United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MRS AYSE VAHIBOGLU (Representative) Instructed by: Free Representation Unit 4th Floor, Peer House 8-14 Verulam Street London WC1X 8LZ
For the Respondent	MR JAMES HURD (of Counsel) Instructed by: Sequence (UK) Ltd HR Operations 4th Floor Liver Buildings The Strand Liverpool L3 1JH

SUMMARY

Unfair Dismissal

Allegation that ET had failed to make concise findings of fact on Appellant's case for constructive dismissal for breach of contract following reorganisation. Appeal dismissed. No fundamental breach of contract and in the case of one Appellant no causation.


 


HIS HONOUR JUDGE BIRTLES

Preface

1. An appeal to this Tribunal from the Employment Tribunal is on very limited grounds. It is an appeal only on a point of law and we emphasise that because we are not able to interfere with the judgment of an Employment Tribunal on the ground that if we had been sitting as an Employment Tribunal we would have reached a different decision. That is not a point of law.
2. It is our unanimous view that this reorganisation was poorly handled. It would have been a great deal better if the consultation process had ended with a comprehensive set of contractual changes to be introduced by the Respondent rather than introducing them in a piecemeal fashion over a substantial number of months. That would have cleared the air considerably so that there was no possibility of misunderstanding.

Introduction

3. This is an appeal from the decision of an Employment Tribunal sitting at London (Central) on 28 July 2003. The reserved decision of the Tribunal was sent to the parties and entered in the Register on 2 September 2003. The Chairman was Mrs E Prevezer. The members were Mrs D Harlow and Dr S N Deskmukh.
4. The Employment Tribunal unanimously decided that both of the claims of Miss Soleimany and Mrs Kirk for constructive unfair dismissal should be dismissed. Both Appellants were represented at the Tribunal by Mr Hallen, a solicitor, and the Respondent was represented by Mr Hurd who has appeared in front of us today.
5. As the Employment Tribunal point out in its Extended Reasons these cases arose out of a reorganisation of the Respondent's business and from the withdrawal of the Royal and Sun Alliance from their support of the business. The Respondent at the material time were employing approximately 3,600 people all over the country in the estate agent business. These two Applicants (the Appellants here) worked at an office in Hammersmith.
6. The Tribunal heard evidence from both of the Applicants and read witness statements from other witnesses in support of the Appellants who did not attend to give oral evidence, but who also had been employed by the Respondent. The Respondent called evidence from a Mrs Nimmo, the former Human Resources Manager, and a Mrs Pawsey who had been the Applicants' line manager. There was in addition a substantial bundle of documents before the Employment Tribunal.

Employment Tribunal Decision

7. The Employment Tribunal decision is in conventional form and begins with findings of fact (paragraphs 1 through to 7), sets out the issues (paragraph 8), the law (paragraph 9), records the submissions (paragraphs 10 and 11) and reaches conclusions (paragraph 12) relating to Mrs Soleimany and (in paragraph 13) relating to Mrs Kirk.
8. So far as the material facts are concerned, we incorporate paragraphs 1-7 in this judgment:

"1 Both of these Applicants had a contract of employment under the old rules of the Company in which the Company reserved the right to alter or amend its terms and conditions of employment and introduce new terms. It also reserved the right to amend any employees' duties and changes to her place of employment due to business needs. It is clear that from December 2000 there were changes \n the business because we saw a letter dated 13 December 2000 from the Royal and Sun Alliance when they were going to try and consult with members of the staff and try to introduce some way of electing persons for consultation.

2 On 12 December 2001, letters were written to these applicants saying that from 1 January the Royal and Sun Alliance property services ceased to be part of the UK life insurance company etc as they were making changes to the business. It assured them that the changes were in the name of the employer and would not affect the contract of employment in any other way and confirmed that the terms and conditions of employment would continue as if under the current contract and the pension arrangements would remain the same. Any changes were due to take place on 1 January 2002.

3 On 25 January, a letter was written to these Applicants setting out the main changes to the contract and those to which these Applicants object. They were:-

(i) Instead of being property managers, they were going to be called property co-ordinators.

(ii) Their annual salary was going to be increased to £20,000.00 per annum and that was to compensate for the loss of a commission system which both these Applicants were being paid, based on the number of visits, contracts and leads that they had during previous months. Also, because they had previously gone to visit these properties and the contractors who were working on the properties, they had a company car. Instead, they were told that they were not going to do any more visiting and that they would have to remain in Hammersmith in the position of property co-ordinator and that the visits would be done through the local branches. They were told that the Company was seeking to introduce a performance appraisal bonus which could be up to ten per cent of the annual salary to compensate for the loss of the commission.

(iii) There were new terms and conditions set out in a new handbook which were more or less the same as the old ones as far as the contract was concerned. The letter showing the re-structuring of the customer service centre in Hammersmith was sent to the parties, which set out the line management. One department was going to be broken down into two departments: Client Accounts would be bought under property management and managed by Bernadette Weeks and the Tenancy Department managed by Sheila Cronin.

(iv) On 1 March 2002 they got an employment schedule which summarised the new terms and conditions of the contract of employment, which set out the new remuneration and the new bonus scheme but there was a problem about the holidays.

(v) Under the old contract, every employee after fifteen years was entitled to 25 days' holiday, and under the new system all employees would get 22 days.

(vi) These employees had been with the Company for some considerable time, Miss Soleimany had been there for thirteen and a half years, could expect to receive an extra few days' holiday if she had stayed with the Company for a further two and a half years, but this was taken away by these new terms. Miss Kirk would have had to wait some considerable time before she became entitled to extra holidays.

(vii) These were set out in a schedule and they were asked to sign an agreement to these terms and conditions. They were supposed to be effected from 1 April.

4. On 18 March [2002], there was a property co-ordinator meeting to which these applicants attended, together with Carol Pawsey, who had been elected as their representative and to consult with them. Theresa Allen, who had been trained to help people as a mentor or buddy under the "Buddy System" test was to train these two applicants who were asked to act as mentors for new employees. The notes from the meeting of 18 March, which they all attended, dealt with a lot of the issues that were being discussed and also this new idea of a "Buddy" group so that each team could help each other.

5. On 3 April, Miss Soleimany sent in her letter of resignation in which she set out the reasons for her decision. She stated that

(a) Her title had changed from property manager to property co-ordinator.

(b) Her role was now purely administrative as they had taken away the role of the property inspections or client visits.

(c) That she had to do some training of new employees.

(d) They had taken away her commission.

She said that she was aware that some of the changes would benefit the Company but they did not seem to benefit her. She almost immediately went into new employment at an increased salary but with no car, and on leaving the employment she gave back her car.

6 Mrs Kirk stayed in employment for some time. She retained her car and was paid at the salary of £20,000.00 per annum, which was backdated from January 2002, and was paid all outstanding commission from the year before. Mrs Soleimany admitted that she had been paid the commission that she had earned in December 2001 but raised an issue that she had got leads in January 2002, the commission on which had not been paid. The Respondents argued that she had benefited from the increase of salary for that time. Mrs Kirk went on holiday in May and then in June she also resigned, having told us that she was head hunted by another firm of estate agents at an increased salary and she immediately left in July to join this new employment.

7. Both these Applicants had left for new employment at an increased salary and the downside was that they did not get a company car in this new employment but they did have opportunities to visit clients and to get out of the office."

9. They are findings of fact. They cannot be disturbed by this Employment Appeal Tribunal unless there is no evidence upon which the Employment Tribunal could have come to a particular finding of fact.
10. The conclusions are, as I have said, set out in paragraphs 12 and 13:

12 Mrs Soleimany - There was no fundamental breach of contract. She resigned because her role had been changed slightly and she was not able to get out of the office. It was accepted that this role of getting out of the office was for half a day or one day a week but it was not a substantial part of her work, but she enjoyed using the car to go and visit clients and contractors and when this was taken away it made a difference to her feeling about the job and she therefore sought other employment. The performance bonus which was promised had not been decided upon at that time and therefore it was not known to her at that time what arrangements were going to be made to pay the bonus, neither had there been any arrangements regarding the company car which she was using, so we conclude that there was no fundamental breach, the companies were within their rights to re-organise and both of these Applicants knew the details.

13 Mrs Kirk - As well as the reasons that we have given for Mrs Soleimany's claim not succeeding, it is clear that Mrs Kirk waited too long. She knew the details in January and if there had been a fundamental breach she had affirmed the contract by working there right through until July. She gave notice in June and the reason we find that she left was because she was head hunted with an increase in salary and up to the time that she left she had kept her car so there was no reason to think that if she had remained in employment, that the car would have been taken away even though she did not need it for her work for the Company."

11. The Notice of Appeal sets out a number of grounds of appeal, but I think it is helpful if we deal with the submissions made by Mrs Vahiboglu who has appeared today through the Free Representation Unit on behalf of both Appellants. I think I am right in saying that the Notice of Appeal and the Skeleton Argument were drafted by the Appellants themselves, but today they have had the benefit of the, if I may say, very helpful assistance, as we have had, from the submissions made by Mrs Vahiboglu.
12. The first ground of appeal is that there was an error of law in that the Employment Tribunal misunderstood the terms of the contract of employment in relation to the notice periods. Mrs Kirk was entitled to a period of six weeks' notice for any changes in the contract of employment. Mrs Soleimany was entitled to 12 weeks' notice of any changes in her contract of employment: see paragraph 2.1.1 of the Terms of Appointment for both Appellants, EAT bundle page 50.
13. The Tribunal made findings of fact about some of the proposed changes that were to be made. It referred to a letter of 13 December 2000, giving intention of changes (paragraph 1), the letter of 12 December 2001 (paragraph 2), the letter of 25 January 2002 (paragraph 3) and most importantly recorded at paragraph 3 (iv) that on 1 March 2002 the Appellants got an employment schedule which summarised the new terms and conditions of the contract of employment which set out the new bonus scheme, but there was a problem about holidays. That seems to us to be a most material document.
14. Mr Hurd for the Respondents has frankly conceded that the main changes or a substantial number of the changes in the contract of employment for both Appellants were given in breach of the contractual requirement to give the appropriate notice. The changes notified on 1 March 2002 were to come into force on 1 April 2002.
15. Mrs Vahiboglu says that there is nothing in the Tribunal's decision which indicates that they address this matter at all. If one looks at the conclusions in respect of Miss Soleimany and Mrs Kirk there is no reference at all to the fact that the changes were in breach of contract. That is correct, but the Tribunal cannot have been unaware from the dates that it found as a fact, and from the dates that the documents that were in evidence and indeed the notice periods, that there had been a breach of contract in respect of the notice periods. However, it did look at the matter in the round and indeed the submissions of Mr Hallen for the Appellants appear to have done so as well.
16. We cannot accept that the Tribunal ignored the notice periods. What it did was to look at all of the matters raised by the Appellants and decide that there was no fundamental breach of contract; and that of course is the critical test. It is not a breach of contract per se, but a fundamental breach of contract which it is necessary for the Appellants to prove in order to overcome the first hurdle before the Tribunal. They failed to do so.
17. The second ground of appeal is that there was a breach of the implied term of trust and confidence. That was specifically pleaded in the Originating Applications and evidence was led about it. The submission is that the findings of the Employment Tribunal do not specifically refer to or use the words "there is a claim for breach of the implied term of trust and confidence. We find on the facts that there is or is not such a breach."
18. In our judgment, when one looks at the record of the submissions, paragraph 10, and the conclusions in paragraphs 12 and 13, the Employment Tribunal has specifically decided that there was no fundamental breach of contract. It is not necessary for an Employment Tribunal to record every submission that is made to it. It is sufficient if its reasons indicate to the parties the reasons why they have won or lost: see Meek v City of Birmingham District Council [1987] IRLR 250.
19. The third ground of appeal is that the Employment Tribunal erred in law in dealing with the issue of anticipatory breach. It is argued that there was the threat of the withdrawal of the motorcars used by each of these Appellants as part of their previous work. That threat of withdrawal amounted to an anticipatory breach.
20. In our judgment, when one looks at the evidence before the Tribunal, it is first of all not at all clear that the Respondent was intending to take away the Appellants' motorcars and, second, as to when that would occur: see the notes of the cross-examination of Mrs Kirk (EAT bundle page 41) and the emails at EAT bundle page 76. In particular, in the email from Carol to Mrs Kirk and a Ms Denise Curtin, this is said:

"As this is a Company announcement [that refers to a previous more general email from a Mr Bruce Sayers, the Reward Manager of the Respondents], it is, by it's nature, fairly broad and undetailed and will not reflect individual circumstances. I am therefore unable to comment at this stage as to how, or if, the new policy will affect you until we receive further detail."

21. In our judgment this is simply far too vague and imprecise to constitute an anticipatory breach of contract. Indeed, at the time that Mrs Kirk left the company at the end of July 2002 she was still in possession and had the use of her motorcar. Miss Soleimany had left very shortly after 1 April.
22. The fourth ground of appeal relates to errors of fact-finding in the Employment Tribunal decision. In respect of both Miss Soleimany and Mrs Kirk the complaint is that the Employment Tribunal in paragraphs 12 and 13 has not set out in detail each and every allegation of fundamental breach of contract or indeed breach of contract made by the Appellants in their resignation letters and in their Originating Applications.
23. In our judgment there can be no doubt that the Employment Tribunal had that in mind. It had the documents. It had the witness statements and heard the evidence of both Appellants. In our judgment it is not incumbent upon the Tribunal to record each and every breach of contract and form a view about that individual breach of contract when it has, having stood back, looked at the alleged breaches or admitted breaches as a whole and found in each case that there was no fundamental breach of contract. There is therefore no error of law there.
24. The fifth ground of appeal relates to Mrs Kirk and the argument is that the Employment Tribunal erred in its application of the law in relation to constructive dismissal. Paragraph 9 of the decision says this:

"9 It is known accepted law under Western Excavating Company v Sharp [1977], that there are three tests to decide whether somebody is entitled to resign as a result of an employer's conduct. There has to be a fundamental breach of the employment contract entitling the Applicant to resign. He has to resign because of the breach and there has to be no delay in so acting."

25. Mrs Vahiboglu submits that the Tribunal was in error in using the phrase "there has been no delay in so acting". She submits that this is wrong in law and that an employee is entitled to a reasonable period of time to consider his or her position before resigning and claiming constructive dismissal. Mr Hurd does not dissent from that view of the law and it is clearly correct.
26. However, when one looks at paragraph 13 of the decision itself in relation to Mrs Kirk it is quite clear that the Employment Tribunal were not applying a rule of law which said that an employee has to resign immediately; in other words, with no delay. It looked at the period and said that Mrs Kirk knew the details in January and if there had been a fundamental breach she had affirmed the contract by working there right through until July. She gave notice in June.
27. It does not matter in our view whether one takes January 2002 or 1 March 2002 or indeed 1 April 2002, or a combination of those dates. The fact of the matter is that the Employment Tribunal clearly considered that Mrs Kirk had stayed too long and thereby affirmed the contract. They were not applying a "no delay in so acting" test.
28. Finally, for the sake of completeness, although there is, I think, no appeal against this finding, the Employment Tribunal also found as a fact that the reason that Mrs Kirk left was:

"…because she was head hunted with an increase in salary and up to the time that she left she had kept her car so there was no reason to think that if she had remained in employment, that the car would have been taken away even though she did not need it for her work for the Company."

29. That is a clear finding of fact, that there was no causal connection between any alleged fundamental breach and the reason why Mrs Kirk left the employment of the Respondent. It is a finding she left for another reason. That is not a finding of fact which is challenged and is not a finding of fact behind which we can go. It follows that even if we were wrong about all of the other matters raised before us today, Mrs Kirk's appeal would still fail.
30. Finally, there was a ground of appeal on the basis of perversity. It is sufficient for us to refer to the decision of the Court of Appeal in Yeboah v Crofton [2002] IRLR 634. This now poses an extremely high test for an Appellant to satisfy us that the Employment Tribunal has erred in law.
31. In order to get an appeal on the ground of perversity underway, it is usually necessary to obtain the relevant notes of the Chairman of the Employment Tribunal so that we can be addressed on the failures in reasoning which would lead us to conclude that this was a decision which no reasonable Tribunal could have reached.
32. We do not have those notes of evidence, save for a short passage in the cross-examination of Mrs Kirk. On the basis of our previous findings we can find no basis on which to conclude that the decision of this Tribunal was perverse in law.
33. It follows for these reasons therefore that this appeal will be dismissed.