United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MS BEVERELY ROBERTS (of Counsel) Messrs HS Kane & Co Solicitors 24A Longbridge Road Barking Essex IG11 8RT
For the Respondent	Mr Jaspaul Dubb (Representative) First Business Support Southern Area Office 33 Old Woking Road West Byfleet Surrey KT14 6LG


 


MR RECORDER BURKE QC

The Appeal

1. In this case the Appellant, Mr Roworth, appeals against the decision of the Employment Tribunal sitting at Stratford, chaired by Miss Lester and sent to the parties on 17 August 1999, that his claim against the Respondents, his employers, that he had been constructively dismissed, failed. The Tribunal also found that a sum of money was owed by the Respondents to the Appellant under the contract of employment. That part of the Tribunal's decision is not challenged.
2. At the Preliminary Hearing of this appeal, heard by a different division of this Employment Appeal Tribunal on 21 February 2000, the Appellant was permitted to proceed to a Full Hearing of his appeal on 2 grounds only. Those grounds are, in effect:

(1) that if the Tribunal found that the Respondents were guilty of repudiatory conduct no later than October 1998, they ought to have found that there was subsequent repudiatory conduct up to December 1998 or, as it has been put to us alternatively today, that the repudiatory conduct occurred in December rather than October 1998.

(2) that the Tribunal's conclusion that the Appellant affirmed the contract of employment by not resigning until March 1999 after the employer's earlier repudiatory conduct was wrong in law or perverse.

3. In giving judgment at the Preliminary Hearing the Employment Appeal Tribunal hinted that the Respondents might wish to cross-appeal the Tribunal's conclusion that there had been a repudiatory breach of contract. By their notice of cross-appeal, the Respondents have taken up that hint and seek to attack that conclusion.
4. Hence the 3 areas of dispute canvassed before us have been:

(1) Were the respondents guilty of repudiatory breach of the contract of employment?

(2) If they were, when and over what period was such breach committed?

(3) Were the Tribunal right to conclude that the Appellant had affirmed the contract of employment?

5. The Facts

The basic facts in this case are straightforward. The Appellant started work for the Respondents, who import and process steel, as a slitting line operator in March 1994. The Tribunal expressly found that his job included lifting and carrying heavy materials. Miss Roberts, in the course of her submissions on behalf of the Appellant, suggested that that finding was in error; but she accepted that she could not, in the absence of a ground of appeal based on the perversity of that finding, go behind that finding.

6. From 1996 to May 1998 the Appellant was absent from work for substantial periods due to serious illness. He had an operation in 1998 and was on sick leave again from 11 May of that year. He never returned to work for the Respondents although he sent in regular medical certificates. By October 1998, as the Tribunal found, the Appellant's general practitioner had written, that the Appellant should be able to go back to work but not to his normal duties. He required light work, which did not involve heavy lifting, but none was proposed by the Respondents. There was a meeting on 22 October at which, according to the Tribunal's findings, the Respondents would not allow the Appellant to return until fit for his normal duties, which the Tribunal found involved heavy lifting. At a further meeting on 10 November, the company secretary, Mr Fletcher, said that the Respondents would wait for a medical report from the Appellant's consultant, who was due to see the Appellant on 23 December; and indeed the Respondents wrote on 12 November to the general practitioner asking if the appointment with the consultant could be accelerated. Meanwhile, the Tribunal found, the Appellant continued to ask for lighter duties but was refused. Whether the Tribunal took the view that he was so refused because there were no lighter duties, or because the Respondents did not want even to try to find lighter duties and simply insisted that he came back to his ordinary duties does not appear, either expressly or by implication, from the Tribunal's decision.
7. The Tribunal said, in paragraph 6 of its decision, that it had no evidence about subsequent developments in respect of medical appointments or reports. It is one of the strange features of this case that neither side, in the course of the 2 day hearing before the Tribunal, appears to have given any evidence, or to have been asked any questions, as to what it had done in relation to the obtaining or chasing up of the medical report. No medical report was before the Tribunal. Neither party to this appeal has suggested that any report was available at the time of the hearing.
8. The Tribunal found that, late in 1998, and we have been told and accept that this was a reference to what happened in December of that year, the Appellant was in financial difficulties and needed to obtain social security benefit. There was by this time no contractual sick pay available to him; he had run out of contractual sick pay back in July and was therefore not only not going to work but was also receiving no money from the Respondents. He was receiving only statutory sick pay. In these circumstances there was a discussion between him and the Respondent's production manager, Mr Dealtry. The Tribunal found that the Appellant asked Mr Dealtry to get rid of him so that he could put in a claim for benefit. Mr Dealtry offered the Appellant 6 weeks pay plus some holiday pay if he resigned. The Appellant took legal advice and was advised that everything should be evidenced in writing; but Mr Dealtry said that the Appellant would have to resign first; and nothing came of these exchanges
9. The Tribunal went on to find that the Appellant continued to take legal advice until March 1999. On 8 March 1999 he sent, via his solicitors, a letter terminating his employment and stating that he no longer had any trust and confidence in the Respondents and was claiming that he had been constructively dismissed.
10. Repudiation

It is logical and convenient, although the point arises by way of cross-appeal, first to consider the issue as to whether or not there was, on the Tribunal's findings, a repudiation by the Respondents of the contract of employment, and if there was, whether that conclusion can stand against the criticisms which have been made of it, on behalf of the Respondents, by Mr Dubb. If the cross-appeal succeeds, then no issue as to affirmation can arise. It could also be said that if the Tribunal's decision as to affirmation survives this appeal, then it would be unnecessary to consider the repudiation issue; but as will be seen later in this judgment, our conclusion is that the Tribunal's decision on the affirmation issue was based on errors of law; thus, the repudiation issue is a live issue.

11. The Tribunal directed itself correctly, in paragraph 10 of its decision, as to what constitutes a constructive dismissal. It set out its conclusions on all of the issues to which we have referred in paragraph 12. The arguments which we have heard, on all issues, arise essentially from those conclusions.
12. The first task that we face in considering the repudiation issue by way of appeal, or to be more accurate, by way of cross-appeal, is to identify the Tribunal's findings on that issue if possible. It is clear that there was no express term of the contract of employment on which the Appellant relied. His case was put wholly on the basis of the implied duty between employer and employee the existence of which was reinforced by the decision of the House of Lords in the case of Mahmood v Bank of Credit & Commerce International (1997) ICR 606 in which decision the implied 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."

In its conclusions the Tribunal appears to deal with the question as to whether there was such a breach of contract, ie a breach of that implied term, firstly, in the opening sentence of paragraph 12 where it says:

"The Tribunal had considerable sympathy with the Appellant because of his medical problems and lengthy absence from work, but was unable to say that the Applicant was constructively dismissed in this case."

The Tribunal then says, two sentences later:

"The Applicant had some reason for losing confidence in the Respondent, which had taken no definite action to deal with the Applicant's problems since the Applicant first asked to return to work (on light duties) in about October 1998. Despite the meetings with the Applicant, the Respondent had put forward no suggestions save that the Applicant should wait until he was fit to return on his usual heavy duties, or that he might resign (and receive some money from the Respondent). Had the Applicant resigned at that point, he might well have succeeded in showing a fundamental breach of contract by the Respondent."

Lastly:

"The connection between the meetings and discussions in October, November and December 1998 and the Applicant's resignation in March 1999 is too tenuous to support the Applicant's complaint of constructive dismissal. The Tribunal decides that the Applicant was not constructively dismissed."

13. There are 3 possible views of what it was that the Tribunal were there deciding. The first is that they were deciding that there was repudiatory conduct on the part of the Respondents, but that the contract was affirmed by the Appellant despite that repudiatory conduct. This is the way Miss Roberts submits we should construe this decision. The second view is that the Tribunal was finding that there was no repudiatory breach of contract; so submits Mr Dubb on behalf of the employers. The third, is that the Tribunal was not going any further than saying that there might have been such a breach but that, if there was, it was affirmed.
14. Mr Dubb, in his submission that there was a finding in paragraph 12 that there was no repudiatory breach relies, not surprisingly, on the first and last sentences of that paragraph. However we do not regard it as at all clear that the Tribunal was expressly finding in those sentences, or elsewhere, that there was no repudiatory breach. Such a conclusion would appear to have been inconsistent with the sentence, which we have already quoted, which bears the words:

"Had the Applicant resigned at that point he might well have succeeded in showing a fundamental breach of contract by the Respondent."

On the other hand it is equally unclear, in our judgment, that the Tribunal was finding that there was a repudiatory breach. It certainly does not say so in terms; and we do not see how it can be clearly implied that it so found. It may well be that the correct construction of paragraph 12 is that the Tribunal was saying no more than that there might have been such a breach but it was unnecessary so to decide because of the view the Tribunal had reached on the affirmation issue. If that is right and if the Tribunal decision on affirmation cannot stand, as to which we will say more later, then the repudiation issue remains unresolved, although solution will plainly be necessary.

15. If the Tribunal did decide that there was a repudiatory breach of the implied duty to maintain trust and confidence, based on the first of Miss Roberts assertions, namely that the Respondents had failed to provide light work for the Appellant despite his requests for such work, that would have been a finding which, in our judgment, could not have been reached on the basis of the factual account which the Tribunal set out. Mr Dubb submits that to put it at its highest, the evidence demonstrated only that the Respondents had been unreasonable in their response or lack of response, to the Appellant's request for light work; and that cannot of itself, on authority, be sufficient to establish a repudiatory breach of contract. Whether the Tribunal regarded the conduct of the Respondents as reasonable or unreasonable is a matter about which we say nothing. What is perhaps more important is Mr Dubb's further submission, that the Tribunal could not have concluded that the Respondents were in repudiatory breach of contract by failing to provide alternative light work for the Appellant, unless it found as a fact, there being conflicting evidence of the point from the Appellant on the one hand and the Respondents on the other hand that there was available light work which the Appellant could have done. Miss Roberts frankly and fairly accepted that, had the Tribunal concluded that there was no such light work available, then there could have been no repudiatory breach. Unhappily, the Tribunal makes no finding at all in its decision as to whether there was or was not such light work available. In our judgment, in the absence of such a finding, it was simply not open to the Tribunal to conclude that there was a repudiatory breach of contract on the Respondent's part in failing to provide light work. Such a conclusion would have been perverse. It would have been a conclusion which no reasonable Tribunal could have reached; it would have been a conclusion as to which, to use the well known test from Neale v Hereford & Worcester County Council [1986] ICR 471 this appeal Tribunal would be bound to say "that must be wrong". Of course, if the Tribunal had found that alternative work was available but the employers had not bothered to try to find it, or knowing it was available and suitable for the Appellant, had simply decided not to offer it to him for no good reason, then it would have open to it to find that there was a breach of contract and even a repudiatory breach of contract.
16. We are left with 2 fundamental gaps in the Tribunal's reasoning on the repudiation issue. Firstly, there is the lack of clarity as to whether there was or was not a finding of repudiatory breach, or whether they were finding only that there might have been, but they did not need to decide whether there was or was not. Secondly, there is what appears to us to be an inescapable gap in the reasoning of the Tribunal if it did find a fundamental breach, arising as we have described from its failure to resolve the issue as to whether there was or was not suitable light work available for the Appellant.
17. Before leaving the repudiation issue it is necessary to mention a second ground on which Miss Roberts has advanced, here, as she did below, an argument that the Respondents were in repudiatory breach of contract. The argument is that by offering the Appellant 6 weeks pay plus holiday pay if he resigned and telling him that he would have to resign first before they would put anything into writing, the employers had repudiated the contract in breach of the implied term to which we have referred. The Tribunal does not address this argument anywhere in its decision. That may be another flaw in its reasoning although we feel bound to say, particularly in the light of the finding that it was the Appellant who asked Mr Dealtry to get rid of him so that he could make a social security claim (but not wholly for that reason because we would have taken the same view if he had not asked) that it is difficult to see how this episode could have amounted to a breach of contract or to a repudiatory breach of contract; but we are not making any decision about that because, as will appear, that is a matter which may have to be decided hereafter.
18. For the reasons which we have set out, we take the view that the flaws in the Tribunal's reasoning are such and the gaps in its conclusions are such, that the only way to deal with the repudiation issue is to order that it be remitted to a fresh Tribunal which will have to reconsider the issue on fresh evidence. That is of course a conclusion which we regret; but it is the only conclusion which, in our judgment, does justice between the parties and which will enable the matter to be decided properly and according to law.
19. Dates of Repudiation

Because of our conclusions on the issue raised by the cross-appeal, which we have described above, it is strictly unnecessary for us to address the first of the 2 issues raised by the appeal, namely whether there was repudiation not only in October but also in December 1998. We propose to say very little about it because it will be for the Tribunal which ultimately hears this case to consider not only whether there was repudiatory conduct but, if there was, when there was repudiatory conduct. The Appellant's argument that the Tribunal ought to have found that the repudiatory conduct lasted for longer or started later, and in the case of the exchange between Mr Dealtry and the Appellant, that all occurred in December, is of course put forward in order to reduce the passage of time between the repudiation and the time when he accepted that repudiation. That is another matter which the Tribunal will have to consider. We do not propose to say any more on this issue in the light of our decision on the cross-appeal. To say any more would be to seek to influence the Tribunal which is going to hear and decide this case anew. We do not propose to take such a course.

20. Affirmation

The Tribunal does not expressly state in its decision what the period was during which the employee delayed before resigning. It is not clear what view they took as to that period. There may not, indeed, have been a finding at all as to what the repudiatory conduct was, if any, and when the repudiation took place. It is possible that if there was repudiatory conduct, the period of 'delay' was from October 1998 to March 1999, or from December 1998 to March 1999. If that problem stood alone it might not be one of substantial importance; but in our judgment, the Tribunal in considering the issue of affirmation misdirected itself in a number of respects. Firstly, it appears from paragraph 10, in the last sentence, of which the Tribunal directs itself in these words:

"Further, the employee must not delay too long before resigning."

and from paragraph 12, in which the Tribunal said:

"But the Applicant, by taking no action in respect of the Respondent by March, left the matter too long and affirmed the contract."

that the Tribunal considered the issue of affirmation only in terms of the time which had passed between the employer's repudiation or putative repudiation and the employee's acceptance of that repudiation by his resignation on 8 March 1999. In thus approaching the affirmation issue the Tribunal, in our judgment, fell into error.

21. Our attention has, in this context, not surprisingly, been drawn to what Lord Denning said in Western Excavating v Sharp (1978) ICR 221 at page 226A:

"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. Moreover, he must make up his mind soon after the conduct of which he complains; for, if he continues for any length of time without leaving, he will lose his right to treat himself as discharged. He will be regarded as having elected to affirm the contract."

If that passage stood alone without further authority, then the Tribunal's approach to affirmation might be difficult to criticise. However, it is clear that there are differences between cases in which the employee is at work and receiving money from the employers when the repudiation occurs and continues to work and receive money thereafter before terminating the contract of employment and cases in which, when the repudiation occurs, he is not at work and is therefore not affirming the contract by working, and is not receiving any pay and is not therefore affirming the contract by the receipt of monies. In W E Cox Toner (International) Ltd v Crook (1981) IRLR 443, Mr Justice Browne-Wilkinson, as he then was chairing the Employment Appeal Tribunal, said:

"It is accepted by both sides (as we think rightly) that the general principles of the law of contract apply to this case, subject to such modifications as are appropriate to take account of the factors which distinguish contracts of employment from other contracts. Although we were not referred to cases outside the field of employment law, our own researches have led us to the view that the general principles applicable to repudiation of contract are as follows. If one party ('the guilty party') commits a repudiatory breach of contract, the other party ('the innocent party') can choose one of two courses; he can affirm the contract and insist on its further performance or he can accept repudiation, in which case the contract is at an end. The innocent party must at some stage elect between these two possible courses; if he once affirms the contract, his right to accept the repudiation is at an end. But he is not bound to elect within a reasonable or any other time. Mere delay by itself (unaccompanied by any express or implied affirmation of the contract) does not constitute affirmation of the contract; but if it is prolonged it may be evidence of an implied affirmation."

Later in the same judgment, Mr Justice Browne-Wilkinson says:

"It is against this background that one has to read the short summary of the law given by Lord Denning MR in the Western Excavating case."

As it seems to us, Lord Denning was referring to an obvious difference between a contract of employment and most other contracts. An employee faced with repudiation by his employer is in a very difficult position. If he goes to work the next day he will himself be doing an act which may be said to be consistent only with the continued existence of the contract; and he may thus be said to be affirming the contract. Certainly when he accepts his next pay packet the risk of his being held to have affirmed the contract is substantial. It is not the delay which may be fatal but what happens during the period of the delay; and if the employee is subsequent to the repudiation not working and not receiving money from the employers the evidence of affirmation is plainly much weaker.

22. In Bashir v Brillo (1979) IRLR 295 a similar explanation of the law is set out in the judgment of the Employment Appeal Tribunal, presided over by Mr Justice Slynn, as he then was. Bashir v Brillo was a case of somebody who was not at work at the time when the repudiation occurred. The Employment Appeal Tribunal said this:

"But that does not, of itself, seem to us to be necessarily fatal to Mr Bashir's claim. It seems to us that when the Master of the Rolls is talking about the employee continuing for any length of time without leaving "(that of course is the Western Excavating case)" he is referring to a situation where the employee actually does the job for a period of time without leaving, or if he does some other act which can be said to affirm the contract as varied. The most that can be said here is that Mr Bashir, by applying for and taking the sick benefit, was affirming the existence of a contract of employment. He said it was employment as a supervisor and he would accept no employment at a lesser wage. But because the amount of sick pay is the same for a supervisor as for a labourer or other worker in the kind of job which Mr Bashir might have done, it does not seem to us that it can be said that by the receipt of sick pay he had done an act to affirm the contract is varied."

In that case it seems to us, that the Tribunal, although quite rightly seeking to apply the decision of the Court of Appeal in Western Excavating v Sharp has attached too much to the mere passage of time. What it really had to consider was whether the Appellant, not being at work, there were other factors which could be taken as showing an election to affirm the contract.

23. In Burton v Northern Business Systems Ltd (unreported Appeal Number EAT/608/92) the Employment Appeal Tribunal, presided over by His Honour Judge Hull QC, followed those two EAT decisions to which we have referred and repeated the distinction that had been drawn between the approach to affirmation in the case of an employee who was still at work and receiving money when the repudiation occurred and the case of an employee who was not at work and not receiving money at that time. To this discretion the Tribunal in this case made no reference; the Appellant in this case was not at work but was off sick; although he wanted to come back to light duties at the relevant time, he did not do so and was not receiving any money from the employers. He was living on statutory sick pay. The Tribunal, in our judgment, in considering only the question of delay and not looking to see what acts on the part of the Appellant could or did amount to affirmation, in all the circumstances of the case, erred in law.
24. In our judgment the Tribunal also erred in failing to record and therefore failing to heed the evidence which it is agreed was given by the Appellant, and was not in dispute, that the Appellant either by himself or by his wife continued to seek clarification of his position from the Respondents into January 1999. Neither Miss Roberts nor Mr Dubb, both of whom were present before the Tribunal, can now remember how far into 1999 his requests for clarification of his position went, we record that in no critical spirit; it was a long time ago; and there was no doubt a great deal of evidence before the Tribunal. It follows that it was open to the Tribunal to find, that the requests for clarification had continued to the end of January - so that there would only have been some 5 or 6 weeks, at the most, of delay, as compared with the obviously much longer period which the Tribunal had in mind. Even if the requests for clarification went only into the beginning of January, nonetheless the amount of the delay would have been significantly reduced. The Tribunal say nothing about this evidence. It does not appear in their reasoning that they had taken it into account. In our judgment they should have done.
25. Thirdly, Mr Dubb has conceded in argument that in waiting for the arrival of the medical report, seemingly as long as until March, both parties behaved reasonably. If that is right, then again, the Tribunal had erred in law in not taking that into account. It concluded, in the second sentence of paragraph 12 of the decision, that it was reasonable for the Respondents to await the medical report, and later in the same paragraph, that it would have been reasonable for the employee to await the outcome of her appointment with the consultant. We take the view that the Tribunal should have considered these conclusions of fact in approaching the question of affirmation; but it appears to have failed to do so.
26. For those reasons the finding that there was affirmation, in our judgment, cannot stand.

Remission

27. Miss Roberts fairly accepted, in the course of argument, that if we reached this conclusion, on the affirmation issue, she could not invite us to substitute our views as to affirmation for that expressed by the Tribunal. It follows that the question of affirmation will also have to be remitted for further consideration by a Tribunal. Because the affirmation issue is still to be resolved, the repudiation issue must still be a live issue and one which also has to be resolved. Both issues must be resolved by remission to a new Tribunal. We have already said that we regret having to make such an order, which imposes further cost and delay on the parties, but we see no effective alternative to the course which we order.
28. Accordingly, to the extent that we have set out in this judgment, the appeal and the cross-appeal are allowed. The matter is remitted to a fresh Tribunal for re-hearing de novo. We hope that the parties will be able to achieve such a hearing without much further delay.