APPEARANCES
For the Appellant |
MR PETER WARD (of Counsel) Instructed by: Messrs Levens Solicitors Ashley House 235-239 High Road Wood Green London N22 8HF |
For the Respondent |
MR MICHAEL DUGGAN (of Counsel) Instructed by: Messrs Pannone & Partners Solicitors 123 Deansgate Manchester M3 2BU |
THE HONOURABLE MR JUSTICE MITTING
- The Appellant was employed as an Analyst, eventually as Senior Analyst, in the Financial Stability Wing of the Bank of England, from 3 February 1986 until his resignation on 29 March 2000. By an application received at the Employment Tribunal on or soon after 26 June 2000 he complained of unfair constructive dismissal and disability discrimination.
- The Employment Tribunal heard and received evidence and submissions over four days and by a decision entered on 4 February 2002 rejected both claims. It decided that he had not been constructively dismissed, had not suffered discrimination by dismissal under section 4 (2) (d) and 5 (1) (a) of the Disability Discrimination Act 1995, or by the Respondent's failure to comply with a duty imposed upon it by section 6 under section 5 (2) of the 1995 Act. The Appellant appeals against those decisions.
- The principal facts upon which the Employment Tribunal based its decisions are clearly set out in its Extended Reasons. Until the appointment of Alex Merriman as his immediate superior in July 1997 the Appellant's work had always been adjudged impressive or satisfactory by his superiors.
- In an appraisal of 17 December 1997 Mr Merriman made moderate criticism of the Appellant's sensitivity to others feelings, his judgment and his prose style. John Footman, acting Head of the City Group within the Bank and Mr Merriman's superior supported his criticisms of the Appellant's presentational style.
- On 19 February 1998 the Appellant's father died. The Employment Tribunal found that he was affected by his father's death and that some allowances were made by the Respondent for that.
- In June 1998 Mr Merriman gave to the Appellant an upward appraisal form by which the Appellant was to appraise Mr Merriman's performance. The Appellant's appraisal was unfavourable. Mr Merriman was upset by this. The Tribunal found him to be arrogant and blinkered. The Appellant spoke to Tim Kidd who was responsible for day to day supervision of his work about Mr Merriman's reaction. Tim Kidd offered to act as a mediator but in fact took the matter no further.
- Mr Merriman was on holiday in July 1998 and the Appellant at the end of July and the beginning of August 1998. His holiday proved stressful. His father-in-law, who suffered from metastatic cancer, spreading from the prostate, fell and shattered his leg. His aunt, also suffering from an inoperable tumour had an ear surgically removed and his late father's dog died also of cancer; an event which greatly upset his mother.
- On his return from holidays on 11 August 1998 he had an appraisal meeting with Mr Merriman and Tim Kidd. Mr Merriman noted improvement in the Appellant's presentational style but remained critical of his written analytical work. As the Employment Tribunal noted, no material was put before it to enable it to judge the Appellant's analytical capabilities.
- The meeting then moved on to what the Respondent should do about the Appellant's performance, as the Tribunal noted in paragraph 30 of its Reasons. The Respondent's decision in the Employment Tribunal's words "to take disciplinary proceedings" had been made by Mr Footman.
- In paragraph 9 of his witness statement he makes it clear that as a result of discussions with Mr Merriman and Mr Kidd the use of formal performance procedures was appropriate and essential. In paragraph 29 of its Reasons the Tribunal noted, without comment, part of a note of the meeting which stated:
"At this point Mr Merriman suggested that Mr Johnson's year of his performance was seriously at odds with his manager's perspectives and he therefore suggested closing this part of the meeting. He invited Mr Kidd to outline how the Bank wished to take matters forward. Mr Kidd said that it would now be necessary to impose a formal framework on Mr Johnson, as his performance was falling below the Bank's expectations. This meant that it was necessary for the Bank to issue a formal written warning about Mr Johnson's performance and to instigate stage 1 of the Bank's disciplinary proceedings."
- The Employment Tribunal noted in paragraph 30 that the Appellant challenged the accuracy of the note but made no finding in this part of its reasons about that question. That night the Appellant had a panic attack. He was sent home from work the next day by the Respondent's doctor as suffering from acute depression. The Employment Tribunal made no express finding about the cause of his acute depression but it noted in paragraph 33 without comment the opinion of Dr Elza Eapen, a Consultant Psychiatrist, that :
"Matters came to head a few weeks ago when he went for an interim appraisal with his immediate boss who proceeded to talk about disciplinary procedures against him for poor performance. He became acutely anxious following this incident and has clearly become depressed since then. He has not been back to work since. It is also significant in this context to note that over the last few months there have been other stresses including bereavements, with his father dying in February 1998 of a recurrence of non Hodgkin's lymphoma. His father-in-law suffers from prostatic cancer and is deteriorating and his maternal aunt has just been diagnosed as suffering from cancer as well."
- It also had the undisputed evidence of Dr Lipsedge, a Consultant Psychiatrist, in a letter dated 9 June 1999, that Dr Eapen had correctly identified the threat of disciplinary proceedings as "the trigger for this episode."
- Thereafter the Employment Tribunal found in summary:
(1) that on 18 December 1998 Bank staff obtained from the Appellant his complaints about Mr Merriman;
(2) a senior personnel manager, Sue Bett, investigated his complaints in January and February 1999 and reported on 25 February 1999 noting criticisms of others about Mr Merriman's manner, ranging from insensitive to bullying
(3) in consequence, Mr Merriman went on a course of counselling to help with "that aspect of his management". The Tribunal noted that from the manner in which Mr Merriman gave his evidence it had difficulty in seeing how it had changed his management style;
(4) the Appellant should have gone on half pay under the terms of his contract on 11 February 1999, but was in fact kept on full pay until 1 October 1999;
(5) on 9 June 1999 Dr Lipsedge recommended that the Appellant should be found a suitable job and should return to work, preferably in a different department away from Mr Merriman;
(6) on 21 June 1999 John Matheson, Head of Personnel, who had identified a secondment to "Blind in Business" under Mr Kent (formerly one of the Appellant's managers with whom he had got on well), which might be a suitable secondment. Though the Employment Tribunal did not expressly say so, it was common ground that the Appellant was unenthusiastic about this suggestion.
(7) on 21 September 1999 Mr Matheson wrote to the Appellant notifying him that his pay would be reduced to half in accordance with his contract, suggesting retirement on grounds of ill health on an ill health retirement pension. Mr Matheson stressed in the letter that this option was available "only should you choose to apply for it";
(8) on 19 November 1999 the Appellant accepted that ill health retirement seemed the most appropriate way forward but queried the pension terms;
(9) a letter dated 12 December 1999 from the Appellant to his trade union representative was copied privately to someone in the Bank by someone in the trade union;
(10) various proposals for improving the Appellant's pension were then canvassed in correspondence;
(11) by a letter dated 29 March 2000 the Appellant formerly tended his resignation "in order to take up the ill health retirement pension" offered;
(12) the pension was paid from 1 April 2000.
- The Appellant's case at the close of evidence was advanced in a written skeleton submission. As to unfair constructive dismissal, his case was that the Respondents had breached his contract from 1998 until 29 March 2000 by a series of overlapping, cumulative acts, identified in paragraph 6 of the Skeleton Argument as follows:
a) "Allowing or causing Mr. [Merriman's] ill treatment;"
(we have corrected a mis-identification of the person involved)
b) "Unfairly and indefensibly activating disciplinary proceedings that, coupled with the above, caused the Applicant's collapse, particularly in the knowledge that he might have been susceptible;
c) Its handling of his complaint over that ill treatment, particularly not carrying out a sufficiently wide enquiry and denying the Applicant an opportunity to check the accuracy of the Bank's investigation and, even on such evidence, then not imposing an appropriate sanction on Mr Merriman;
d) Even if the decision not to discipline Mr Merriman was a reasonable one, such disparity of treatment only renders the decision to discipline Mr Johnson on no evidence at all the more reprehensible;
e) Not truthfully informing him of its outcome;
f) It pressurising the Applicant to accept a totally unsuitable secondment under threat of having his sick pay halved or even stopped;
g) Saying there was a "confluence of medical opinion" that he was fit enough to return to work when not only was this untrue the evidence could hardly have been more contrary, in short the Bank blatantly lied to the Applicant that his doctors had endorsed the proposal;
h) Once it became known this would be too injurious, immediately doing an about turn about all secondments and placing him 'over a barrel' so as to ensure he would never work in the Bank again without considering whether any reasonable adjustments could be made to return him to work;
i) Secretly being a bedfellow with his trade union, conspiring with BIFU in the unavoidable knowledge this was in complete breach of his confidence;
j) Providing an ill-health pension which knowingly did not cover his basic domestic outgoings; and
k) Despite knowing it would continue to injure his health and thwart any possible recovery, subjecting that pension to a 3-yearly review cycle with the possibility of it being reduced or stopped, thereby causing the chronic destabilisation of Mr Johnson's health."
- The submissions ended with this sentence:
"In short, having caused the Applicant's breakdown in the first place the Bank has blocked his healing, in all probability for the remainder of his life."
- The Applicant did not understate his case. In an earlier passage in the Skeleton Argument, in relation to the disclosure by the trade union to the Bank of a letter by the Appellant to it, the submission suggested that:
"…[it] serves to ram home the connotations of abuse of power, sleaze and corruption that underlie this whole, sorry and sordid account. Putting it more simply, can the Bank be trusted?"
- The Tribunal directed itself as to the law by citing and correctly summarising Western Excavating (ECC) Ltd v Sharpe [1978] ICR 221 at paragraph 59. It then considered each itemised alleged breach of contract in turn. It found all but one not proved or not capable of being a breach of contract. It also found that in any event the Appellant had not acted on the breaches, proven or alleged, by treating the contract as at an end.
- In paragraph 64 the Employment Tribunal found that there was a breach of the implied term of mutual trust and confidence "in relation to the treatment of [the Appellant] by Mr Merriman in June until 11 August 1998."
- This Tribunal understands that finding to mean that the breach consisted of Mr Merriman's bullying of the Appellant. The Employment Tribunal noted that the bullying identified by the Appellant "related to" the upward review of Mr Merriman and the interim appraisal meeting on 11 August 1998. It is clear from its findings on breach (b) that it did not categorise as bullying the warning of the initiation of the review of the Appellant's performance by Mr Merriman and Mr Kidd.
- The Employment Tribunal found that the claim of constructive dismissal arising from breach by bullying failed because the Appellant did not act upon it; because he did not resign until 19 months later and then for reasons to do with the review of his pension.
- Mr Ward for the Appellant criticises both conclusions. He submits, first, that the Employment Tribunal oversimplified and misstated the principle of affirmation by looking only at the length of delay without asking itself what the reason for it was. If it had, he submits, it would have found that the reason was illness caused by bullying and that therefore the Respondent should not be "saved by the period of the Appellant's illness." Put in another way, he submits that so long as the Respondent's conduct (bullying) was causative of the Appellant's illness, he retained the option to treat breach by that bullying as a repudiatory breach entitling him to leave, however long had elapsed since the bullying had occurred. Mr Ward submits, secondly, that the Employment Tribunal misdirected itself by deciding that the reasons given in the resignation letter were determinative or definitive of the cause of his quitting.
- Mr Ward's first proposition, in our view, confuses two propositions. First, causation of injury or loss resulting from breach of contract, or breach of a duty to take care, as to which there is no principle or time limit limiting the duration of the effects of injury or of loss, in respect of which damages can be awarded. Secondly, the principle that an innocent party to a breach of contract must elect whether or not to treat the breach as repudiatory and as discharging him from further performance of the contract; or to continue with the contract.
- In the second instance, if he expressly affirms the contract or does so by implication, he will lose the right to treat himself as discharged, or in the language of employment law, to treat himself as constructively dismissed.
- While this Tribunal can envisage as a theoretical possibility circumstances in which the conduct of an employer is such as to disable an employee from making an effective election, by for example rendering him incapable of making rational decisions about his circumstances, the facts found by the Employment Tribunal exclude such a possibility in this case. The Appellant was throughout able to consider, make proposals for and negotiate about his future employment or retirement. He was not disabled by his illness from doing so.
- Mr Ward's second proposition misreads the Employment Tribunal's finding. The Tribunal simply took the fact that the Appellant referred to pension reviews in his resignation letter as a factor to be taken into account when determining whether or not he had acted on the earlier breach (bullying). It was entitled to do so.
- For those reasons this Tribunal rejects Mr Ward's criticisms of the reasoning of the Employment Tribunal on this issue.
- As to the alleged breach (b), the Employment Tribunal concluded that, first, the Respondent was entitled to commence disciplinary proceedings under the provisions of the Appellant's contract; a conclusion which is not challenged; and, secondly, that in fact it did not do so on 11 August 1998 it merely gave warning that they might be commenced.
- The first conclusion, which is plainly correct, disposes of this issue. If, contrary to the Employment Tribunal's finding, the commencement of disciplinary proceedings was a breach of contract, a warning that a breach was about to be committed would be an anticipatory breach of contract giving rise to the same right to treat the contract as discharged as a completed breach; but given the Employment Tribunal's finding that issue is wholly academic.
- Mr Ward's submission that the Appellant was in fact dismissed, which he set out in paragraph 10 of his Skeleton Argument, is, as we think he now acknowledges, wrong. He nonetheless submits that it was a breach of contract to threaten or institute disciplinary proceedings against the Appellant because in doing so the Respondent breached the term for trust and confidence between employee and employer.
- This Tribunal readily accepts that if disciplinary proceedings had been undertaken arbitrarily and oppressively, as in Alexander Russell Plc v Holness, a decision of the Employment Appeal Tribunal (EAT/677/93) sitting in Edinburgh on 24 January 1994, that either the initiation of disciplinary proceedings or the threat of them could have breached that term. But the Employment Tribunal made no such finding. It found that the decision was taken mainly by Mr Footman (see paragraph 30 of its decision) and it expressed no criticism of his motives or actions.
- The Employment Tribunal's findings of the allegations of breach from (c) to (j) inclusive are not the subject of separate criticism in this appeal and can be dealt with shortly. The Tribunal found no breach in any of the respects alleged. Its findings are, in the view of this Tribunal, unimpeachable.
- Of the ten allegations of breach of contract made by the Appellant, the Employment Tribunal found only one proved the first, the bullying. It therefore rejected the Appellant's case that the Respondent's conduct amounted to persistent and continuing repudiatory breaches of contract. There is therefore no room for the contention advanced by Mr Ward that the Employment Tribunal should have considered the effect of cumulative breaches of contract. As it found none there was nothing to consider.
- Further, the facts of this case are to be distinguished from the analysis of Glidewell LJ in Lewis v Motorworld Garages Ltd [1985] IRLR 465 in which he observed that the breach of this implied obligation of trust and confidence may consist of a series of actions on the part of the employer which cumulatively amount to a breach of the term though each individual instant may not do so.
- In the view of this Tribunal one breach of contract followed by conduct not amounting, separately or cumulatively, to a breach of contract in the following 19 months cannot amount to a series of actions which cumulatively amount to a breach of the implied term for trust and confidence.
- The second limb of the appeal is that the Employment Tribunal should have held that the Appellant's constructive dismissal amounted to unlawful discrimination under section 4 (2) (d) of the Disability Discrimination Act 1995. The Employment Tribunal held that it was bound by the decision of this Tribunal in Commissioner of Police of the Metropolis v Harley [2001] IRLR 263 to hold that the phrase "by dismissing him" in section 4 (2) (d) did not include constructive dismissal.
- Subsequently a different division of this Tribunal has held that it does: see Catherall v Michelin Tyre Plc [2003] IRLR 61 at paragraph 32. Like that division, this Tribunal prefers the reasoning of the Employment Appeal Tribunal in Derby Specialist Fabrications Ltd v Burton [2001] IRLR 69, under identically-worded provisions in the Race Relations Act 1976 and accepts the Respondent's concession that the law is now correctly stated in Catherall. However, that conclusion does not assist the Appellant. The Tribunal's finding, which we uphold, is that the Appellant was not constructively dismissed. That disposes of his complaint of discrimination by dismissal under section 4 (2) (c).
- Mr Ward submits that the Employment Tribunal should have first considered whether or not the Respondent had unlawfully discriminated against the Appellant by failing to comply with a duty imposed by section 6 of the 1995 Act in relation to the Appellant under section 5 (2) (a), and if it found that they had done so should have gone on to determine whether its unlawful acts amounted to a repudiatory breach of contract entitling the Appellant to treat himself as discharged from further performance and in addition to go on to consider the free-standing remedies set out in section 8 of the 1995 Act.
- Section 6 (1) (a) of the 1995 Act provides:
"Where—
(a) any arrangements made by or on behalf of an employer…
place the disabled person concerned at a substantial disadvantage in comparison with persons who are not disabled, it is the duty of the employer to take such steps as it is reasonable, in all the circumstances of the case, for him to have to take in order to prevent the arrangements or feature having that effect.
Section 6 (3) provides:
"The following are examples of steps which an employer may have to take in relation to a disabled person in order to comply with subsection (1)—
…
(b) allocating some of the disabled person's duties to another person;
(c) transferring him to fill an existing vacancy;
(d) altering his working hours;
(e) assigning him to a different place of work;
(f) allowing him to be absent during working hours for rehabilitation, assessment or treatment…"
- This part of the Appellant's case was dealt with shortly and on a superficial reading not wholly consistently by the Employment Tribunal. It considered that the only potentially relevant steps identified in section 6 (3) were those set out in (b), (c), (d) and (f). It concluded that (b) was not applicable because the Appellant was wholly absent from his duties – a decision which was plainly correct; and as to (f) that the Respondent would have allowed the Appellant to be absent for rehabilitation assessment or treatment on the basis of their treatment of him in other respects – a conclusion which Mr Ward does not criticise.
- The difficulty, Mr Ward submits, arises with the Employment Tribunal's findings on (c) and (d). The Tribunal's findings are set out in paragraphs 100 and 101 of its Extended Reasons and are as follows:
100 "We considered section 6 (3) (c) which was transferring Mr Johnson to fill an existing vacancy. In an organisation the size of the Respondent with approximately 1,850 employees it might well have been that there was an existing vacancy but neither party pointed to one nor was it argued that this was an adjustment that should have been made.
101 Section 6 (3) (d) provides for alteration or working hours. This was not discussed on the evidence that we have before us. It is, however, clear from Mr Matheson's evidence that the Respondents were prepared to ease Mr Johnson back into work which would include reduced working hours. On the evidence we noted that Mr Johnson was given time off to take his father to hospital in spring 1998 and we have no reason to conclude that he would not have been given time to work himself back into work had he been able to return."
- Part of paragraph 101 was inconsistent with Mr Matheson's evidence in cross-examination as noted by the Chairman, which was to this effect:
"I did not think graded hours an option for us.",
and with the Employment Tribunal's own finding at paragraph 80, which was as follows:
"There is no evidence that it would be too injurious for Mr Johnson to return to work, indeed the medical evidence of Dr Lipsedge is that this would be rehabilitative. The Respondent has some 1,850 employees and the Respondent did not look to a secondment to assist Mr Johnson to come back to work. The Respondent has not sought out vacancies in different departments but the Tribunal takes note of the caution in Dr Lipsedge's report that this could be difficult for Mr Johnson to accept…"
- Further, Mr Ward submits the Employment Tribunal set too high a hurdle for the Appellant in its overall conclusion in paragraph 105, which was as follows:
"The burden of proving a failure to make reasonable adjustments falls on Mr Johnson. He has failed to challenge the adjustments that were put forward in evidence and has not proved on the balance of probabilities that the Respondent has failed to make reasonable adjustments."
- He submits that it was not for the Appellant to identify vacancies but for the Respondent to do so or to prove that there were none. This Tribunal accepts that it would have been an error of law for the Employment Tribunal to treat as determinative of the issue the fact that the Appellant did not or could not identify a suitable vacancy (following Cosgrove v Caesar and Howie [2001] IRLR 653) and that the failure of an employer to give any thought to suitable vacancies can give rise to a finding that it has not discharged its section 6 duty (ibid).
- But the Employment Tribunal did not fall into that trap. A careful analysis of its findings at paragraphs 42 to 45, against a background of an undisputed extract from a tape recording made by the Appellant of his discussion with Mr Matheson about the Appellant's position on 8 September 1999 shows what happened.
- The Tribunal noted at paragraph 42:
42 "Mr Johnson saw Dr Lipsedge on 9 June 1999. The report of Dr Lipsedge dated 9 June 1999…records:
"I am sure that the time has come to reinforce Dr Eapen's recommendation that the date for his return to work should be set and that he should be found a suitable job. As you know, I firmly believe in the principle that the best location for rehabilitation is the work place itself and I think it is important now for Mr Johnson to begin to return to work to the Bank in a graded fashion. The longer he postpones this resumption of work, the harder it will be and there is a risk that he will end up stagnating indefinitely on a plateau of partial recovery.
I would have thought that his relationship with his manager had reached that stage of irretrievable breakdown although you would be able to judge better than myself whether there would be any scope for mediating between Mr Johnson and Mr Merriman perhaps by utilising Bill Mitchell's particular skills in dealing with clashes of personality in the work place. However, it might be more realistic for Mr Johnson to work in a quite different department although I can anticipate a number of problems to do with this demoralisation, loss of face, sensitivity to the attitudes of colleagues, etc. Nevertheless I think the time has come to bite the bullet."
43 On 21 June 1999 a meeting took place at the Blossom's Inn Medical Centre Mr Johnson attended. Dr Gill was present and Mr J Matheson, the Head of the Personnel Division of the Respondent attended with Ms J Williams. At this meeting Mr Matheson explained the options for re-entry ant that the Bank had explored the possibility of an external secondment with Pen Kent (who used to be Mr Johnson's Manager) and that Mr Kent had identified a job with "Blind in Business" which might be a suitable secondment. Mr Matheson had very few other secondments available to him.
44 A further meeting took place at the Medical Centre on 8 September 1999 at which Mr Johnson attended accompanied by his wife. Mr Matheson, Mr Gordon and Miss Coffey were present for the Bank. By this time Mr Johnson had been paid in full by the Bank for some 13 months and at the meeting there was talk of ill-health retirement. A discussion of the scaled up pension followed."
- In Mr Matheson's written statement he noted in quotation marks, and by reference to a timed extract from the tape recording made by the Appellant, the following words:
"The only realistic way I have to get better at all is to get away from the Bank."
From the context in which that quotation is set, that statement was made on 8 September 1999.
- We return to the Employment Tribunal's decision at paragraph 45:
45 "Mr Matheson wrote to Mr Johnson on 21 September 1999 after explaining that Mr Johnson had been on full pay for 13 months although only eligible for a period of six months, and Mr Matheson had regretfully decided to place him on half pay with effect from 1 October 1999 which would continue for six months. The letter goes on to state: -
"Secondly I would like to turn to the question of your future employment with the Bank. As we both recognised in our meeting, your return to the Bank in the medium or even long term seems unlikely based on your current state of health. As is usual in such circumstances we have considered the options for both you and the Bank and it is our opinion, backed by the medical advice available, that an ill-health retirement pension would seem to be the more appropriate course of action for you. I must stress that this option is available only should you choose to apply for it…I would also reconfirm that this pension will be subject to review by the Funds Committee of Management after a period of three years…"
46 By a letter dated 19 November 1999 from Mr Johnson to Mr Matheson, Mr Johnson accepted that ill-health retirement seemed the most appropriate way forward but stated that the pension was insufficient and objected to the three year review…"
Thereafter, the only communications between the Appellant and the Respondents concerned the terms of his impending retirement and pension.
- Thus what happened, as the Employment Tribunal found, was that Dr Lipsedge recommended a return to work, Mr Matheson identified a secondment which he believed to be suitable, the Appellant was unenthusiastic and willingly joined in discussion of the alternative – early ill-health retirement on pension. Mr Matheson offered it to him, leaving it to him to choose. He chose that course but sought to negotiate more favourable terms.
- Given that the list in section 6 (3) is expressly stated to be a list of "examples of steps which an employer may (our emphasis) have to take in relation to a disabled person in order to comply with (1)." The failure fully to explore or to take any one such step does not necessarily amount to a breach of duty under section 6 (1). In the circumstances as found by the Employment Tribunal, as explained above, the Employment Tribunal were entitled to find that there was no breach.
- The interesting question raised by Mr Ward about the interaction of section 5 (2) and section 4 (2) (d) does not therefore arise for decision on the facts of this case.
- This Tribunal, having reviewed the decision of the Employment Tribunal, in detail and with the aid of submissions from Mr Ward and Mr Duggan, unhesitatingly and unanimously concludes that its decision contains no error of law or perversity. This appeal is therefore dismissed.
(Discussion)
- We reject your application for permission to appeal. In our view there is no realistic prospect of success on the grounds you have canvassed, nor any other substantial reason for the Court of Appeal to look at the question.