United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Mr Olu Ojedokun Legal Solutions Ltd c/o 9 Dunsmore Close Beeston Nottingham NG9 1LU


 


MR JUSTICE NELSON

1. This is the preliminary hearing of an appeal against the decision of the Employment Tribunal at Manchester, which by its unanimous decision of the 4^th October 2001 dismissed the Appellant's claim of unfair dismissal.
2. The Appellant was employed by the Respondent as a lecturer from the 1^st September 1991 until 30^th June 2000. His conditions of service, colloquially known as 'the Silver Book', contained the salary scale and conditions and included a recommendation in relation to redundancy which stated:-

"The individual concerned should be given the maximum possible notice which should in no case be less than one year."

3. In 1993 the College became a self-governing corporation independent of local authority control. All staff were transferred under the provisions of the Transfer of Undertakings (Protection of Employment) Regulations 1981 retaining their existing terms and conditions. However, throughout 1994 and 1995 new contracts were negotiated and introduced. Some of the terms in the new contracts were an improvement upon and others less beneficial than the 'Silver Book' terms. The majority of the staff agreed new contracts so that by 2000 there were only three lecturers, one of them being the Appellant, remaining on the old 'Silver Book' terms and conditions.
4. From 1994 those remaining on 'Silver Book' conditions effectively had their salary frozen. There was an annual review but the Respondent stated quite clearly that it was unlikely that any such review would produce an increase in salary applicable to those remaining on the 'Silver Book', other than incremental increases. The Tribunal noted that the Appellant contended that the 1994 recommended uplift should have been applicable to him and this was not contested. The Tribunal also noted that that occurred some six years prior to the termination of the Appellant's employment and no formal grievance was raised by him at any stage about the issue of pay. In 1998 the Respondent stated in a letter to the Union that 'although normal incremental progression was preserved it was made clear to staff that Governors would be unlikely to grant annual pay increases to staff who chose to remain on the 'Silver Book' '.
5. The Appellant's employment was terminated with effect from 30^th June 2000. The Appellant contended that he had been constructively dismissed by reason of breaches of contract by the Respondent. These breaches, the Appellant contended, consisted of (a) the absence of any genuine pay review or pay increase on an annual basis over some seven years, amounting in effect to a demotion, (b) the cumulative effect of a series of incidents resulting in the implied term of good faith being breached, and (c) by way of anticipatory breach, the failure on the part of the Respondent to give a payment equivalent to twelve months notice upon termination of employment.
6. The Respondent denied any breach of contract and contended that the termination of the Appellant's employment was his resignation by mutual agreement. There was no dismissal, but in the event that dismissal was found the reason for such a dismissal was redundancy on a voluntary basis and not unfair under section 98(4) of the Employment Rights Act 1996.
7. The Employment Tribunal gave careful consideration to the allegations of breach of contract and considered in detail the course of correspondence between the Appellant and the Respondent leading up to the termination. They found that the freeze on the Appellant's pay was not a breach of any of the terms of his contract, express or implied, as there was no contractual obligation to increase pay. Even if such a failure to pay increases could be interpreted as a breach of the implied term of good faith, the Tribunal found that the Appellant had accepted the position over a number of years, entered no formal grievance, and stated that there was no evidence whatsoever that the pay situation had led to, or in any way influenced his decision to seek termination of his employment.
8. In relation to the incidents, the Tribunal found that none of these were of such a fundamentally serious nature as to constitute a breach of the implied term of good faith. They set out the incidents in paragraph 4(f). They consisted of allegations of breach of discipline against the Appellant in July 1993 when no disciplinary procedures were pursued, allegations of non-attendance, time tabling problems or re-arrangements of training arising in 1998 and 1999 all of which appeared to have been resolved by agreement between the parties. The Tribunal found that none of those matters gave rise to a formal grievance and there was no suggestion that there was any ongoing issue beyond January 2000.
9. They further found that the period of time that had elapsed without a grievance being entered between the final incident in the latter part of 1999 and termination, was such that the contract had been affirmed by him. As in the case of the failure to make pay increases they found that the incidents had no bearing on the Appellant's decision leading to the termination of his employment.
10. As to the course of correspondence leading to termination the Employment Tribunal found the Respondent had an annual round of redundancies each year from 1995 and one was anticipated for 2000. The Appellant had not been told at any stage that he was at risk. By a memorandum of the 25^th May 1999 the Appellant indicated that 'in view of the fact that the department is looking for 1.6 full time posts to be made redundant, I would like to know my entitlement in taking up a redundancy offer'. During the correspondence which followed the Appellant said in a letter of 18^th June 1999 that he would be prepared to volunteer for redundancy 'if I am guaranteed to receive one years salary in lieu of notice. This constitutes an extra eight months salary to the four months currently on offer.' The Respondent stated that they were unable to make such an offer, referring to the fact that a four months notice period for redundancy would apply to all staff. The matter was left in July 1999 with the Appellant indicating that he was entitled to one years notice under the 'Silver Book' conditions with the Respondent maintaining that four months notice was the maximum to which he was entitled.
11. In June 2000 the Appellant wrote again in a without prejudice letter asking for the breakdown of his financial entitlements if he opted for voluntary redundancy to take effect from 31^st August 2000. There then follows a series of letters between 20^th June 2000 and 28^th June 2000 culminating in a letter of 6^th July 2000 from the Appellant stating that he was:-

"prepared to accept the College's redundancy package offer to take effect from 30 June on the condition that the College's interpretation as contained in recent written correspondence with Anna between 20 June and 28 June is applicable in my case… From my telephone conversation with Anna I was made to understand the redundancy package (in this case four months pay in lieu of notice, plus total redundancy pay, plus payment in lieu of Silver Book entitlement) would be paid into my account on 21 July".

12. In accordance with this agreement the Appellant's employment was terminated with effect from 30^th June and, as the Tribunal found, the payment anticipated by him in his letter of 6^th July 2000 was subsequently sent to him and received by him. The Tribunal noted that the sum was in excess of his statutory entitlement upon redundancy.
13. The Employment Tribunal rejected the argument that the letter of the 6^th July 2000, by stating that his acceptance was 'on the condition that the College's interpretation as contained in written correspondence with Anna between 20 June and 28 June is applicable in my case' reserved his right to continue to argue that he was entitled to twelve months notice under the 'Silver Book' conditions. The Tribunal in rejecting that submission, concluded that there was no ambiguity in what the Appellant believed was being offered and what he accepted. The nature of the payments he anticipated, as set out in the letter of the 6^th July, were precisely what he had agreed and precisely what he was paid. The Appellant confirmed to the Tribunal that 'payment in lieu of Silver Book entitlement' referred to outstanding holiday pay entitlements.
14. The Appellant also raised before the Employment Tribunal the submission that the fact that a contract of employment is terminated without objection or perhaps even with encouragement, does not stop it amounting to a dismissal. (See Burton Alton and Johnson -v- Peck [1975] IRLR 87) The Employment Tribunal rejected the application of this principle on the facts of the case, stating that although there was a fine line between constructive dismissal and resignation, they concluded that the termination of the Appellant's employment on 30^th June 2000 was by way of mutual agreement (being an offer of resignation accepted by the Respondent on agreed terms) rather than an express dismissal.
15. It was the Appellant who had sought details of his entitlement in taking up the redundancy offer by his memorandum of the 25^th May 1999, and he again sought further information on the possibility of 'voluntary redundancy' in the summer of 2000. The Respondent had acknowledged that 'a small number of staff may have an entitlement to twelve months notice of compulsory redundancy' when they wrote to the Appellant on the 23^rd June 2000, but had made it clear that that provision could not be maintained for sound business reasons, and that all staff would receive four months notice or an appropriate payment in lieu of notice. When the Respondent wrote to the Appellant on the 28^th June 2000 they summarised the choices open to him as:-

i) accepting voluntary redundancy from 31 August 2000 on the terms set out in the letter of 20^th June 2000 or

ii) accepting voluntary redundancy with effect from 30 June 2000 on the terms outlined in their letter of the 26^th June 2000 or

iii) rejecting the College's offer.

The Tribunal concluded on the basis of the oral evidence and correspondence that what was being offered to the Appellant, should he wish to accept it, was a notice period of four months on a voluntary basis and that there was no evidence whatsoever of any coercion or duress.

16. The Tribunal considered what the position would be if they were wrong in their conclusion that the termination was by mutual agreement rather than dismissal. They concluded that even if there was a dismissal, such dismissal would not be unfair as the Appellant had the benefit of legal advice at the time, and had accepted, without coercion or duress, an offer made to him of terms under which his employment could be terminated. They took into account the fact that it was the Appellant who had first raised the question of voluntary redundancy and asked what his entitlement would be.

The Grounds and Submissions.

17. There are eleven Grounds of Appeal set out in the Notice of Appeal. Mr Ojedokun presented on the Appellant's behalf two skeleton arguments dealing with those eleven grounds. During the course of his helpful submissions before us Mr Ojedokun focused on five central grounds, which he submitted were errors in law by the Tribunal. These were as follows:-

i) The Tribunal did not consider the contract properly nor the allegations of breach of contract.

ii) The final acceptance of the Respondent's offer, set out in the Appellant's letter of the 6^th July 2000 was a conditional acceptance. The Tribunal failed to recognise the fact that this was so and that the Appellant was still standing on the twelve months notice period.

iii) This was a redundancy situation and therefore a voluntary agreement still amounted to a dismissal (Burton Alton and Johnson -v- Peck).

iv) A right to a redundancy payment cannot be exercised unless an employee has been dismissed (section 136 Employment Rights Act 1996).

v) The failure to make pay increases was a continuing serious breach.

18. It was submitted to us that the Tribunal failed to deal properly with any of these matters and hence erred in law.
19. We have considered these submissions and the contents of the Grounds of Appeal and each of the written skeleton arguments.

Conclusions

20. We are satisfied that the Employment Tribunal gave proper consideration to the contract and the allegations of breach. They made clear findings both in relation to the failure to pay increases, and the incidents, based upon the evidence before them. They concluded on the facts that neither the failure to make pay increases nor the incidents described had any bearing on the Appellant's decision leading to the termination of his contract. None of the incidents amounted to a breach of the implied term of good faith and in any event the contract had been affirmed by the Appellant. The reality was that the Appellant had initiated the discussion between himself and the Respondent on the issue of redundancy, had aired it fully in correspondence and accepted the offer, including only four months pay in lieu of notice rather than twelve months pay in lieu of notice, without duress or coercion. These findings of fact by the Tribunal were based upon the evidence before them and cannot be impeached. In any event they gave clear and proper consideration of the contractual issues and points.
21. The submission that the Tribunal did not have proper regard to the conditional nature of the acceptance in the letter of the 6^th July 2000 is without merit. The point is specifically considered in paragraph 7 of the decision. During the course of his submissions before us, Mr Ojedokun showed us the correspondence between Anna Patra on behalf of the Respondent and the Appellant. This correspondence, as the Employment Tribunal found, makes it abundantly clear that the Appellant raised the question of twelve months notice, was told that all staff received only four months, and he could receive no more, and that he accepted that in his letter of the 6^th July. The letters between 20^th June and 28^th June bear no other interpretation than the clear unqualified acceptance of the offer being made to him on the basis of four months notice not twelve months notice. We are satisfied that the Tribunal gave full and detailed consideration to the argument and rightly rejected it.
22. Whilst Burton Alton and Johnson -v- Peck is authority for the proposition that the fact that the employee has no objection to being dismissed or even volunteers for dismissal does not prevent there being a dismissal within the meaning of the Act, the distinction between a contract which is terminated unilaterally (albeit without objection and perhaps even with the encouragement of the other party) and a contract which is terminated by mutual agreement, is a distinction which is still maintained. Birch and Humber -v- The University of Liverpool [1995] IRLR 165) in which the Court of Appeal explained the first instance decision in Burton Alton and Johnson -v- Peck and made it clear that termination by mutual agreement, even in a redundancy situation, was a finding open to a Tribunal depending on the facts of the particular case.
23. We are satisfied that the Employment Tribunal made no error of law in considering this issue; they were entitled to conclude that there was a mutual agreement not a dismissal and the evidence before them indicates their decision was correct.
24. There is no application of section 136 of the Employment Rights Act 1996 where there has been a mutual agreement, as here.
25. The Tribunal did not fail to deal with the issue of loss of earnings. They dealt with it on the evidence before them and came to conclusions which were open to them upon that evidence.
26. We are satisfied having considered all the submissions and the written skeleton arguments and Grounds for Appeal before us that the Tribunal made no error of law in what, in our view, was a careful and well-considered judgment. The appeal must be dismissed.