United Kingdom Employment Appeal Tribunal

APPEARANCES

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For the Appellant	MISS ADRIENNE MORGAN (of Counsel) Instructed by: Gambrills Solicitors Europa House Sandgate Road Folkestone Kent CT20 1TD
For the Respondent	MR PAUL EPSTEIN (of Counsel) Messrs. Farrer & Co. Solicitors 66 Lincoln's Inn Fields London WC2A 3LH

SUMMARY

Contract of Employment

The Employment Tribunal found that the Respondent had breached implied term of trust and confidence - but breach not repudiatory. Authorities show that if breach was established, it was necessarily repudiatory. Remit for further findings.


 


HIS HONOUR JUDGE D SEROTA QC

1. This is an appeal from a decision of the Employment Tribunal at Ashford that was sent to the parties on 27 September 2004 chaired by Miss E G Wallis. The Employment Tribunal dismissed the Claimant's complaint that she had been unfairly dismissed. She had alleged that there had been a constructive dismissal. The Respondent maintained that she had resigned. The Respondent accepts that in one fundamental respect the judgment in this case cannot stand, and the parties agree that the matter must be remitted to the Employment Tribunal; but there remain issues as to whether there should be a rehearing or a remittal for consideration by the same employment tribunal and there remain issues about other grounds of appeal.
2. We start by setting out the background as found by the Employment Tribunal. The Claimant worked as an Executive Assistant at Wye College in Ashford. Wye College became part of the Respondent, Imperial College, some time in July 2000. At the relevant time in 2002 and 2003, she was working for Professor Waage, who was the head of the Department of Agricultural Sciences. It needs to be said that relations between Professor Waage and the Claimant were not good. The Employment Tribunal found that this was partly because of Professor Waage's exacting methods of work and difficulties in his communications skills: but there were also problems that had been caused by the Claimant and these should not be minimised. The Employment Tribunal found that in the autumn of 2002 the Claimant's colleagues, a Mrs Jovanovich, the Departmental Administrator, expressed concerns as to whether the Management Team should be minuted and serviced by the Claimant. Mrs Jovanovich voted against the proposal, and explained privately to Professor Waage, together with Mrs King, a student counsellor, another colleague of the Claimant, why she was concerned. Both Mrs Jovanovich and Mrs King were concerned at the Claimant's lack of discretion; and told Professor Waage the Claimant was sitting at lunch with colleagues and asking them what a particular drug was, reading from a note. She told the persons with whom she was having lunch she was interested in this because she had found the prescription in Professor Waage's room. Mrs King also told Professor Waage that the Claimant had forwarded to Mrs King a number of Professor Waage's e-mails, and that Mrs King had asked her to stop doing so. Mrs Jovanovich reported that she had received a report from a Senior Security Officer that when she was introduced to the Claimant, when she joined the Department around 2002 in February, the Claimant had described Professor Waage in uncomplimentary and earthy terms, which we need not repeat. Further, Professor Waage had been approached by an independent consultant who had been working with him on the restructuring of the department. He told Professor Waage that he considered that his position was being undermined by the way the Claimant represented him and his views to other staff. The same consultant told Professor Waage that the Claimant had shared confidential information with other staff. The Claimant at the hearing accepted she had allowed Mrs King to see a list of names on her desk in respect of a proposed redundancy exercise, and also accepted at the hearing that she had mentioned Professor Waage's medication to a colleague at lunchtime. She also accepted that she had referred to Professor Waage in uncomplimentary and robust terms, which again it is unnecessary to mention in this judgment.
3. Professor Waage's relations with the Claimant were obviously undermined by this conduct on behalf of the Claimant, the gravity of which should not be understated. Professor Waage no longer wished to have the Claimant serve the Management Team Committee. He was considering how the team could be serviced, and how the Claimant's role could be adapted so that another post could service the team while she carried on with other types of work. This is how a note, which we shall come to now, came to be written. Professor Waage prepared this note some time shortly before 27 January. The note, which was before the Employment Tribunal, was a personal note and an aide memoire prepared by Professor Waage in which he set out his view of his working relationship with the Claimant. The Employment Tribunal has quoted:

"Difficult relationship, indiscrete (sic) on confidential issues, does not present me well to others, some breaches of my personal affairs."

The Employment Tribunal also quoted other concerns:

"Would like her to leave for reasons of compatibility with me and new office;

Skills – modern skills, willingness to do more and new things, friendliness;

Change of job – someone who can work with and support Management team;

Costs – too highly paid for what she does."

4. The Claimant was preparing a document for Professor Waage and needed to check some information: he was not in the office. She looked through the papers on his desk to find the information, and found the note which she then proceeded to read. Whether she should have read a private note on Professor Waage's desk is a matter for the consideration of the Employment Tribunal. She left work in distress and it is right to say that she, in fact, never returned to work. She remained off sick suffering with stress for a substantial period of time.
5. Professor Waage was informed by Mrs Brown (the HR Manager - Life Sciences), who had learned from Mrs Jovanovich how distressed the Claimant was. Professor Waage immediately drafted a note of apology, assisted by Mrs Jovanovich and Mrs Brown. The note was e-mailed to the Claimant shortly after 5.30 pm on 27 January; that was the day that the Claimant had discovered his aide memoire. Professor Waage said he was sorry that the Claimant had seen his note, that it was a private note to himself to clarify his thoughts and not intended for anyone else, and he regretted causing her so much upset. He went on to say that having thought of reasons not to continue together, he had then gone on to think about the positive side of their working relationship and ways in which to address his concerns. He reiterated his appreciation of her dedication to the job and her efforts and hoped that he would be able to talk to her soon and that they would be able to continue work together. The Employment Tribunal was satisfied that Professor Waage had taken prompt steps to try to remedy the situation.
6. It would be right, I think, to say that from 27 January until 11 November when the Claimant resigned and maintained she was constructively dismissed, there were various discussions, which came to nothing, as to her switching jobs. There was an unsuccessful attempt to mediate. There were references to the Occupational Health Medical Service, and there is no doubt that the Respondent was considering the possibility of a dismissal on the grounds of ill health. Be that as it may, on 11 January the Claimant wrote and said she was left to conclude the College did not intend to remedy the fundamental breach of her contract of employment which arose from the actions of Professor Waage:

"Over the months since this happened I have been led to believe the College would remedy that breach of contract. I have attended many consultation meetings and as recently as 21 October 2003 I was asked whether I would consider a swap and go back to work at Wye. I have always made it quite clear that I am not prepared to accept the breach of contract but I have been prepared throughout to consider anything the College might propose to remedy that breach. It was to discuss such possibilities that I came to the meeting with you on 31 October 2003. "

I must now conclude that the College is not prepared to remedy that original breach of contract. In the circumstances you leave me no alternative but to resign immediately. The College's actions leave me with no choice. I intend to issue proceedings to the Employment Tribunal for constructive unfair dismissal. "

I need not read the rest of the letter.

7. The matter came before the Employment Tribunal. At the Employment Tribunal the parties were both legally represented. The Claimant was represented by Miss Morgan, whom we have had the pleasure of hearing today; the Respondent was represented by Mr Epstein, and again we have had the pleasure of hearing Mr Epstein today.
8. At the outset of its Decision in paragraph 4, the Employment Tribunal set out the issues which it considered had been agreed at the start of the hearing as follows:

"The issues agreed at the start of the hearing were as follows:-

Was the conduct of Professor Waage in writing a note about the Applicant's employment a fundamental breach of contract?

Was the conduct of the Respondent in investigating the Applicant's complaint about that note a fundamental breach of the contract?

Was the note made by Professor Waage within a sheaf of papers and not left for the Appellant to read?

Did the Respondent make reasonable efforts to address to the Applicant's concerns?

Did the Applicant decline to meet Professor Waage in mediation sessions?

Was this the reason for mediation being discontinued?

What was the position with regard to redeployment and protected pay?

If the actions of Professor Waage and/or the Respondent amounted to a fundamental breach of the Applicant's contract of employment, was that breach the effective cause of the resignation?

(ix) Was there any delay between the effective cause of resignation and the resignation itself; had the Applicant affirmed the contract?"

9. One issue that has been raised before us was an issue as to whether the Claimant had been treated unfairly in that the Respondent applied the sickness policy to the Claimant without disclosing the fact that she was in fact being subjected to that policy. It is not referred to in paragraph 4 of the Employment Tribunal's Reasons. The Employment Tribunal in paragraph 4 (ii) had this to say:

"Was the conduct of the Respondent in investigating the Applicant's complaint about that note, [that is Professor Waage's note] a fundamental breach of the contract?

It is suggested, and we think probable, that the Tribunal there took in all allegations of repudiatory breach. Be that as it may, it is not altogether satisfactory, but we will return to see how the Employment Tribunal dealt with this issue later in our Judgment.

10. It is also important to note that the Employment Tribunal recorded that the parties had agreed there was no real dispute about the facts of the case: it was a matter of interpretation. The Applicant suggested the Respondent had not been trying to remedy the situation but was shepherding her towards dismissal. The Applicant suggested the process followed by the Respondent had not been carried out in good faith and was a sham. The Respondent suggested that it had taken all good reasonable steps to deal with the matter following the Applicant's complaint about the note she had found in Professor Waage's private papers.
11. The Employment Tribunal went on to consider the facts. We do not think it necessary to refer to them in any more detail but we shall refer to certain of them later when we consider other grounds of appeal. The Employment Tribunal in paragraph 43 directed itself by reference to the well-known decision in Western Excavating (ECC) Ltd v Sharp [1978] ICR 221, in which the Court of Appeal had set out the requirements for establishing constructive dismissal. It also correctly pointed out that the burden was on the Claimant to show the breach was the effective cause of the resignation and that she had not affirmed the contract. The Employment Tribunal correctly directed itself that once a Claimant had established a constructive dismissal had taken place the Tribunal had to decide whether the dismissal was fair or unfair. The Employment Tribunal then later in paragraph 46 notes that it is not necessary for an employer to intend to terminate the contract of employment. That is clearly correct. "Constructive dismissal", the Tribunal say: "is a statutory matter which has been devised to give employees a remedy for an unfair fundamental breach of the contract of employment". We are not certain that it is correct to regard the concept of constructive dismissal as a statutory matter; nonetheless, that does not seem to us to be relevant to any issue we have to decide. The Employment Tribunal then goes on to say:

"47. There was no dispute in this case that the claim related to an alleged fundamental breach of the implied term of mutual trust and confidence. In the case of Courtaulds Northern Textiles Ltd v Andrew [1979] IRLR 84 the Employment Appeal Tribunal held that a term is to be implied into all contracts of employment stating that employers will not, without reasonable or proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence between the employer and employee. In the case of Woods v W M Car Services (Peterborough) Ltd [1981] ICR 666 the Employment Appeal Tribunal confirmed that it was not necessary for the employee to show that the employer intended any repudiation of the contract. It is the Tribunal's function to look at the employer's conduct as a whole and determine whether it is such that its effect, judged reasonably and sensibly, is such that the employee cannot be expected to put up with it.

48. In the recent case of Logan v Commissioners of Customs and Excise [2004] IRLR 63 the Court of Appeal confirmed that, commenting on the case of Lewis v Motorworld Garages Ltd [1985] IRLR 465 (a last straw case), "what Lewis requires is a view in its totality of the whole course of conduct in order to see whether the actions of the employer constitute together a breach of the implied obligation of trust and confidence. The employer's actions must be judged cumulatively."

49. We have therefore looked at the whole course of conduct in this case, from the date that the Applicant discovered the note written by Professor Waage until the date of her resignation."

12. The Employment Tribunal then went on at paragraph 50 to consider the submission by the Claimant that there were two fundamental breaches of contract: the preparation of the note by Professor Waage, and the way in which the Respondent dealt with her complaints. The Employment Tribunal then said this:

"50. …Dealing first with the note itself, the Tribunal concluded that Professor Waage had not deliberately left the note in papers that were referred to by the Applicant. Although those papers were on his desk and therefore some forethought by Professor Waage might have indicated that the Applicant would have looked through them had she needed some information with regard to addresses, we concluded that the note was not placed deliberately for the Applicant to find it. We therefore considered whether or not it could be said that the actual preparation of the note and placing it within paperwork on the desk could constitute a breach of the implied term of mutual trust and confidence. We had noted that some of the matters raised in that note had already been discussed with the Applicant in August 2002. Some other matters in that note had been accepted by the Applicant at the Tribunal hearing. We concluded that the key point in that note were the words "would like her to leave". We also concluded that we had to consider how Professor Waage had responded once he was aware that the Applicant had found the note. We concluded that the writing of the note and leaving it within papers on his desk was a breach of the implied term of mutual trust and confidence. We could not say however that it was a fundamental breach in all the circumstances. The Tribunal accepts that the content of the note was greatly upsetting for the Applicant, but given the way in which she had described the working relationship with Professor Waage, given that they had discussed some concerns that he raised in August 2002, and given that she accepted at the hearing that she had behaved in ways that might be considered "indiscreet", and given that the note was not passed to her and that Professor Waage had not said these words to her, in contrast with the circumstances in the case of Morrow v Safeway Stores plc [2002] IRLR 9, the Tribunal concludes that the preparation of the note itself and the discovery of it by the Applicant did not constitute a fundamental breach of the implied term of trust and confidence in her contract of employment.

51. We therefore consider that it is not necessary for us to consider the other two limbs to be made out in claims of unfair constructive dismissal, namely effective cause of resignation and affirmation.

52. Turning to the other fundamental breach claimed by the Applicant, the conduct of the Respondent in investigating her complaint about Professor Waage, we have concluded on the findings of fact set out above that the Respondent's conduct did not constitute a breach of the Applicant's contract of employment and therefore there was no question of a fundamental breach of the contract."

13. The first three grounds of appeal and, indeed, the principal matter with which we have been concerned, are that whereas on the one hand the Employment Tribunal found that the writing and leaving of the note by Professor Waage was in breach of the duty of implied trust and confidence, it went on to find that that breach was not fundamental. It is accepted by both Miss Morgan and Mr Epstein that the Employment Tribunal fell into error and failed to follow the decision in Morrow v Safeway Stores plc to which it had been expressly referred. A breach of the implied term of trust and confidence, as we shall refer to it as convenient shorthand, is of necessity repudiatory. If it is not repudiatory, then there is no breach. On the other hand if there is a breach it is of necessity repudiatory. Not every action of an employer that causes an employee to feel that trust and confidence has been undermined, will amount to a breach of the implied term. It is perhaps helpful to remind ourselves how the term was formulated by the House of Lords in the decision of Malik v Bank of Credit & Commerce International SA [1997] IRLR / [1997] ICR 606. Lord Nicholls had this to say at page 610:

"An implied obligation

Two points can be noted here. First, as a matter of legal analysis, the innocent employee's entitlement to leave at once must derive from the bank being breach of a term of the contract of employment which the employee is entitled to treat as a repudiation by the bank of its contractual obligations. That is the source of his right to step away from the contract forthwith.

In other words, and this is the necessary corollary of the employee's right to leave at once, the bank was under an implied obligation to its employees not to conduct a dishonest or corrupt business. This implied obligation is no more than one particular aspect of the portmanteau, general obligation not to engage in conduct likely to undermine the trust and confidence require if the employment relationship is to continue in the manner the employment contract implicitly envisages. Second, I do not accept the liquidators' submission that the conduct of which complaint is made must be targeted in some way at the employee or a group of employees. No doubt that will often be the position, perhaps usually so. But there is no reason in principle why this must always be so. The trust and confidence required in the employment relationship can be undermined by an employer, or indeed an employee, in many different ways. I can see no justification for the law giving the employee a remedy if the unjustified trust-destroying conduct occurs in some ways but refusing a remedy if it occurs in others. The conduct must, of course, impinge on the relationship in the sense that, looked at objectively, it is likely to destroy or seriously damage the degree of trust and confidence the employee is reasonably entitled to have in his employer. That requires one to look at all the circumstances.

Breach

The objective standard just mentioned provides the answer to the liquidators' submission that unless the employee's confidence is actually underlined there is no breach. A breach occurs when the proscribed conduct takes place: here, operating a dishonest and corrupt business. Proof of a subjective loss of confidence in the employer is not an essential element of the breach, although the time when the employee learns of the misconduct and his response to it may affect his remedy."

14. All the relevant authorities were considered by Mrs Recorder Cox, as she then was, in the case of Morrow v Safeway Stores plc. Having gone through a number of authorities, to which we shall refer shortly, she said at paragraph 23 of the report at [2002] IRLR 9:

"if the employer is found to have been guilty of such conduct [that is conducting itself in a manner likely to destroy or seriously damage the relationship of confidence and trust between the employer and employee] that is something which goes to the root of the contract and amounts to a repudiatory breach, entitling the employee to resign and claim constructive dismissal. Whether there is such conduct in any case will always be a matter for the employment tribunal to determine, having heard the evidence and considered all the circumstances."

15. It is clear, therefore, that the Employment Tribunal fell into error, and it is necessary for the appeal to be allowed at least in this regard, as Mr Epstein has very properly, and helpfully, conceded; and the matter needs to be remitted to the Employment Tribunal. We shall consider later in this judgment whether it should be remitted to the same tribunal or remitted for a new hearing.
16. In passing, we should say this, the Employment Tribunal must have regard to the fact that for an act of the employer to amount to a breach of the implied term of trust and confidence, the conduct must be of some gravity because it is something which goes to the root of the contract and amounts to a repudiatory breach which is capable of being accepted by the Respondent. It must be something which can be seen objectively to be likely to destroy or seriously damage the degree of trust and confidence the employee is reasonably entitled to have in his employer. Looking at the facts as found by the Employment Tribunal, we have some difficulty in seeing, in any event, how someone in Professor Waage's position could be in breach of that duty by holding uncommunicated views about the Claimant. We are equally in some doubt as to how the simple preparation of an aide memoire recording those views could, in itself, amount to a breach of the implied term. In any well run organisation it is bound on occasions for it to be necessary for the employer to record confidential and unfavourable views about employees without it being suggested that the mere recording of those views is in itself a breach of the implied duty of trust and confidence. Obviously those considerations change if the report is circulated or left to be seen. It follows, therefore, that Professor Waage's carelessness, if it be that, in leaving the report on his desk where it might be seen by the Claimant, might be capable of amounting to a breach of the implied term. That, of course, is something for the Employment Tribunal to consider in the light of this judgment.
17. We now turn to matters which are more controversial. In paragraph 6.4 of the Claimant's Notice of Appeal, it is submitted that the Employment Tribunal was wrong to take account in deciding whether there had been a repudiatory breach of contract, of the actions of Professor Waage, which we have referred to, when he sent an apology to the Claimant. Miss Morgan has pressed upon us that the breach crystallised when the Claimant found the note. We invited her to show us authority for that proposition, and she drew our attention to the passage in Malik which we have already referred to, in which Lord Nichols said that the breach occurred when the proscribed conduct took place. We asked Miss Morgan what, for example, the position might be if an employee was told by her manager that her salary was going to be stopped, and it was. But before the employee treated this conduct as a repudiatory breach of her contract of employment, the director apologised, and offered recompense. We asked her whether in those circumstances the employee could nevertheless say 'I have been constructively dismissed'. Miss Morgan said that was in fact the case, the employer could not alter the nature of the breach by his subsequent conduct.
18. We have been referred to a number of authorities; we start with the decision in Woods v W.M. Car Services (Peterborough) Ltd [1981] ICR 666. That is a decision of the Employment Appeal Tribunal presided over by Browne-Wilkinson J, as he then was. Browne-Wilkinson J had this to say at page 670 G:

"In our view it is clearly established that there is implied in a contract of employment a term that the employers will not, without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee: Courtaulds Northern Textiles Ltd. v Andrew [1979] IRLR 84. To constitute a breach of this implied term it is not necessary to show that the employer intended any repudiation of the contract: the tribunal's function is to look at the employer's conduct as a whole and determine whether it is such that its effect, judged reasonably and sensibly, is such that the employee cannot be expected to put up with it: see British Aircraft Corporation Ltd. V Austin [1978] IRLR 332 and Post Office v Roberts [1980] IRLR 347. The conduct of the parties has to be looked at as a whole and its cumulative impact assessed: Post Office v Roberts."

19. The Claimant has sought to distinguish Woods and the reference to the need to consider all the circumstances and all the conduct of the parties as a whole, by saying that the principle applies to issues of cumulative conduct rather than the kind of "one-off" act relied upon in the present case. We are not able to accept that submission.
20. We now turn to the decision of the Employment Appeal Tribunal in Moores v Bude-Stratton Town Council [2000] IRLR 676. In that case, the President of the Employment Appeal Tribunal, Lindsay J, had the misfortune to differ from the two lay members with whom he sat. However, the disagreement related to an issue as to whether the employer was vicariously liable for certain conduct, and does not, in fact, as we understand the matter, affect what the President had to say at paragraphs 18 and 19 as follows:

" (3) Verbal abuse

It cannot be doubted but that even a single incident of verbal abuse may found a claim for constructive and unfair dismissal. Thus in Isle of Wight Tourist Board v Coombes [1976] IRLR 413 EAT the director of the Tourist Board, the most senior officer or agent of the Board so far as one can tell from the report of the case, said of and in the presence of his personal secretary, a woman of 58 years of age who had serve the Board for some 15 years, 'She is an intolerable bitch on a Monday morning.' Mrs Coombes indicated there and then that she had 'taken enough', gave oral notice to leave, immediately left and drafted a letter of resignation. She was held to have been constructively dismissed, although Bristow J. giving the judgment of the EAT, mentions the possibility that a timely apology might have ended matters. There had, though, been no apology. In Courtaulds Northern Textiles Ltd v Anderson [1979] IRLR 84 EAT an assistant manager had said to an employee 'You can't do the bloody job anyway,' although not believing that to be the case. Again, constructive dismissal was established although, again, it was notable that the management had not sought to 'jolly' the employee (as it was put) out of his intended reaction of giving notice – see paragraph 8 on p.85. In Robinson v Crompton Parkinson [1978] IRLR 61 the employee, Mr Robinson, having been falsely and unfairly accused of theft, first gave his employers an opportunity to apologise for their actions. Only after he had failed to receive an apology over the next week (having been, he said, promised it) did he say 'I'm off. The industrial tribunal had dismissed his claim for unfair dismissal; the EAT allowed the appeal and remitted the matter to a fresh tribunal.

These cases suggest that whilst, as one would expect, even a single incident of verbal abuse, though not coming from the employer himself or itself, can ground a successful claim for constructive dismissal on the basis of its having been destructive of the mutual obligations of trust and confidence between employer and employee, each incident needs to be examined in the light of its surrounding circumstances. They will include whether the verbal abuse was, so to speak, 'authorised' in the sense of coming from some senior person in the employer's organisation and thus seeming to have the authority of the employer behind it and whether a timely retraction or apology was offered by the employer. It will be for the employment tribunal, using its good sense and practical experience of the working environment, to adjudge, on the facts of each particular case, whether the verbal abuse in question could fairly be regarded as coming from (or as if from) the employer and whether, if an apology or retraction was promptly offered, the employee was being hypersensitive, too thin-skinned or inflexible, in persisting in a view that trust and confidence had been seriously or irremediably wounded. Where verbal abuse has been persisted in and where the employer, knowing of it or having good reason to suspect it, has taken no steps to curb it, a tribunal is, of course, more likely (and, in the minority view, properly more likely) to treat the verbal abuse as 'authorised' in the sense explained above, more likely to treat any apology as necessary and more likely to treat the harm done as irremediable than would otherwise be the case. How far a given incident could have been reasonably foreseen and, if so foreseen, avoided, will also properly be a factor likely to weigh with a tribunal."

21. Miss Morgan has sought to distinguish what Lindsay J had to say because the principle of which he spoke was confined to such matters as there being verbal abuse: a quick flare up on the shop floor where an apology might be seen as part of the same incident. Also the fact that in that particular case Lindsay J was dissenting. She also drew attention to the fact that the apology in the present case went through the Human Relations Department before being sent to the Claimant. We are not able to accept that what Lindsay J said is confined to cases of verbal abuse and a quick flare-up. It seems to us and, indeed, it is consonant with commonsense and with the principle that in determining if there has been a breach of the implied term all relevant facts and circumstances should be looked at, that an apology may, and we stress may, have the effect of making it unreasonable for a Claimant to treat the event giving rise to the complaint as being in breach of the implied duty of trust and confidence; certainly, if what might otherwise have been a repudiatory breach of contract has not already been accepted.
22. We have already referred to the decision in Malik, in which Lord Nicholls specifically had said that in determining if there had been a breach of the duty of trust and confidence one had to look at all the circumstances. There are similar passages in the decision in Morrow v Safeway Stores and the passage from the judgment of Cox J we have referred to. It is important to remember that a repudiatory breach of a contract does not automatically bring the contract to an end. It enables the innocent party, if he or she so elects, to treat the contract as having been discharged by breach, but until there has been an acceptance the contract remains in being.
23. We drew to the attention of the parties the decision in the case of Norwest Holst Group Administration v Harrison [1984] ICR 668, a decision of the Court of Appeal. In that case the employee had entered into a contract with the company whereby the company had agreed to employ him as a director for a period of a year and thereafter from year to year subject to twelve months' notice. The company during the pendency of the agreement informed him that he would no longer be employed as a director as from a date some week or so in advance. However, before the employee treated that as amounting to a constructive dismissal the employer informed him that it was no longer intending to remove his directorship from him. It was only after receipt of that information that the employee chose to treat the contract as having been repudiated. It is right to say that this was a case of anticipatory breach Cumming-Bruce LJ said at page 680:

"There was no unequivocal acceptance of the repudiation and on 24 June the company were entitled to withdraw their threat because there was sufficient anticipatory element in their breach to confer on them a locus poenitentiae at any time before acceptance was communicated.

24. Neill LJ set out on page 680-681 a submission made on behalf of the employee. The first submissions was that :

(a) the letter of 14 June was a repudiation of the contract of service; (b) the repudiation was an actual repudiation of the existing agreement and it provided the employee with an option whether or not to accept a repudiation; (c) if he elected to accept the repudiation, he could either leave at once or on 30 June, that is at the end of the period during which he could continue in his employment on the old terms and as a director; (d) provided that he did nothing to affirm the contract, he had a reasonable period within which to make up his mind whether or not to accept the repudiation and during this reasonable period the company could not cure the position or take any effective steps to remove the threat posed by their repudiation; (e) that a distinction could be drawn between cases of anticipatory breach, where the relevant obligation of the wrongdoer remained wholly executory, and cases of actual repudiation of an existing contract. It was only in the former type of case that the party in repudiatory breach had the chance, as long as the repudiation remained unaccepted, to withdraw the threat not to perform the contract in the future."

25. Neill LJ said in terms he was unable to accept that argument. He went on to say at page 681:

"I am unable to see why the same rule should not apply in cases where there is a contract already being performed between the parties but the relevant obligation remains either wholly or in part executory. For my part, I have been assisted on this matter by the passage in the judgment of Buckley LJ in Gunton v Richmond-upon-Thames London Borough Council [1980] ICR 755, 771."

In my judgment, subject to any question of estoppel, which has not been raised in this case, the repudiatory act was capable of being cured at any time before the employee accepted the repudiation as a termination of the contract. This is not a case where the letter was offensive or couched in such terms as to be by itself wholly destructive of the mutual trust between the employer and the employee. In such a case, different considerations might well arise. The repudiatory aspect of the letter of 14 June was that it conveyed to the employee a significant change in his terms of employment as from 1 July. It is common ground that on 24 June the company withdrew the threat of the loss of the directorship. In my view they were entitled to do so, unless by that time the employee had communicated to them his acceptance of the repudiation."

26. Sir Denys Buckley at page 683 agreed with the judgments that had been given by Cumming-Bruce LJ and Neill LJ and said:

"It is common ground that the company's letter of 14 June, containing as it did the statement "the post will not now carry a directorship," amounted to a repudiation of the contract by the company. That repudiation was, in my view, an anticipatory repudiation, it was not a statement to the effect that they would not employ the employee at any time in the future; it was a threat to cease to employ him as a director from 1 July, approximately a fortnight later than the date of the letter. If the employee had unequivocally accepted that act of the company as a repudiation of the contract, he would have been entitled, upon the principles which I have attempted to indicate in my judgment in Gunton v. Richmond-upon-Thames London Borough Council [1980] ICR 755, 771, to treat the contract as there and then determined, and to have sought remedies upon that basis."

However, he concluded that this was not what had happened in the present case, and the employers had, in effect, been able to withdraw the repudiatory conduct.

27. Our attention has been drawn to Chitty on Contract, the decision in Norwest Holst is referred to in paragraph 39 - 186, and Miss Morgan drew our attention to what is there said by the learned authors:

"It has been held that a threatened breach by an employing company of its continuing obligation to employ the employee as a director was comparable to an anticipatory repudiation breach of an executory contract rather than an actual repudiatory breach which could therefore be withdrawn any time before its unequivocal acceptance by the employee."

She, therefore, submits that the principle in that case is that it is only possible to alter the nature of what would otherwise be a repudiatory breach if it remains anticipatory.

28. On the other hand, Mr Epstein drew our attention to paragraph 25-025:

Anticipatory breach and actual breach. When establishing whether or not there has been a renunciation of the contract, there is no distinction between the tests for what is an anticipatory breach and what is a breach after the time for performance has arrived. It follows, therefore, where the conduct of the promisor is such as to lead a reasonable person to the conclusion he does not intend to fulfil his obligations under the contract, when the time for the performance arrives the promisee may treat this as a renunciation of the contract and sue for damages forthwith. The innocent party is not obliged to wait for the time for the performance because the renunciation coupled with the acceptance of that renunciation renders the breach legally inevitable and the effect of the doctrine of anticipatory breach is precisely to enable the innocent party to anticipate an inevitable breach and to commence proceedings immediately."

29. In our opinion, the authorities that we have cited show that even if there has been conduct capable of amounting to a renunciation of a contract, a change in circumstances is relevant to the question of whether there has been a repudiatory breach, certainly of the implied duty of trust and confidence, as at the date of purported acceptance. The authorities, in our opinion, show that one should never look at an act said to be a repudiatory breach of contract in a vacuum or in isolation. It is necessary to look at all the relevant circumstances and assess whether there has, in fact, been a breach as at the date of the purported acceptance of the breach. The breach does not end the contract until the repudiatory breach has been accepted by the innocent party. The landscape may have changed. It is always a question for the employment tribunal in employment cases to determine whether in fact what might be described as 'post-event facts' lend a different colour to the event that was said to be repudiatory. There is no reason in principle why matters such as a prompt apology are not capable of being taken into account in determining whether at a later date when there is said to be an acceptance of the breach, there has in fact been a breach of the implied term. In appropriate circumstances, it may no longer be reasonable to treat conduct as a breach of the implied term than at an earlier point in time, it may have been reasonable to treat it as such. This is always a matter that will be fact sensitive. There may be circumstances when nothing save waiver or affirmation on the part of the innocent party can render the conduct otherwise than repudiatory. There may be, on the other hand, cases going the other way. This will always be a matter that is fact sensitive for consideration by the employment tribunal.
30. We now turn to consider ground 6.5. The Claimant maintains the Employment Tribunal was wrong to take account of evidence by the Claimant at the Tribunal in relation to matters which we have set out to her detriment because these had never been discussed with Professor Waage. She said it was wrong to take these matters into account because they were never discussed with the Claimant before Professor Waage put them in his private note. There is no authority for this proposition which seems to us to offend commonsense. The Employment Tribunal is bound in considering, as we have already said, whether there has been a breach of the implied term, to have regard to all of the relevant circumstances. Those circumstances must of course include the prior conduct of the Claimant, which in this case gives cause for considerable concern.
31. Ground 6.6 in the notice of appeal, that is the Employment Tribunal failed to address the evidence in relation to an issue as to whether the Respondent wanted to downgrade the Claimant, has not been argued before us. We consequently say nothing further about it.
32. Ground 6.7 relates to the submission that the Employment Tribunal failed to deal with the case put by the Claimant that there had been a fundamental breach or a breach of the implied duty of trust and confidence when she was subjected to the Sickness Absence procedure without being told by the Respondent that it had applied that procedure to her. She was in a process, it was submitted, she knew nothing about and that amounted to a breach of the implied term of trust and confidence. This is a matter that we are told, and accept, was the subject of submissions before the Employment Tribunal. It is also referred to in the letter of resignation and Mr Epstein has very fairly conceded that the matter was raised and perhaps should have been separately set-out in paragraph 4 (ii) of the Employment Tribunal's Decision, but he does make the point it was not in the forefront of Miss Morgan's submissions. On the other hand, however, it is apparent to us that these matters were considered by the Employment Tribunal which made detailed findings about them and show that this particular ground could not succeed on the facts. Thus, the Employment Tribunal found that the written policy was only introduced, I believe, in August at a time when the Claimant was, of course, absent from work. She was sent a copy of that policy at the beginning of September. The Claimant maintains that she did not appreciate what was happening when she was referred to the Occupational Health Service. This matter is referred to in paragraph 20 of the Employment Tribunal's Decision, and it is quite clear that the findings of facts that are made there are adverse to this part of the Claimant's case. She also maintains she did not know the purpose of the employment review meeting. Again, this is an issue which one finds dealt with in paragraph 25 of the Employment Tribunal Decision and was referred to in June 2003 some four months before the actual meeting took place. We should also refer to paragraph 35 of the Employment Tribunal's Decision and paragraphs 48 and 49.
33. We were also referred by Mr Epstein to the decision of the Court of Appeal in the case of High Table Limited v Horst [1997] IRLR 513, in which Mr Epstein submits the Court of Appeal made it clear that a tribunal was under no obligation to mention each and every disputed piece of evidence. It had to consider all that was relevant, but it need only with the points that would have seen to be in controversy relating to those issues. It only need deal with the principal important controversial points. While perhaps it would have been helpful if the Employment Tribunal had drawn specific attention to the way in which it dealt with this issue in paragraph 4, it is unfortunate that no one at the end of the hearing drew its attention to this omission. See Bansi v Alpha flight Services [EAT] 3 February 2004. We are satisfied that the findings of fact, to which we have referred, make it clear that the claimant's case that there was a breach of the implied duty of trust and confidence by reason of her being made subject to the sickness policy without being told, had no substance. The Employment Tribunal also found in terms that the way in which the Respondent dealt with sickness prior to the new policy coming into effect was in accordance with best practice, and further that the new policy, we understand, was the subject of negotiation and agreement with the relevant trade union.
34. The final point that was raised in ground 6.8 is that the Employment Tribunal made a finding that protected pay was not an option and this was contrary to the evidence. We do not propose to go into the evidence because we are quite satisfied that this is a perversity point; and having regard to the principles set out in Yeboah v Crofton on the basis of the facts that are found by the Employment Tribunal and the evidence it heard, it is quite an impossible submission and one that cannot succeed. It was said that there are contradictory findings between paragraphs 38 and 39. In paragraph 38 the Employment Tribunal found that a meeting had taken place between Mrs Appleby, Human Resources Officer, and the Claimant, and during the course of this Mrs Appleby enquired whether the Claimant was still insisting that if she was to return to work she wanted her pay to be protected. In paragraph 39 the Employment Tribunal found that Mrs Appleby telephoned the Claimant to say that there was no alternative available and the Respondent could not meet her requirement of indefinite protected pay. We do not see any inconsistency between these two findings. Mrs Appleby was not making any offer, as was found by the Employment Tribunal; she was simply enquiring as to the Claimant's position.
35. This now leads us on to the final matter. What should we do? The Claimant says that this matter should be remitted to be heard by a new employment tribunal panel. Attention has been drawn to the recent decision of the President in Sinclair Roche v Temperly [2004] IRLR 763, in which the President considered in detail the circumstances in which it would be appropriate for the Employment Appeal Tribunal to remit cases to the employment tribunal.

"45

Conclusion on issue 1

We are satisfied that the tribunal's conclusion that there was direct discrimination against SF and SH (the referrals issue) and indirect discrimination of SF (the part-time working issue) cannot stand. Mr Gatt QC submits that the case should be remitted for hearing before a different Tribunal. Mr Bean QC submits that this would be catastrophic for his clients, and in any event unnecessary. He refers to the somewhat different procedure which we have been adopting at the preliminary hearing, and indeed sift, stages, by reference to English, as explained in Burns v Consignia (No 2) [2004] IRLR 425, by way of what he referred to as a carefully controlled remission. That however is a practice which is adopted at the interlocutory stage, where, inter alia, there is a case alleged of inadequacy of reasoning, or absence of a finding, and the case is sent back to the same Tribunal simply to answer specific questions, based on its existing notes of evidence. That is not the case here, where we have concluded that the Tribunal has in fact not done, or at any rate finished, its job. This is not a question of what has been described in Burns as a referral back, but of a straightforward remission. The issue nevertheless remains as to whether it should be remitted back to the same tribunal, which, subject to our guidance, will be able to make use of its existing knowledge of the case and notes of evidence, or a fresh tribunal to start again.

46

There is no authority which has been cited to us, or of which we ourselves know, which would assist us in such a situation, and we set out what appear to us to be relevant factors:

46.1 Proportionality must always be a relevant consideration. Here the award was for £900,000, and although we are conscious that ordering a fresh hearing in front of a different tribunal would add considerably to the cost to parties on both sides who have already invested in solicitors and counsel, both at the tribunal and on appeal (in the case of the applicants, two counsel for the appeal), sufficient money is at stake that the question of costs would from the one point of view not offend on the grounds of proportionality and from the other not be a decisive, or even an important, factor. Similarly the distress and inconvenience of the parties in reliving a hearing must be weighed up, but (a) are rendered necessary in any event by the decision to set aside the original decision and (b) will not be greatly less by virtue of the extra time taken by a fully, rather than partially remitted, hearing, the main distress and inconvenience being caused by the matter being reopened at all.

46.2 Passage of time. The appellant tribunal must be careful not to send a matter back to the same tribunal if there is a real risk that it will have forgotten about the case. Of course, tribunals deal with so many different cases per month that it is impossible for them to carry the facts in their minds, nor would they be expected to do so. But they can normally refresh those minds from the notes of evidence and submissions if the case occurred relatively recently. This case was a relatively long one, and will not on that basis alone have completely evanesced from the minds of the tribunal. It was only just a year ago. That in itself is quite a long time, though the lengthy reserved decision sent to the parties on 30 July 2003 would have kept the case in the minds of the tribunal at least until then: but in addition they have held a remedies hearing which began in October 2003, the hearing lasting until 18 December, and then required consideration in chambers' meetings in January and March, and did not result in a promulgated decision until as recently as 19 March 2004. We are satisfied therefore that the question of delay and loss of recollection is not a material factor in this case one way or the other.

46.3 Bias or partiality. It would not be appropriate to send the matter back to the same tribunal where there was a question of bias or the risk of pre-judgment or partiality. This would obviously be so where the basis of the appeal had depended upon bias or misconduct, but is not limited to such a case.

46.4 Totally flawed decision. It would not ordinarily be appropriate to send the matter back to a tribunal where, in the conclusion of the appellate tribunal, the first hearing was wholly flawed or there has been a complete mishandling of it. This of course may come about without any personal blame on the part of the tribunal. There could be complexities which had not been appreciated, authorities which had been overlooked or the adoption erroneously of an incorrect approach. The appellate tribunal must have confidence that, with guidance, the tribunal can get it right second time.

46.5 Second bite. There must be a very careful consideration of what Lord Phillips in English (at paragraph 24) called 'A second bite at the cherry'. If the tribunal has already made up its mind, on the face of it, in relation to all the matters before it, it may well be a difficult if not impossible task to change it: and in any event there must be the very real risk of an appearance of pre-judgment or bias if that is what a tribunal is asked to do. There must be a very real and very human desire to attempt to reach the same result, if only on the basis of the natural wish to say 'I told you so'. Once again the appellate tribunal would only send the matter back if it had confidence that, with guidance, the tribunal, because there were matters which it had not, or had not yet, considered at the time it apparently reached a conclusion, would be prepared to look fully at such further matters, and thus be willing or enabled to come to a different conclusion, if so advised.

46.6 Tribunal professionalism. In the balance with all the above factors, the appellate tribunal will, in our view, ordinarily consider that, in the absence of clear indications to the contrary, it should be assumed that the tribunal below is capable of a professional approach to dealing with the matter on remission. By professionalism, we mean not only the general competence and integrity of the members as they go about their business, but also their experience and ability in doing that business in accordance with the statutory framework and the guidance of the higher courts. Employment law changes; indeed it has been a rapidly developing area of the law. Employment tribunals are therefore all too familiar with the need to apply a different legal approach to a case today from that which they applied last year, or even last week, where the law has changed, although the cases may be on all fours as regards their facts. Some areas of employment law have not been easy, and the approach to be adopted in considering whether there has been race or sex discrimination in a case such as this is just such a matter which has understandably caused problems for tribunals. It follows that where a tribunal is corrected on an honest misunderstanding or misapplication of the legally required approach (not amounting to a 'totally flawed' decision described at 46.4), then, unless it appears that the tribunal has so thoroughly committed itself that a rethink appears impracticable, there can be the presumption that it will go about the tasks set them on remission in a professional way, paying careful attention to the guidance given to it by the appellate tribunal."

36. Miss Morgan submits this is not an appropriate case for remittal to the same Tribunal: we should not allow the Employment Tribunal to have a second bite, this is a decision that was wholly flawed and we could not have any confidence that the Employment Tribunal could deal with the matter properly. There would be a real risk that evidence would be forgotten, and she pointed out that the Employment Tribunal had heard evidence in June 2004, its decision was promulgated on 28 September 2004, and if the matter is to be remitted to them it is likely to be at least 12 months from the date when they heard evidence. Further, she submits that the Employment Tribunal may, if its finds in her client's favour, have to go on to consider questions of the effective cause of the resignation and whether, or not, there had been an affirmation. She submitted that having regard to the decision in Morrow v Safeway the Employment Tribunal's decision was fatally flawed and it would need to make findings of fact, which it had not previously considered.
37. So far as issues of fact are concerned, it seems to us, firstly that in relation to the issue of the effective cause, the Respondent has always conceded that the reasons set out in the letter of resignation were those relied upon by the Claimant and thus were treated by her as being the effective cause. There is thus no factual issue there. Furthermore, so far as affirmation is concerned, we have already drawn attention to the passage in the decision of the Employment Tribunal where the Employment Tribunal at paragraph 5 record that the parties agree that there was no real dispute about the facts of the case. Mr Epstein also drew our attention to the fact that the delay in the Sinclair Roche v Temperley case was even greater than in the present case. In that case the Employment Appeal Tribunal had handed down its judgment on 22 July 2004; whereas the Employment Tribunal decision was handed down on 30 July, and evidence had been heard in March and April. Thus there was a gap of some 17 months, if my mathematics, or Mr Epstein's, is correct.
38. We obviously must have regard to the issue of proportionality. There has already been a three-day hearing of evidence plus a further half day for submissions. Albeit the amount involved is of some significance clearly so far as the Claimant is concerned, it cannot amount to more than £60,000. The figures in the Sinclair Roche v Temperley case were closer to a £1m.
39. It seems to us, in the exercise of our discretion, that this being a case where the parties have already gone to substantial expense, we are not satisfied that the passage of time is such that the Employment Tribunal will have lost all recollection; it will be refreshed from the notes of the chairman and members. We note in passing that the President in Sinclair Roche & Temperley referred to the decision in that case as being having been delivered only "just over a year ago". We do not consider that the Employment Tribunal will have to make any new finding of primary fact for the reasons we have given in relation to effective care and affirmation.
40. The Employment Tribunal misdirected itself as to a matter of law, and we have every confidence that the Employment Tribunal will be able to direct itself correctly, and we have every faith, as the President put it, in the professionalism of the Employment Tribunal to deal with this matter. We assume with confidence that it is capable of a professional approach in dealing with the matter on remission.
41. In those circumstances, we also do not consider that the decision can be categorised as one that was totally or wholly flawed. There had been no complete mishandling: there had simply been a mistaken application of the law as to whether or not a breach of the implied duty of trust and confidence was of necessity repudiatory. In those circumstances we allow the appeal, to the extent to which we set out; and we remit the matter for further consideration by the Employment Tribunal as to whether, or not, having regard to what we have said, it was satisfied that there had been a breach of the implied duty of trust and confidence on the part of the Respondent by Professor Waage having prepared and left the note on his desk. If the Employment Tribunal concludes that there was such a breach it will be necessary for the Tribunal to go on to make findings on the question of effective cause and affirmation. No doubt, the Employment Tribunal will give appropriate directions to the parties. We assume that it will want further written submissions and possibly a further oral hearing: that is a matter for the Employment Tribunal.
42. It remains for us only to thank Miss Morgan and Mr Epstein for their very great assistance and to apologise for the length of this judgment.