United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR PETER WARD (of Counsel) Instructed By: Ms Hema Patel Messrs Levenes Solicitors Bedford House 125-132 Camden High Street London NW1 7JR
For the Respondent	MR DAVID EDWARDS (of Counsel) Instructed By: De Vere University Arms Hotel Wilderspool House Greenalls Avenue Warrington Cheshire WA4 6RH


 


JUDGE D SEROTA QC:

1. This is an appeal by Mrs Deborah Lassman from the decision of the Employment Tribunal at Bury St Edmunds, promulgated on 18 January 2001 and chaired by Mr Crome, which held that she had no claim for unfair dismissal as there had been a consensual determination of her employment.
2. On 17 March 1993 Mrs Lassman began to work for the Respondent as the Personal Assistant to the Manager of the De Vere University Arms Hotel which we understand to be a busy hotel in Cambridge. According to the Employment Tribunal she performed her duties impeccably. Over the years there were changes in the organisation of the hotel and different General Managers and her job title was changed to that of Administration Secretary.
3. In October 1998 a new General Manager arrived on the scene and it is important to note that relations between the Applicant and the General Manager began to deteriorate. In September 1999 the Applicant began to work extensively in a personnel function but in February 2000 a new Personnel Manager arrived and took away a lot of the work that had been done by Mrs Lassman. As a result she had a substantial amount of time, something like 20 hours or, one assumes, half of the working week which was unfilled. The new Personnel Manager did not think it appropriate for Mrs Lassman to act as his Personnel Assistant, something that Mrs Lassman had suggested and was willing to do.
4. From 28 April until a date in May there were a number of discussions involving Mrs Lassman and the General Manager to decide what should be done. A meeting took place on 4 May which was followed by a letter from the General Manager, Mr Fleming to Mrs Lassman, which confirmed the salient points discussed at the meeting. The meeting was called, Mr Fleming writes, "to advise you of the options that are available to you with regard to your changing role at the University Arms Hotel and to consult with you as to our way forward". Mr Fleming said that he had advised Mrs Lassman of the following options:

"Firstly that of making your role part time which would be sixteen hours a week paid on a pro rata basis of your present salary. Secondly accepting this role change and therefore not altering your annual salary or terms and conditions of employment and benefiting from a bonus scheme given within the Sales and Marketing Department."

5. We would point out that this second option related to a transfer of the Applicant to effectively a job in Marketing and Sales, something she was clearly not happy about and which would involve her reporting to the General Manager with whom relations had clearly deteriorated. In this regard we refer to paragraph 2 of the Extended Reasons of the Tribunal.
6. The third option was to make Mrs Lassman's present role redundant and that suggests to all of us that that was by way of compulsory redundancy. That is underscored by a later part of the letter to which we shall come shortly. Mrs Lassman had said that she was not happy about going back to a basic secretarial role which would be entailed in the Sales job that had been proposed and had not, for example, been very happy at the prospect of typing reservation letters. Mr Fleming wrote:

"With this in mind I have asked you to rewrite the job description issued to you on the 26^th April 2000 [that is the job description that had been proffered to her in relation to the Sales Department] incorporating all key responsibilities with the exception of reservation letters. Therefore, enabling you to specify what your role entails. You may wish to include areas of responsibility which you said you would like to be developed in and use the knowledge and skills which you feel would be wasted if you only dealt with mundane issues.

I would also be grateful to receive any ideas or suggestions you may have with regard as to how we can make our day to day communication more effective."

The letter then continued:

"Should we be unable to come to an agreement with regard to your new role, your employment will be terminated for reasons of redundancy and any settlement to which you may be entitled processed accordingly. However, I stressed that this is a last case scenario for us as we are keen to review all avenues of opportunity over the next week. The reason for us to take this action is in no way a reflection of the hard work and effort that you have put into the business to date."

A further meeting was proposed for 10 May and the letter concludes:

"Finally, I would record our apologies for any anxiety that this news may cause and trust we will be able to secure a positive outcome which balances the needs of our business with your individual requirements."

7. It seems absolutely clear to us that there were three options on offer. The first amounted to making her job part-time; that is something that could not unilaterally be forced upon Mrs Lassman. Secondly, accepting a role change which was something Mrs Lassman was clearly not happy about, although negotiation was offered in relation to this role change and, thirdly, if there could be no agreement, compulsory redundancy. It is impossible in our view to read the letter of 4 May as meaning anything but that. I have the benefit of sitting with lay Members with extensive industrial experience and, in particular, Mr Wright, who sits with me, expressed in the course of submissions that he had seen hundreds of cases such as this and in none could it be suggested that a person accepting redundancy under those circumstances was not accepting dismissal by way of redundancy.
8. There was a response to that letter from Mrs Lassman on 8 May. She enclosed an alternative job description but she said that she found herself in an invidious situation, "placing an intolerable strain on our working relationship with the trust element, vital between a boss and his Personal Assistant, to be totally diminished". In the circumstances she felt she had no option but to take redundancy, "as verbally stated during our meeting on 4 May". She did therefore (and I have a letter of 11 May) receive the offer of redundancy which was the basic statutory minimum, together with payment in lieu of notice and holiday pay. There was no enhancement and she therefore issued proceedings on 4 August asserting that she had been constructively dismissed.
9. The Respondent in its ET3, and during the course of the hearing, said: "No, there has been no dismissal, there has been a voluntary termination. If there has been a dismissal the dismissal is not unfair". The Employment Tribunal, as we say, promulgated its decision on 18 January and we have already noted the effect of its decision. We shall come to it shortly but we should mention that a Notice of Appeal was served on 27 February and the matter came before this Tribunal by way of preliminary hearing on 21 September 2001, the panel on that occasion being chaired by Mr Recorder Langstaff QC. Mr Langstaff expressed the view that there was an arguable point on the basis that the letter, to which we have referred, provided the employee with only three options, none of which was to continue in her present employment with her present hours of work and her present terms and conditions. If so, it was arguable it should be interpreted as a letter which indicated a second intention that her present contract should end. What it was dealing with was further consequential employment following determination by the unilateral act of the employer. If so, it is certainly arguable that it was a dismissal. That, no doubt, reflected the submissions that had been made on that occasion by Mr Ward and are largely replicated and expanded in his skeleton argument.
10. We now turn to see how this matter was dealt with by the Employment Tribunal. The Employment Tribunal having gone through the background had this to say:

"The question arises as to where an unfair dismissal may lie in the middle of those facts. In the circumstances of this case, which are a little bit unusual, we accept the submissions made on behalf of the respondent, the first of which is the one we prefer, that there was a consensual termination of the contract of employment and therefore no dismissal."

11. The Employment Tribunal found on a proper analysis of what had taken place at the beginning of May that there were discussions. Three options were put to the Applicant and she chose the third without pursuing either of the other two. The Applicant's case was that:

"The other two options were unreal and that either they were the result of a conspiracy between the Personnel Manager and the General Manager to get rid of the applicant, or that they were just unfair and wrong and therefore did not amount to the realistic basis of negotiations. But we reject that suggestion."

They then analysed the first two options:

"We can quite see the first of the options was not particularly attractive, 16 hours a week, although that reflected the state of affairs which had arisen on the appointment of the full-time Personnel Manager. We can quite see that the applicant's experience in personnel matters was limited to administrative matters and not to substantive personnel matters, and could quite understand how she would not be able to fulfil the role of Assistant Personnel Manager, which would require a knowledge of employment law and some degree of qualifications and it goes without saying, we can take notice of the fact that employment law has developed hugely since the 1980s when the applicant had perhaps a closer association with it, to what has to be faced by employers today."

12. They then considered the second of the options working in the Sales Department. It was of course a change of role. They recognised that:

"Her role as PA to the General Manager, though it had remained, the function of that role had diminished, partly because of technology, partly because perhaps of the personality clash between her and the General Manager. But the fact of the matter is, it was a realistic proposal with no loss of pay, a perceived loss of status, but one that was honestly and genuinely put to the applicant and which she chose not to negotiate any further, and it was at that point we see the consensual termination of the contract of employment, not a matter of pistol at her head, but a matter of withdrawing from discussions there and then and going with the redundancy package."

13. It was submitted to us that, in effect, it was wrong of the Employment Tribunal to construe those facts as a matter of law as amounting to a consensual determination of the agreement. The Employment Tribunal, it was submitted and as it seems to us, failed to distinguish between an agreement to be dismissed by reason of redundancy and an agreement to terminate employment.
14. It seems impossible to us to regard what took place as anything other than an agreement to accept dismissal by way of redundancy. That is what the letter to which we have referred makes absolutely clear.
15. Our attention was drawn to authorities. We were referred by Mr Edwards, who appeared on behalf of the Respondent, to Jones and Mid Glamorgan County Council,[1997] ICR 815 and, in particular, attention was drawn to the judgment of Waite LJ at page 818. There Waite LJ made clear that the courts and tribunals must always look at the substance of any termination to discover whether the degree of pressure placed on the employee by the employer to retire amounted in reality to a dismissal and we have that passage very much in mind at pages 818 C to 819 A. Our attention was also drawn by Mr Ward on behalf of the Applicant to Hellyer Bros Ltd v Atkinson & Dickinson [1992] IRLR 540, in particular, to the passages at paragraphs 15, 16, 20 and 21 and we have those passages very much in mind. It is of course a question of fact in each case and there are an infinite variety of factual situations and it is right that Employment Tribunals must be left to draw the lines to a large extent on their own experience.
16. However, in our opinion and having regard to what has been said in those two cases, this Employment Tribunal failed to distinguish between an agreement to accept dismissal for redundancy and effectively a retirement. Retirement does not seem to us to have been on offer, as we have already said, it was compulsory redundancy.
17. We do not wish to go beyond finding that the Employment Tribunal was wrong in failing to find that there had been a dismissal. In particular, we wish to say nothing that might impinge on a decision as to whether or not that dismissal was fair, or otherwise, but in our opinion there was a dismissal and it follows in those circumstances, despite (may we say) the valiant attempts of Mr Edwards to persuade us that the decision could stand, that the appeal is allowed.
18. This case must be remitted, we would think, to a differently constituted Employment Tribunal to determine whether or not this dismissal was unfair and to determine, if found to be unfair, an appropriate level of compensation.
19. It only remains for us to thank both Mr Edwards and Mr Ward for their assistance, for their brevity and, if we may say so, for the clarity of their skeleton arguments.