United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR FRED EDWARD JNR Representative Cain & Abel Law Firm 239 Missenden Inville Road London SE17 2HX
For the Respondent	MR N WEINIGER (of Counsel) Instructed by: London Borough of Waltham Forest PO Box 6932 Sycamore House Town Hall Complex Forest Road Walthamstow London E17 4UL

SUMMARY Unfair Dismissal Constructive Dismissal

A novel point on whether the 'last straw' in a constructive dismissal case has to involve at least some blameworthy or unreasonable conduct by the employer - as found by the ET - our decision was that t he perception of the employee at the time is relevant. Leave to appeal granted.


 


HIS HONOUR JUDGE PROPHET

1. Mr Omilaju worked as a Housing Officer for the London Borough of Waltham Forest. Between February 1998 and August 2000, he lodged five sets of complaints to the Employment Tribunal against his employers, and these were consolidated and heard at Stratford Employment Tribunal in July and August 2001. All his complaints were dismissed on that occasion. However, he then lodged a further application in October 2001, following his resignation from his employment at the end of September 2001. There are a number of heads of complaint in that application, including unfair constructive dismissal.
2. An Employment Tribunal with Ms Gilbert as the Chairman and Mr Edwards and Mrs Cushing as the lay members, sat for eight days at the Stratford Employment Tribunal in March 2003, to consider those complaints. The outcome was that the majority of them, including unfair dismissal, were dismissed. Mr Olimaju was, however, successful in one complaint which related to victimisation in respect of a reference.
3. Mr Olimaju appealed the Employment Tribunal's Decision. Initially the Registrar of the Employment Appeal Tribunal considered that the appeal raised no point of law, and she directed that no further action be taken on it in accordance with Rule 3(7) of the Employment Appeal Tribunal Rules. That direction was appealed to His Honour Judge Clark, who directed that there should be a preliminary hearing at the Employment Appeal Tribunal before a judge and two lay members. That preliminary hearing took place before Rimer J and two lay members on 15 January 2004.
4. Of the nine grounds of appeal in the Notice of Appeal, the first seven were all dismissed at that preliminary hearing stage. Two grounds were allowed to proceed to a full hearing, these were ground (viii):

"Considering the ET own various findings at paragraph 90 (and also paragraphs 83 to 87, 36 to 39 and 40) whether the ET misapplied the law as well as applying the wrong test under the doctrine of "last straw" when they held that there were sufficient breaches of the implied term of trust and confidence in which the Appellant was entitled to resign but that his claim failed because "the last straw that broke this camel's back was perfectly reasonable and justifiable conduct of his employer acting fully in accordance with the terms of the Appellant's contract and the terms incorporated in it." "

And the ground (ix):

"Whether, on the ET own findings of fact, there were sufficient findings entitling the Appellant in law to resign apart from the last straw principle."

It follows that this appeal proceeds only those specific matters, and we are constituted today to deal with them. Mr Olimaju is represented by Mr Edward Jnr, and the employer by Mr Weiniger, of Counsel.

5. In order to understand the basis of the appeal today, it is necessary to explain that Mr Olimaju alleged that he resigned from his post as Housing Officer when he was advised of the employer's decision not to pay him for days spent at the Employment Tribunal. However he also referred to a series of matters preceding that, in respect which he was also complaining, and that included the matter of the reference. This is confirmed by a reading of his Originating Application, and the contents of his resignation letter dated 7 September 2001.
6. In respect of those earlier matters, Mr Edward, in his Skeleton Argument, and, indeed, in ground (viii) of his Notice of Appeal, says that the Employment Tribunal found that these would have justified Mr Olimaju's resignation, if he had chosen to resign in respect of them. That arises from what is contained in paragraph 90 of the Employment Tribunal's Extended Reasons, and it is appropriate for us to set out the contents of paragraph 90 in full.

"90 The Applicant has to show that he resigned in circumstances in which he was entitled to resign without notice by reason of his employers contract. The Applicant has to show that there was a serious breach of contract, or a breach which was the last in a series of breaches; that he resigned in response to the breach, and that he resigned within a reasonable time without affirming the contract. The Applicant in this case resigned because he was not paid wages for the days in July and August 2001 he was attending the Employment Tribunal. He was not paid because he was not available for work and his absence was not covered by the contract. There was no breach of contract at all never mind one which would entitle the Applicant to resign without notice. The Applicant did not resign because of the Kush Reference or because of Mrs Chown's conduct towards him both of which may have been breaches of the implied term of trust and confidence. He resigned because he was not paid. The Applicant also says it was the last in a series of actions such as to amount to a breach of trust and confidence. To this end the Applicant relies on the history including his treatment by Mrs Chown and the reference from Mr Driscoll. He may not have resigned in response to these but taken together with non payment of wages in the Employment Tribunal he was entitled to resign and claim he was dismissed. The difficulty for the Applicant is that looked at objectively the straw that broke this camel's back was perfectly reasonable and justifiable conduct of his employer acting fully in accordance with the terms of the Applicant's contract and the terms incorporated in it. The Applicant was not dismissed. There was no dismissal and his complaint of unfair dismissal fails and is dismissed."

7. The difficulty arises in respect of putting the following sentence in context.

" He may not have resigned in response to these but taken together with non payment of wages in the Employment Tribunal he was entitled to resign and claim he was dismissed"

Mr Edward understands that the Employment Tribunal was thereby making a finding of Mr Olimaju's entitlement to resign and claim a constructive dismissal by virtue of what had happened. Mr Weiniger, on the other hand, says that in the context of paragraph 90, the Employment Tribunal was thereby indicating what the Applicant's position was and the question which he wanted to have determined. It seems to us that there is some ambiguity there, but because of the action we have decided to take in this case, which we will come to in a moment, it will be helpful if the Employment Tribunal, in due course, can clarify the position on that matter.

8. Returning, therefore, to the issues which the Employment Tribunal had to decide in respect of unfair dismissal, we find in the Extended Reasons at paragraph 2, under the heading "Unfair Dismissal", the following words:

"(viii) Whether the breach of contract referred to in (vii) above "

[that, indeed, was the deduction of wages]

"was a fundamental breach of the Applicant's contract of employment and if not the last in a series of breaches by the Respondent such as to entitle the Applicant to resign without notice by reason of the Respondent's conduct and if it was,

(ix) Whether the dismissal was fair."

Returning then to paragraph 90, the second sentence there says this:

"The Applicant has to show that there was a serious breach of contract, or a breach which was the last in a series of breaches;"

9. Did the Employment Tribunal misdirect itself as to situations which involve a series of actions by the employer? In such situations, it is necessary for the Employment Tribunal to look at the earlier matters, plus the final act, in order to decide whether, cumulatively, they constituted a fundamental breach of contract, entitling the employee to resign and claim a constructive dismissal. That is made clear by the judgment in the case of Woods -v- W M Car Services (Peterborough) Ltd [1981] IRLR 347. In particular reference has been made, correctly as we feel, to paragraph 17 in that judgment, that judgment being by Browne Wilkinson P, as he then was. At the end of paragraph 17, the following words appear:

"The conduct of the parties has to be looked at as a whole and its cumulative impact assessed: Post Office v Roberts [1980] IRLR 347 paragraph 50"

10. In a situation where the employee is claiming a series of acts culminating in an act alleged to be a final straw, the important case is that of Lewis -v- Motorworld [1986] ICR 157. As we understand it, the Employment Tribunal in this case may not have been directed specifically to that case. If they had been, it would have been difficult for them to have said what they did at the beginning of paragraph 90. In Lewis it was emphasised by the Court of Appeal that if there was a final act by the employer which causes the employee to resign, it is not essential for that final act itself to constitute a breach of contract. As was indicated in the Woods case, the Employment Tribunal had to look at matters cumulatively.
11. In its comprehensive judgment in the instant case, the Employment Tribunal, at paragraph 90, indicate that because the final act, which caused Mr Omilaju to resign, was not a breach of contract, but, indeed, fully in accordance with the terms of his contract there could be no constructive dismissal. They also added that the action of the employers was a reasonable one. In general terms, Mr Weiniger submits that the Tribunal approached the matters correctly, and reached conclusions which it was entitled to reach on the evidence it received. That, in general terms, is a powerful argument and this Tribunal does not seek normally to disturb an Employment Tribunal decision approached in that way. The difficulty arises, however, in the terms of paragraph 90, which we have set out above, and which does indicate some degree of ambiguity and possible confusion on the part of the Employment Tribunal.
12. However we have also had an interesting argument from Mr Weiniger, in respect of what can or cannot constitute a "last straw" situation. Mr Weiniger says that in order to constitute a "last straw" the conduct of the employer has to be unreasonable in some way, and, indeed, this Tribunal expressly found that the employer's actions in respect of the non payment of wages was reasonable.
13. The difficulty about that argument, it seems to us, is that in all "last straw" situations, matters turn to some extent on the perception of the employee at the time when he feels that he has been treated unreasonably or unfairly by his employer. It is that which causes him to decide to resign, bringing into the picture, as is usually the case and, indeed, is the case here, previous actions by the employer about which he had complained. It seems to us that it would be wrong to say that any possibility of a finding of constructive dismissal in such a situation is negatived if the final action of the employer is subsequently found by the Employment Tribunal to have been reasonable.
14. The case law indicates that the function of the Employment Tribunal when faced with a series of actions by the employer is to look at all the matters and assess whether cumulatively there has been a fundamental breach of contract by the employer. We are unable to find in the judgment of this Employment Tribunal the answer to that question.
15. This was a case where, overall, the Employment Tribunal tackled its duties commendably, and there were very many matters which had to be resolved. This particular matter, arising as it does having passed through a number of judicial considerations, is one that we feel can be put right in a fairly straightforward way.
16. The appeal on the Tribunal's decision that Mr Omilaju was not constructively dismissed, is allowed. It would not be appropriate for us to substitute a decision on the matter of whether he was or was not constructively dismissed, as Mr Edward suggests, nor, indeed, do we think it would be proportionate for this matter to have to be remitted to a different Employment Tribunal.
17. We will therefore direct, and we are very grateful to Mr Weiniger for being so helpful to us in this situation, that the case should be remitted to the same Employment Tribunal in order for that Tribunal to answer the question whether the previous acts of the employer, including the matter of the reference, together with the final act in refusing to pay his salary for days spent at the Employment Tribunal, cumulatively constituted a fundamental breach of Mr Olimaju's contract of employment.
18. If the Employment Tribunal answers that question in the affirmative, it will follow that they will be likely to find that Mr Olimaju was constructively dismissed, in which case they will then have to deal with an unfair dismissal complaint in the usual way, i.e. in respect of both liability and, if appropriate, remedy. If, on the other hand, they answer it in the negative, they will in effect be confirming their earlier conclusion that he was not constructively dismissed from his employment, and, consequently, could not have been unfairly dismissed.
19. This appeal has caused us to consider the following question - "Whether there can be a constructive dismissal in a situation where, whatever may have previously occurred, the final act which precipitated resignation is found by the Employment Tribunal to be reasonable conduct by the employer". We therefore grant Mr Weiniger's request for leave to appeal to the Court of Appeal.