United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR ANDREW HOGARTH (of Counsel) Instructed By: Messrs Carrington & Associates Solicitors 1 New Square Lincoln's Inn London WC1A 3SA


 


MR RECORDER BURKE QC:

1. This is the preliminary hearing of the employers' appeal against the decision of the Employment Tribunal sitting at Reading, chaired by Mr Hollow and promulgated with Extended Reasons on 12 August 2000. The employee was employed by the employers from April 1995 until 12 November 1999 as Operational Director of the employers' nursing home at Godalming, Ascot and Fareham. It seems that there were initially two nursing homes, a third being subsequently added.
2. The Tribunal found that the employee enjoyed a position of considerable seniority in the respondents' organisation (by the respondents of course, the Tribunal was referring to the employers, the appellants today) and that there could be no doubt that her position required that there should be a great degree of trust between herself and her employers. Her salary was one of £43,500 a year together with a £10,000 bonus, which was indicative, thought the Tribunal, of her seniority. She claimed that she had been unfairly dismissed, the dismissal alleged being a constructive dismissal. The employers contended that there had been no dismissal and that the employee had voluntarily resigned. The Tribunal found that the employee was responsible for the overall running of the nursing homes with the exception of matters of finance and maintenance which were dealt with by Dr Colville, who was the Medical Director of the appellants and who was the employee's superior. The payroll and pay administration were dealt with by the company's external accountant, a Mr Young.
3. The principal facts found by the Tribunal can be simply set out. The employee, on 4 November 1999, expressed to Mr Young's personal assistant her concern that Dr Colville might have lost confidence in her and her ability to do her job; and she mentioned that she might resign. She did not do so. She repeated those misgivings on the next day to Mr Young himself. The Tribunal found that at that stage Dr Colville had said nothing to the employee to suggest that he had lost confidence in her.
4. Within the next day or two, the matrons at two of the nursing homes told Dr Colville that they had a number of complaints about the employee. On 10 November, they presented a long list of their complaints about the employee to Dr Colville and Mr Young. As a result, Mr Young met the employee on 12 November in the light of her expressions of concern and of the meetings with the matrons on 10 November. The employee's description of what was said at that meeting on 12 November was that Mr Young told her that she could resign and, if she did, her resignation would be accepted; but, if she did not, she would be suspended, disciplined and sacked. In other words, on her version, this was a classic "resign or be sacked" case. Mr Young's account was different. He said that he had told the employee that there had been a number of complaints and that Dr Colville was going to investigate. He told her, he said, that, if she resigned, that would be accepted but, if she did not, it was possible that she would be suspended and there would have to be an investigation. The employee asked Mr Young whether there had been a loss of confidence in her on Dr Colville's part. Mr Young said that Dr Colville had lost confidence in her.
5. The employee later that day left and did not return; she complained a few days later (to use the words in which the Tribunal describe what she was saying), that she felt that she had been sacked.
6. The Tribunal preferred Mr Young's version and found the facts accordingly. Having thus found the facts, the Tribunal correctly directed itself to consider whether the conduct of the employers amounted to a fundamental breach of the implied term in the contract of employment of trust and confidence. Having thus directed itself (and we should point out that it does not say expressly that it was giving itself that self direction but it is clear from the way in which it sets out the decision that it had so directed itself) it came to the conclusion in the context of her seniority and the need for a great degree of trust between the employee and her employers that, had all that had happened had been that Mr Young had said that there had been complaints which would have to be investigated, there would have been no breach of contract; but that matters had proceeded further; Dr Colville had been said by Mr Young to have lost confidence in the employee; and that that remark, in the context which we have described, together with the notification that there had been a number of complaints against her, amounted to a fundamental breach of the implied term to which we have referred. Thus, they concluded, there had been a dismissal. It is not clear whether there was any dispute at the hearing as to whether or not, had there been a dismissal, it was a fair dismissal or not. The only issue which we have been asked to look at is whether or not there was a dismissal, i.e., a constructive dismissal, the Tribunal's conclusion that there was being the issue which the employers now seek to raise by way of appeal.
7. Mr Hogarth, on behalf of the appellants, has put the matter before us broadly in two ways. First of all, he submits that it is not enough for a Tribunal to look to see whether there has been a fundamental breach of the implied term to which we have referred. It must in its decision set out the standards of behaviour which can amount to a fundamental breach and, he submits, there can only be such a fundamental breach if the employer has acted in bad faith or has acted perversely. He supports that submission by reference to the decision of Mr Justice Burton sitting in the Queen's Bench Division, in a case called Clark v Nomura International plc [2000] IRLR 776, decided on 6 September 2000. He also refers us to a subsequent case in which Clark v Nomura and the authorities referred to in Clark v Nomura were either wholly or to a large extent cited, namely, Hayes & Skinner v Manor House Health Care, a decision of this Appeal Tribunal presided over by His Honour Judge Clark on 16 October 2000. Clark v Nomura was a case about the payments of bonus. The employers had a discretion as to whether or not to pay a bonus; and the central issue appears to us to have been whether there were, and if so, to what extent there were fetters implied by law upon what, on the face of it, was in the employers' hand a complete discretion as to whether or not the bonus should be paid. Mr Justice Burton decided that the discretion was not unfettered and that it was fettered by law in the sense that the employer was not under an obligation to act reasonably in the exercise of his discretion but that he was under an obligation not to act on the basis of irrationality or perversity. In Hayes v Skinner the issue was similarly about the fetters on the employers' discretion in respect of the payment of a bonus. This Appeal Tribunal concluded, at paragraph 27 of the judgment, that the discretion vested in the employer not to pay a bonus must be exercised in good faith and not capriciously.
8. It is on these two cases that Mr Hogarth founds, arguing that unless there is some restraint upon the otherwise apparently broad approach that a Tribunal is able to make in its assessment of whether or not there has been a fundamental breach of the term of trust and confidence, that there is a risk, exemplified by this case, that a Tribunal will go back to the state of the law as it was before the well-known decision in Western Excavating v Sharpe [1978] ICR 221 in which Tribunals were entitled to ask themselves, irrespective of whether there was a breach of contract, simply whether the employer's behaviour was or was not reasonable.
9. In our judgment, even at this preliminary stage, this argument is not one which is sufficiently arguable to go forward for a full hearing. The two cases on which Mr Hogarth has founded his submission are, in our view, on different albeit allied subject matter. The restrictions which the law imposes on what otherwise is a broad contractual discretion are not the same, necessarily or otherwise, as the restrictions which are to be considered by a Tribunal in a case of constructive dismissal.
10. It seems to us that the law which applies to a constructive dismissal case is quite clear. The cases of Woods v W M Car Factors (Peterborough) Limited [1982] ICR 693 and Pedersen v Camden London Borough Council [1981] ICR 674, establish that it is for the Tribunal to consider whether there has been a breach of the implied term of trust and confidence by the employer and whether such breach is fundamental. If it asks itself those questions then thereafter its answers to those questions are answers which are findings of fact. If there is evidence to support the findings of fact which the Tribunal makes then it is not for this Appeal Tribunal to intervene.
11. We do not see any arguable basis for imposing, on what we regard as settled law, a further gloss that there can only be a constructive dismissal, in circumstances in which what is alleged is a breach of the implied term of trust and confidence, where the employer has acted in bad faith or perversely. We have asked Mr Hogarth whether there is any authority which so says in the context of constructive dismissal as opposed to the different context of discretionary bonus payments; Mr Hogarth, despite his sterling submissions to us, has not been able to refer us to any such authority.
12. The second way in which Mr Hogarth puts this case is that the Tribunal have failed to take into account not only the need to find out a bad faith or perversity with which we have dealt but also the fact that the employers did not simply tell the employee that Dr Colville had lost confidence in her, they were only responding to a question which she had asked and it behoved them to respond to the question truthfully.
13. We can see that that is an argument which could have been put, should have been put and probably was put by those representing the employers before the Tribunal; but it is an argument of fact. It cannot be said, that as a matter of law, a remark made by an employer which may be regarded by a Tribunal as amounting to a serious breach of the implied term of trust and confidence must lose that characterisation simply because it is made in answer to a question. All matters as to what was said on 12 November, how it was said and why it was said, are matters of fact which the Tribunal undoubtedly considered.
14. We have no doubt that the employers regard the decision against them on the dismissal issue as harsh; and if our view were relevant that we might have expressed the same view; but our view is entirely irrelevant once it is clear that the Tribunal, in deciding whether there was or was not a fundamental breach of the implied term, was arriving at a decision on the facts and once it is clear that there was evidence on which they could find as they did. Plainly there was evidence on which they could find; we have not understood Mr Hogarth to submit to the contrary.
15. Accordingly it appears to us that the grounds of appeal which are put forward are not arguable; and for these reasons this appeal is dismissed.