United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	Mr Alasdair Hardman (Advocate) Instructed by: Messrs Kidstons & Co Solicitors 1 Royal Bank Place Buchanan Street Glasgow G1 3AA
For the Respondent	Mr Robert A MacKinnon (Solicitor) PO Box 5059 Alexandria G83 3AL


 


SUMMARY

Unfair Dismissal – Constructive dismissal

The Employment Tribunal found that an employee had been constructively dismissed in circumstances where he resigned following his employers' refusal to pay him benefits under an "Injury on Duty" scheme. The tribunal found that, in so doing, the employers had acted as no reasonable employer would have done and that they were motivated by being ill disposed towards the employee as he had become a "thorn in the flesh of management" over health and safety issues. On appeal, it was argued that the tribunal had failed to apply the appropriate "contract" test. The Employment Appeal Tribunal were not persuaded that the tribunal had failed to do so.


 


THE HONOURABLE LADY SMITH

Introduction

1. The Appellants, a large national company, employed the Respondent as a mobile patrol response officer. He claimed that he had been unfairly constructively dismissed, sought compensation and was successful before an Employment Tribunal sitting at Glasgow, Chairman Mr J Hendry. Both parties were represented by solicitors before the tribunal. They were represented by counsel and a solicitor before us.
2. We propose to refer to parties as Claimant and Respondents.

Background Facts

3. The Claimant had been employed by the Respondents since 30 October 2000. Between then and May 2004 he had regularly sought to bring health and safety matters to the attention of the Respondents. He felt that he had been harassed and victimised in the past on account of his doing so.
4. The Claimant's duties included patrolling buildings, attending alarms and guarding sites. He had to drive the Respondents' vehicles in the course of his work. In the early hours of 30 May 2004, the Claimant was on duty alone in one of the defenders' marked patrol vehicles. He was travelling from Airdrie to Glasgow via Chapelhall and was a short distance from the motorway. He came across two youths wrestling in the middle of the road and as he passed he heard a bang at the rear of the vehicle which made him suspect that one of the youths may have kicked the vehicle or been struck by it.
5. The Respondents had had concerns about damage to their vehicles and had issued a memorandum to staff regarding the matter of taking care of vehicles and avoiding accidents, in June 2003. They had also instructed employees including the Claimant to take care of their personal safety and to avoid placing themselves in situations of danger.
6. The Claimant drove on for about 50 yards and stopped. His reason for doing so was twofold; he wanted to alert the police to the incident lest he had injured one of the youths and he wanted to check the vehicle for damage so that he would be able to explain it to the Respondents if damage had occurred. As he was sitting in the vehicle trying to phone the police, a fist came through the closed window on the driver's side and struck him so as to cause him to lose consciousness.
7. The Claimant was too ill to return to work and filled in a form to claim benefits under an "Injury on Duty" ("IOD") scheme which was funded by the Respondents and was available to the Claimant under his contract of employment. The terms of that scheme included the following condition:

"F2 if an employee suffers injury in any way attributable to his/her own negligence or failure to use or carry any protective clothing or equipment issued for his/her protection , he/she may forfeit all rights to any Benefit ……."

And the guidelines contained in a document entitled "Interpretation of the Accidental Injury - Assault – on Duty (Temporary Total Disablement) Scheme" included:

"For Benefit to be payable the person who suffered injury must not have brought about the incident either deliberately or through negligence. In determining the question of negligence, the training received by the person should be taken into account among other factors."

8. By letter dated 6 July 2004, the Respondents' Area Manager, Mr Farrell, declined the Claimant's application for IOD benefit. His letter included the following:

"I regret to inform you that I will not be authorising injury on Duty Payment. My reason for this is that the additional guidelines in the scheme require that 'the person must not have brought about the incident either deliberately or through negligence'. After the vehicle was kicked, you could and should have removed yourself altogether from the situation as you have a responsibility for your own Health & Safety. Instead, you chose to do a U-turn and park the vehicle in a position of potential danger which subsequently resulted in you being assaulted."

9. Mr Farrell did not meet the Claimant, visit the scene of the incident, contact the police or obtain a medical report detailing the Claimant's injuries. He checked what training the Claimant had received and noted that he had simply been given a copy of the generic work instruction to take care of his personal safety and avoid putting himself in a position of danger. He did not review the Claimant's work history. Mr Farrell took the view that the Claimant had been negligent in parking his vehicle near to the scene of the incident and that was all he needed to consider.
10. On 6 July 2004, the Claimant replied expressing considerable outrage that his claim had been rejected. He believed that the refusal was because he had been in the habit of raising health and safety matters with the Respondents. He appealed the refusal to allow him IOD benefit. The appeal was considered by the Respondents' HR director, Rupert Brice. He refused the appeal on the basis that the Claimant had, in his view, been negligent in not driving away from the incident.
11. In about August 2004, other employees had become aware that the Claimant had been refused benefit and expressed concern to their shop steward, Mr Mitchell. He spoke to Mr Farrell about their concerns. Mr Farrell told him that the Claimant was being treated differently from the way in which other employees were being treated and went so far as to say that Mr Mitchell should pacify his members because "if any other employee" other than the Claimant had made the claim, he would have been paid.

The Tribunal's Decision

12. The tribunal refer to section 95 (1)(c) of the Employment Rights Act 1996 and state that they have also had regard to the case of Western Excavation (ECC) Ltd v Sharp [1978] IRLR 27. They then, at paragraph 40, state:

"The Tribunal then examined the facts that it had found to ascertain whether the respondents had, without reasonable cause, conducted themselves in such a way as to destroy or seriously damage the relationship of trust and confidence."

clearly bearing in mind that there is, in every contract of employment, an implied mutual duty of trust and confidence and that duty will be found to have been breached if, without reasonable and proper cause, an employer conducts himself in such a way as calculated to destroy or seriously damage that relationship of trust.

13. At the end of paragraph 43, the tribunal state their view that the actions of the Respondents amounted to a fundamental breach of contract. The route by which they arrive at that conclusion is as follows. They decided firstly that, having examined the whole facts and circumstances of the incident in which the Claimant was injured, no reasonable employer would have decided that the Claimant had been negligent. Secondly, the Respondents decided as they did because the Claimant was a "thorn in the flesh of management" due to his repeatedly having raised health and safety issues. This was an assessment that was based on what Mr Mitchell had learnt from Mr Farrell about their attitude to the Claimant.
14. Further, the tribunal were satisfied that the Claimant resigned principally because of the refusal of IOD benefit. He did so in circumstances where he suspected that he was being refused benefits because of having raised health and safety issues in the past.

The Relevant Law

15. Section 95(1)(c) of the Employment Rights Act 1996 is the statutory provision which allows for what is known as "constructive dismissal" and it provides:

"..for the purposes of this Part an employee is dismissed by his employer if (and subject to Subsection (2) and Section 96, only if) –

( c) the employee terminates the contract under which he is employed ( with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employers' conduct."

16. The correct approach to determining whether or not there has been a constructive dismissal was discussed in the well known Western Excavation case. There, the Court of Appeal stressed the need to remember that it only arises if it can be said that there has been a repudiatory breach of contract. It is not, accordingly, enough simply to observe that an employer has acted unreasonably. That is not, however, to say that the reasonableness or otherwise of an employers' conduct is irrelevant to a consideration of whether or not constructive dismissal has occurred. At one end of the scale, if an employer's conduct has reasonable cause, then the implied duty of trust and confidence will not have been breached and such a dismissal will not have occurred (see: Malik v BCCI SA [1997] IRLR 462 at para.70 per Lord Steyn). Likewise, it must be the case that conduct of an employer which goes to the root of the contract will often if not usually be unreasonable conduct. So long as a tribunal bears in mind that the test is whether the employer is guilty of a breach which goes to the root of the contract or shows that the employer no longer intends to be bound by one or more of its essential terms, it is not wrong of it to look at the question of whether or not the employer acted unreasonably and if he did, to weigh and assess the extent of that unreasonableness. As Lawton LJ put it, in Western Excavation at paragraph 26:

"…I do not find it either necessary or advisable to express any opinion as to what principles of law operate to bring a contract of employment to an end by reason of an employer's conduct. Sensible persons have no difficulty in recognising such conduct when they hear about it ……………………..I appreciate that the principles of law applicable to the termination by an employee of a contract of employment because of the employer's conduct are difficult to put concisely in the language judges use in Court. Lay members of Industrial Tribunals, however, do not spend all their time in Court and when out of Court they may use and certainly will hear, short words and terse phrases which describe clearly the kind of employer of whom an employee is entitled without notice to rid himself. This is what para.5(2) is all about ; and what is required for the application of this provision is a large measure of commonsense."

The Appeal

17. For the Respondents, Mr Hardman began by observing that whether or not that there has been a relevant breach of contract in a constructive dismissal case is a question of fact. That meant that the tribunal were obliged to assess the Respondent's behaviour against the terms of the contract of employment. They should have asked whether the employers were entitled to interpret the condition of the IOD scheme in the way that they did and apply it to the facts in the way that they did. This tribunal had not done that. They had used a "reasonable employer" test instead. Had they used the correct test, they would not have found that there had been a breach because, on the facts of the case, it was open to the Respondents to decide that the incident was brought about by the Claimant's negligence. As against that, Mr Hardman accepted that if the Respondents had declined to pay out under the scheme when they should have agreed to do so, then that would be conduct that went to the heart of the contract of employment and breached the duty of trust and confidence.
18. Further, the tribunal were perverse to have found that the only reason for the Respondents acting as they did was that the Claimant was a thorn in their flesh. They had not looked properly at the question of whether the Respondents had come to the view that the Claimant was negligent.
19. For the Claimant, Mr MacKinnon submitted that the tribunal had applied the proper test. They had considered the behaviour of the Respondents and come to the view that it amounted to a fundamental breach of contract. It was not wrong to have considered reasonableness. The scheme itself involved the application of a measure of discretion and it was relevant in that regard. There had been no finding of any causal link between the Claimant's conduct and his injury. The Respondents had acted on an assumption. They had, further, overall and under particular reference to the matter on which Mr Mitchell had given evidence, acted in such an unreasonable fashion as to have fundamentally breached the contract.

Discussion

20. We are not persuaded that the tribunal erred. As we have already indicated, we take the view that it is not irrelevant per se to consider whether or not an employer's conduct was reasonable when determining a claim for constructive dismissal. It was of particular relevance to do so in this case when considering what the Respondents had done and why they had done it.
21. The Respondents' decision was reached against a background of circumstances in which it was never determined that the perpetrator of the assault on the Claimant was a participant in the incident which he had encountered in Chapelhall yet it was decided that the Claimant had brought about his own injuries by stopping 50 yards from that incident to telephone the police and remaining in his vehicle with the windows closed facing the direction of the incident through which he had passed. Bearing in mind these circumstances and that if reasonable care has been taken then it cannot be concluded that there has been negligence, we agree with the tribunal when, at paragraph 42, they say:

"…we cannot see any reason how a reasonable employer could suggest that the claimant was negligent by stopping his vehicle some distance away from the first incident to telephone the police."

22. We note that the tribunal found not simply that the Respondents' assessment of the Claimant as having been negligent was unreasonable but went as far as to find that it was an assessment that no reasonable employer would have made. That is an assessment which we consider that they were entitled, on the evidence, to reach.
23. It is also of relevance to note that the Respondents' decision was reached in circumstances where, under the scheme, even if an employee has been negligent, they are not bound to refuse payment. The use of the word "may" in clause F2 makes that plain. They have a discretion in the matter. The matter being one of discretion, the Respondents are bound to exercise it reasonably; an unreasonable exercise of that discretion would amount to them refusing payment when they ought not to do so and that, in turn, as was accepted by Mr Hardman, would involve a breach of the duty of trust and confidence.
24. That was not, however, an end to the tribunal's reasoning. Having found that the Respondents had acted unreasonably in a manner that no reasonable employer would have done, they asked themselves if they could identify why that had happened. On the evidence, they concluded that the Respondents decision was reached, further, in circumstances where, as the Claimant suspected was the case, they were targeting him due to the fact that he had regularly raised health and safety issues with them so as to become a "thorn in the flesh of management". Mr Mitchell's evidence on this matter was regarded by the tribunal as crucial (paragraph 39) and they were entitled, in all the circumstances, so to regard it. It was open to the tribunal to infer, from that evidence together with the Respondents' decision falling below the minimum standards of reasonableness, that the reason the Respondents decided not to pay the IOD was a quite improper one and was, indeed, the reason that the Claimant had suspected was the case. They drew that inference. Having done so, we are readily satisfied that they were entitled to go on and conclude, as (at paragraph 43) they did, that the whole actions of the Respondents amounted to a fundamental breach of contract so as to give rise to an unfair constructive dismissal.

Disposal

25. In these circumstances, we will pronounce an order dismissing the appeal.