United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Piers Chadwick Consultant KLC Advisory Services 86 Smithbrook Kilns Horsham Road Cranleigh Surrey GU6 8JJ


 


MR RECORDER BURKE QC

1. This is an employers' appeal against the Decision of the Employment Tribunal sitting at Birmingham, and chaired by Ms Matthews, promulgated with Extended Reasons on 15 November 2000, by which the Tribunal concluded that the employee, Mrs Mordue, had been constructively dismissed and that the dismissal was unfair.
2. For the purpose of this preliminary hearing, the facts can be shortly stated. Mrs Mordue was employed at the employers' holiday sales travel shop or branch at Kenilworth. She was the assistant manager; her manager there was Mr Bailey. It was Mrs Mordue's case that Mr Bailey undermined her and humiliated her in various respects, to such a degree that she complained in January 2000 about his behaviour to her. The Tribunal accepted her evidence in broad terms and found that her complaints were broadly true.
3. When she complained, at first nothing happened. She was then off work until the beginning of March. On her return, Mr Bailey, as the Tribunal found, had unilaterally altered a pre-existing arrangement whereby Mrs Mordue always had her day off on Tuesday, and insisted on her taking different days, in common with other staff, despite the previous agreement which was, at least in part, to enable Mrs Mordue to make firm childcare arrangements.
4. The employee, as a result, made a further complaint to Personnel. This time her complaints were investigated by a regional sales manager, Mrs West, who decided that there was nothing in them, and that Mr Bailey should not be moved from the Kenilworth shop, as no doubt Mrs Mordue would have preferred. On the contrary, as the Tribunal found, on 17 March, Mrs West rang Mrs Mordue to tell her that there was nothing in her criticisms, and said to her: "the ball is in your court".

No doubt that is not all that she said, but that is certainly, as the Tribunal found, something that she did say. It is accepted by Mr Chadwick, on behalf of the employers, that the Tribunal found that the combination of Mr Bailey's conduct towards Mrs Mordue, and the inadequate investigation, amounted to a fundamental breach of the employer's duty of trust and confidence and that, by way of appeal, he cannot challenge that finding. On the same day, in the conversation in which Mrs West informed Mrs Mordue of the outcome of the enquiry, Mrs Mordue told Mrs West, as the Tribunal found, that she would resign and claim constructive dismissal.

5. On 20 March she wrote a resignation letter saying she would claim constructive dismissal. She then received a letter from the employers, putting in formal terms what she had been told on 17 March, asking her to reconsider her intention to resign and telling that she could either return to the shop at Kenilworth or be transferred elsewhere. The employee realised that this letter had been written before her letter of resignation of 20 March had been received, and so on 24 March, she wrote another letter.
6. By this time, further trouble had emerged. Employees are allowed a concession against the cost of holidays which they take. The Tribunal found that Mr Bailey had agreed that Mrs Mordue should have an allowance of £600 against her holiday costs. However, as the Tribunal found, on 18 March Mrs Mordue learned from a colleague that Mr Bailey had unilaterally reduced this allowance to one of only £300. The Tribunal found that Mrs Mordue had not referred to this event specifically in her first resignation letter of 20 March because she did not want to reveal that she had had informally passed to her by another member of staff, information which had not been formally provided to her by her employers. But she learned of it formally between the first and second resignation letters and made a reference to it in her second resignation letter of 24 March.
7. Mr Chadwick further frankly accepts that this conduct in relation to the withdrawal of the concession was found by the Tribunal to amount to a fundamental breach of contract and that he cannot challenge that finding. For an employer to withdraw an agreement in effect to pay £300 towards the cost of a holiday would be regarded by almost every Tribunal as a fundamental breach of contract, without even having to call upon the implied term of trust and confidence.
8. The Tribunal found that the employee resigned in response to the outcome of the investigation, rather than by way of response to the withdrawal of the concession. It found, in effect, applying what Mr Chadwick has helpfully and accurately described as the "last straw" doctrine, that the outcome of the investigation and the inadequacy of the investigation was for Mrs Mordue the last straw.
9. It went on to find, however, that before the resignation was effective, Mrs Mordue had discovered the further fundamental breach in relation to the concession, and the effect of this was to drive away any possibility that she might change her mind. It repeated that her decision to resign on 20 March, when she sent her first resignation letter was initially in response to the first fundamental breach, rather than the second.
10. Mr Chadwick has drawn our attention to a passage in Mrs Mordue's witness statement, in which she said, after describing the concession incident, that she had:

"due to the added pressures"

written the letter of resignation; the implication is that that was a reference to the first letter of resignation, and to an answer which Mrs Mordue gave to the Chairman of the Tribunal in the course of the evidence; when asked what was the last straw, she answered, we are told,

"It was the reduction of the concession which was the last straw."

11. Mr Chadwick submits as follows, under what he has put as ground 2 of his Notice of Appeal (we will come back to ground 1, which is a procedural matter later). Firstly he submits that Mrs Mordue resigned orally on 17 March at a time when she did not know about the withdrawal of the concession on the findings of the Tribunal. Secondly, that at that time, the only recent breach or last straw was the handling of the investigation, thirdly that Mrs Mordue did not say that that was the reason for her resignation, fourthly on 17 March the withdrawal of half of the concession could not have been her reason because she did not know about it, and therefore, finally, that the Tribunal, in finding that the last straw was the handling of the investigation which was not the way in which Mrs Mordue put it, was substituting its own reason for her resignation, as opposed to the reason which she herself gave. That, it is said, was impermissible, and constituted an error of law, because the only reason she gave for resigning when she did was the withdrawal of the concession which, if the resignation happened on 17 March could not have been her reason. We hope that that is an adequate summary of the way in which Mr Chadwick has put it.
12. We do not regard that as an arguable ground of appeal. Firstly, Mr Chadwick accepts that the argument only succeeds if Mrs Mordue did resign and end her employment orally, on 17 March in her conversation with Mrs West, because she knew about the withdrawal of the concession on the following day, the 18^th. But it was not the employer's case here that the employee had resigned on the 17^th, nor was it the employee's case that she had resigned on the 17^th ; and further, we do not read the Tribunal's decision nor do we think it arguably can be read as concluding that she did resign and bring her employment to an end on the 17^th. On a proper reading of paragraph 20 of the Decision, which is the relevant paragraph for the purposes of this point, it seems entirely clear to us that the Tribunal found that what Mrs Mordue was doing in the conversation on the 17^th was saying that she would resign, not that she was thereby giving notice of resignation and terminating her employment. It is true that in the same paragraph, the Tribunal refer to the letter sent to her, a few days later, giving her the opportunity :

"to change her mind about her resignation"

(referring to what she had said on 17 March); but later the Tribunal plainly refers to the resignation as occurring on 20 March (see for example, paragraph 31 and also paragraph 33 of the Decision). It is perhaps of some interest that the employer's Notice of Appearance actually identified 3 April as the date on which the employment ended.

13. In our judgment, looking at the Decision as a whole, rather than submitting individual words or phrases to the examination of a magnifying glass, the Tribunal did not decide that the resignation occurred or that the employment came to an end on 17 March.
14. We do not, however, propose to leave the matter there. We must next refer to the witness statement, and the answer given to the Chairman. In the witness statement, Mrs Mordue used the expression, in relation to her resignation:

"due to the added pressures"

Those words were entirely apt to include both the inadequate investigation and the withdrawal of part of the concession. As to the answer she gave to the Chairman, Mr Chadwick frankly accepts that the question did not identify by date which of the three possible dates of resignation, 17, 20, or 24, March was actually being referred to. By the 20^th, on the findings of the Tribunal, it was entirely open to the employee to say that the withdrawal of the £300 was the last straw, and one can well understand why she would have said it; but even if she had said it, she would not have been excluding from her mind what had happened earlier, only days before, in relation to the result of the investigation.

15. Thirdly, we feel bound to say that in a case in which there are two consecutive fundamental breaches of a contract of employment, and in which the employee says that she has resigned as a result of the second, but it turns out, for example, that the second occurred after she had resigned, but the first occurred shortly before she resigned, it is entirely open to the Tribunal to conclude that she resigned as a matter of fact, because of the first breach, as this Tribunal, indeed, did.
16. The law requires, as Mr Chadwick rightly submits, that the employee in a constructive dismissal case establishes that she has left, to use a neutral word, her employer's employment because of the employer's fundamental breach of contract, and not for some extraneous reason, for instance that she was moving, that she wanted to go to another job, that she had problems with her children, or whatever. But it does not require that she must establish that the fundamental breach which caused her to resign, was that which she said was the fundamental breach which caused her to resign, when as it happens, the dates are such that it could not have been that, but must have been some other fundamental breach.
17. It may be that the situation which we are describing, indeed the situation which arises in this case, may be very rare; but it is, in our judgment, unarguable that because the employee labels fundamental breach 'B' as that which is the final straw and is mistaken about that, but fundamental breach 'A' could have been the final straw, and was plainly in the picture at the time of the actual resignation, that she is not entitled to rely on fundamental breach 'A' and the Tribunal are not permitted to find that she left as a result of fundamental breach 'A'. What the Tribunal have to consider on all the evidence is what actually happened. Accordingly, in our judgment this ground, ground 2 of the employer's appeal, is not arguable, and must fail.
18. The third ground relates to waiver. It is clear, from the Tribunal's Decision, that they did not consider waiver, or perhaps we should more accurately call it affirmation, at all. However, Mr Chadwick accepts that if the Tribunal was entitled to find, as it did, that the failure to carry out a proper investigation, and the way in which the investigation was handled and reported to Mrs Mordue was the last straw, then there could not have been an affirmation or waiver, and thus his waiver argument only succeeds if his first argument, the second ground with which we have already dealt, succeeds. It is therefore not necessary for us to say any more about it. This ground of appeal also fails.
19. Now we must come back to the first ground, set out in the Notice of Appeal, which is of an entirely different nature. At the end of the hearing, which took place over one day in October of last year, there was no time for final submissions. It was therefore agreed between the parties of the Tribunal that the parties would lodge written submissions. It is clear that no specific arrangements were made on that occasion for either an exchange between the parties of their written submissions or for the Tribunal to send the submissions which were put in by one party to the other, although, of course, that is familiarly the way in which these matters are dealt with. It is not at all clear that the Tribunal ever received the submissions; no acknowledgement of their having been received was sent to the employers; and no reference to the submissions is made in the Decision itself. Mr Chadwick believes that his submissions were probably seen by the Tribunal because at one point, the Tribunal appears to have picked up an expression which he used in his final submissions. Of course, that may be a coincidence. Whether that be right or not, Mr Chadwick has never seen the submissions put in on behalf of the employee, and for all we know, the employee's side has not seen the submissions put in by Mr Chadwick, on behalf of the employers.
20. In the very recent decision of this Employment Appeal Tribunal, in London Borough of Barking and Dagenham v Oguoko [2000] IRLR 179, a decision of this Appeal Tribunal, chaired by His Honour Judge Byrt and sitting with two lay members one of whom is again sitting today, precisely this problem arose. At paragraph 33 of its Decision, this Appeal Tribunal said this:

"There remains the appellant's last ground of appeal. There will be occasions when it will be greatly to the convenience of the parties and of the tribunal that the parties' closing submissions should be made in writing after the hearing and lodged with the tribunal. If this procedure is to be adopted, it should be implemented only with the consent of the parties. Once such consent has been secured, then in our judgment the tribunal chairman must take responsibility of ensuring that the procedure is implemented in accordance with the rules of natural justice. This will require that, upon receipt of both sets of submissions, the tribunal will serve each party with the written submission of the other. Each party should be informed that if they have any appropriate comment to make on the submission of their opponent, they should send those comments to the tribunal within, say, a further 14 days. They should be warned that if, within that time, no comment is received back by the tribunal, it will be assumed they have no comment to make and the tribunal will proceed to make their decision on the basis of the submissions already tendered. Appropriate comments in reply should be limited, as would be the case had oral submissions been made, namely to correction of factual errors and legal submission on a new point of law not previously raised. The tribunal should not proceed to the decision making stage till the Chairman is satisfied that each of the above steps has been taken."

Mr Chadwick says, with the support of that Decision, that here, there was a want of natural justice, as indeed was found to be the case in London Borough of Barking and Dagenham v Oguoko because the written submissions of each party was not served on each opposite party.

21. We see no basis, at this preliminary stage, for departing from the Decision on the full hearing of the appeal reached by this Appeal Tribunal so recently. There is plainly an arguable case that there has been a departure from the principles of natural justice. One can easily see why a party will want to have the opportunity to peruse and comment upon the submissions of the other, for example, the opposite submission may mistake the evidence, raise a new point, raise an authority which was not mentioned before the Tribunal, and take other points to which it is necessary to reply.
22. In London Borough of Barking and Dagenham v Oguoko the appeal, despite the want of natural justice, actually failed because the Appeal Tribunal was satisfied that the Employment Tribunal had conducted its procedures, overall, in a fair way, and had rectified any defect in natural justice which had occurred. At this preliminary stage, while we have some doubt as to whether the exchange of submissions would have made any difference, we have, of course, not seen either submission, and do not feel that we could possibly decide that it is not arguable that the exchange of submissions would, or might have made, some difference.
23. Accordingly, this procedural point will be allowed to go forward for a full hearing. That is the only ground on which this appeal will go forward to a full hearing; the other grounds are dismissed.