, that it was not reasonably feasible of the respondent to put through a disciplinary appeal an employee who was suffering from stress and anxiety when the employer did not know the extent of the stress and anxiety and could not discover it because of lack of response to requests for a medical examination, and when an appeal might make things worse for Mrs Devoy. He said that an appeal was not feasible in those circumstances even when, as in this case, Mrs Devoy was asking that the appeal should go ahead nevertheless.
21. There may well be some force in that submission and it might very well have been that had the tribunal asked itself whether or not it was practicable in the sense of reasonably feasible to hear Mrs Devoy's appeal by the time she resigned in June 1999, the tribunal's answer would have been "no", but after considerable reflection and debate between us, the three members of the tribunal, we have come to the conclusion that in the light of the extent of the misdirection of the tribunal, explained as it clearly is by the confusion of the application of Clause 7.6, we cannot say that the tribunal's ultimate decision in this case was plainly and unarguably right, notwithstanding the misdirection.
22. In those circumstances, we consider that the only proper course is to allow this appeal and to remit the matter to the Employment Tribunal for a further hearing. We will hear submissions on the extent of that further hearing and whether it can or should be by the Employment Tribunal constituted as it was on 6th September 1999 or by a fresh tribunal.
23. Having heard argument upon the nature and extent of the remission to the Employment Tribunal, we direct that the matter be further heard by the same tribunal if possible. The extent of the remission to the Employment Tribunal is to decide whether the respondent was in breach of the express term set out Clause 7.6 of the respondent's Personnel Policies and Procedures, namely that:

"Appeals must be heard as soon as is practicable after the receipt of the formal appeal letter."

and to decide whether if the respondent was in breach of that express term the nature of the breach was sufficiently serious to amount to constructive dismissal.

24. It is with the extent of the remission in mind that we think it particularly important that the matter is heard by the same tribunal if possible. What is not palatable is that it be heard by a tribunal of which one or two members were members of the original tribunal, it must be all three members, or a fresh tribunal. To have the matter heard by a tribunal which includes one or two members, only, of the original tribunal would lead to the risk of undesirable conflicts of view of the facts.
25. Mr Croxford has applied for leave to appeal against our decision on the basis that we have implicitly given leave to the appellant to raise a new point which did not appear in the Notice of Appeal and indeed did not appear in Mr Davis' skeleton argument. That is so, but in our view the difficulty arose out of confusion over the relevance if any of the express term in Clause 7.6, and it appears from the respondent's solicitor's letter of 24th November 2000 that the respondent was aware that Clause 7.6 had seen the light of day before the tribunal. It seems to us to be unreal to ignore an express term which was, in our view, directly relevant to the original application and which is directly relevant to this appeal. Mr Croxford also asked for an order for costs on the grounds of unreasonable conduct of the proceedings. We make no order for costs. We consider that there has been an element of confusion and that this case does not fall into the narrow category of exceptional circumstances where an order for costs is appropriate in this kind of matter.