United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR THOMAS CORDREY (of Counsel) appearing via the Bar ProBono Unit
For the Respondent	MR MARTYN WEST (Representative) Peninsula Business Services Limited Riverside New Bailey Street Manchester M3 5PB


 


SUMMARY

UNFAIR DISMISSAL: Constructive dismissal

1. The claimant was employed by the respondent from 5 April 2006 until February 2007 when she resigned. She had been allowed to work for one day each week at her home until the respondent unilaterally required her to work solely at the Parish Office

2. The Employment Tribunal held that this was not a repudiatory breach and relied on the fact that there had been many other consensual changes to her contract.

3. The claimant appealed

4. Issue was whether "the requirement to require the claimant to work all hours in the Parish Office was a repudiatory breach, which when accepted, constituted a constructive dismissal".

Held: It was a repudiatory breach because (a) in spite of many changes to her contact of employment, she had always been allowed to work for one day at home; (b) there was a substantial distance from the claimant's home to where she worked and (c) it was clear that the right to work at home for one day each week was particularly important for her


 


THE HONOURABLE MR JUSTICE SILBER

I Introduction

1. Mrs Margaret Norris ("the claimant") worked for Great Dawley Parish Council ("the respondent") from 5 April 2005 to February 2007 when she resigned. She claims that her resignation amounted to a constructive dismissal by reason of the respondent's conduct towards her. By a decision dated 16 January 2008, the Employment Tribunal sitting at Shrewsbury unanimously decided that the claimant had not been constructively dismissed. The Employment Tribunal also dismissed a number of other grounds of complaints by the claimant which are not the subject of or relevant to the present judgment.
2. The claimant sought to appeal all the orders made by the Employment Tribunal but the President of the Employment Appeal Tribunal ordered that the appeal should be set down for a full hearing "only on the grounds that the requirement to require the claimant to work all hours in the Parish Office was a repudiatory breach, which when accepted, constituted a constructive dismissal".

II. The chronology

3. The claimant's permanent employment with the respondent commenced on 12 September 2005 and one of the express terms of the claimant's contract was that on each Tuesday she would work from her home, rather than from the Parish Office. The written Statement of Particulars of Employment which was signed on behalf of the respondent on 19 September 2006 contained provisions with our underlining stating that:

a. under clause 10 of the Particulars of Employment that

"[the claimant's] normal hours of work are 24 hours per week, to be flexible and in agreement with the clerk. 9.00am to 5.00pm Monday and Wednesday, Tuesday, 4 hours working from home, and 9.00am to 1.00pm Thursday";

and

b. under clause 6 and under the rubric "Place of Work" that:

"Your usual place of work is at the council officers, Dawley House, 22 Burton Street, Dawley, with one half day working from your home. You may also be required to work at any other location as determined by Great Dawley Parish Council."

4. The consistent and regular practice of the claimant which was fully accepted by the respondent was that she would to be allowed to work partially at her home. Indeed when the claimant's hours were increased to 30 hours in May 2006, she was still being permitted to work from home on Tuesday mornings as was stated in the respondent's memo of 25 May 2006. Then when the claimant's hours were reduced at the claimant's request to 24 hours in August 2006, it still remained a term of her contract that she could work for four hours on Tuesdays at home as was made clear in the respondent's letter of 30 August 2006 and the respondent's table of the claimant's employment details contained in the memorandum dated 25 August 2006.
5. From 12 September 2005 to 30 May 2006, the claimant worked 24 hours per week and she continued to be permitted to work for four hours at home. As a result of additional duties, as of 1 June 2006, the claimant's hours were increased to 30 hours per week and again she continued to be permitted to work for four hours at home. However, shortly after this the claimant requested that the hours be returned to their previous level and this was agreed by the respondent, subject to ratification by the Policy and Finance Committee. On 30 August 2006 the claimant was sent a letter from the respondent confirming the reduction in her hours back to 24 hours per week but again stating that she would work four hours on Tuesdays from her home.
6. From 1 September 2006, the claimant worked 24 hours per week without any complaint from the respondent. Nevertheless, on 9 November 2006 the Policy and Finance Committee took the unanimous decision not to ratify the reduction in hours. It was not until 23 November 2006 that a letter was sent to the claimant by the respondent informing her of the decision.
7. The claimant was informed by a memo dated 28 November 2006 from the respondent's Clerk that from 4 December 2006 she had to work all of her hours from the parish office and therefore she was no longer permitted to work from home. No reason was given for that decision. It appears that no proposal to that effect had been made by either the council itself or by the clerk of the council who had agreed to the reduction of hours in August 2006 and to whom the claimant was directly answerable.
8. The respondent council met again on 30 November 2006 and it ratified the decision of the Policy and Finance Committee to require the claimant to work 30 hours per week. No express reference was made in the minutes of the meeting to the requirement for the claimant to work all hours in the office.
9. When the claimant learned of the decision in the memo of 28 November, she submitted a grievance by letter of 29 November 2006. When the claimant's grievances were rejected by the respondent, the claimant appealed. When that appeal was also dismissed the claimant promptly resigned in her letter of 27 February 2007 and she referred specifically to the respondent's breach of contract requesting her to work all hours at the office which was also relied upon in her originating application at paragraph 12.

III The Decision of the Employment Tribunal

10. The Employment Tribunal in its Reasons found that the claimant's original grievance made at the end of October 2006:

"38 …arose from the policy and finance sub-committee's decision to seek an in-depth assessment and time analysis of the claimant's role to determine whether it was appropriate for her to reduce her hours. In the course of doing this, it is true, the council did insist that the hours she worked, four of which she was contractually entitled to work at home, now be worked in the council offices."

11. The Employment Tribunal then made the important finding in respect of the decision to require that the claimant ceases to work at home that:

"39. The claimant is correct that what they were proposing was a breach of her contract."

12. The next and critical issue for the Employment Tribunal was to determine whether this breach was also a fundamental breach of contract. Their reasons for holding that it was not a fundamental breach were that:

"39. …However, when we take into account the fact that the claimant herself was allowed to vary her contract on more than one occasion, to suit her, and the whole question arose in context of a possible variation of contract requested by herself, it would seem rather odd if she could claim constructive dismissal on the basis of an anticipatory breach of her contract regarding her right to work at home for 4 hours per week. On the one hand she is aggrieved at the respondent not allowing her to vary her terms, on the other she insists the respondent does not vary the other terms which she likes. Ultimately employers have the ability to vary certain terms of a contract with cause, and on notice. This is not a fundamental term. It could not amount to a fundamental breach of contract sufficient to found a constructive dismissal claim."

IV. Did the Employment Tribunal err?

13. Mr Thomas Cordrey counsel for the claimant contends that the Employment Tribunal erred in holding that the claimant was precluded from contending there had been a fundamental breach of contract because the parties on other occasions had agreed various variations although those variations did not relate to her place of work. In our view, the existence of benevolent bilateral variations to a contract is irrelevant to the questions of whether an unlawful unilateral variation of contract was imposed by the respondent and if so, whether it amounted to a fundamental breach of contract.
14. After all, the previous variations had related to matters other than the right of the claimant to work at home. The basis of the Employment Tribunal's reasoning appears to be that if there are consensual variations of a contract over the years, then none of the other terms of the contract can be regarded as fundamental terms the breach of which could amount to a repudiatory breach. This would mean that if an employer and an employee agreed on a number of occasions that a contract of employment could be varied to change hours of work, then there could never be a fundamental breach of contract if the employer subsequently decided unilaterally to halve the employee's wages because the fact that there had been consensual variations precluded a claim that the breach of another term would be repudiatory. In our view this shows that the Employment Tribunal erred.
15. In other words, we reject what was described by one of this Appeal Tribunal correctly as a "quid pro quo" approach. We regard that submission as justified because as Browne-Wilkinson J (as he then was) explained in giving the decision of this Tribunal in Wadham Stringer Commercials (London) Ltd and another v Brown [1983] IRLR 46, 48 at paragraph 15 (with our underlining added) that:

"Having introduced what you might call that contractual approach it seems to us to follow that, in considering whether or not there is a constructive dismissal one has to approach the matter on a contractual basis throughout. If there is a fundamental contract then, as a matter of contract law, the employee is entitled to accept that repudiation. Neither the circumstances inducing the fundamental breach by the employer, nor the circumstances which lead the employee to accept that repudiation, are relevant as a matter of contract law."

16. In reaching our conclusion that the Employment Tribunal took into account erroneous factors, we have not overlooked the submission made by Mr West on behalf of the respondent who contends that the Tribunal had reached a finding as the fact-finders and that this Tribunal should not interfere with it. We cannot accept that submission as the error made by the Employment Tribunal in this respect was an error of law.
17. We also cannot accept his submission that the appeal should be dismissed because of the wording of paragraph 46 of the Employment Tribunal's Reasons which states that:

"So far as the variation of terms of employment and the extent to which they fuel the constructive dismissal, the tribunal considers it most important to note that no final position had been reached on this at the point the claimant resigned. The return to work document clearly contemplated a continuing discussion which was going to depend upon some sort of security arrangements for her handling sensitive documents in her home. That considerably reduces their significance in any alleged breach of the implied term of mutual trust and confidence."

18. In our view, this paragraph contradicts the finding in paragraph 36 which we have set out above which is that:

"the council did insist that the hours [the claimant] worked four of which she was contractually entitled to work at home, now be worked in the parish council offices."

19. In any event the issue with which we are concerned had in the light of Elias J's direction (which we set out in paragraph 2 above) to be decided on the basis and on the assumption that there was a requirement for the claimant to work all hours in the Parish Office whether it was a repudiatory breach. In those circumstances, we are not concerned with whether or not the requirement was subject to further negotiation or not.
20. We also consider that the Employment Tribunal erred when it said that "ultimately employers have the ability to vary certain terms of a contract with cause and on notice" (paragraph 39). We do not know the basis on which the Employment Tribunal reached that conclusion. There is no express term to that effect and indeed it was not suggested by Mr. West that there was such an express condition. No reason has been suggested as to why such a term should be implied and indeed the Employment Tribunal did not consider the requirements which would have to have been satisfied before a term could be implied in favour of the respondent in the words of the Employment Tribunal's decision which was "to vary certain terms of a contract with cause and on notice".
21. If the Employment Tribunal had considered the requirements that have to be satisfied before a term could be implied, they would inevitably have found that there was no business necessity and that there was no other factor which justified the implication of such a term. Thus we reject the contention that such a term was to be implied.
22. So we conclude that none of the Employment Tribunal's reasons would justify the decision that by requiring the claimant to work all her hours at the Parish Office, the respondent did not commit a repudiatory breach.

V. Was the requirement that the claimant could not work at home for one day each week a repudiatory breach of her contract of employment?

23. The case for the claimant is that a term specifying an employee's place of work has special significance as is shown by the fact that it is the subject of a statutory requirement under section 1 of the Employment Rights Act 1996 by which not only is it necessary for an employee to be provided with a written statement of the particulars of employment but it is also mandatory for that statement to contain:

"either the place of work, or where the employee is required or permitted to work in various places, an indication of that and the address of the employer" (Section1(4)(h)).

24. The claimant's case is that the importance of a term relating to the location of the employer's work is emphasised by two further statutory requirements. First such a term is singled out above other section 1 terms as a term which must be included within a single document (see Section 2(4)). Second, even if the employer has a right to change a term relating to where an employee works, there is a statutory duty to give the employee a written statement containing particulars of that change (see paragraph 4 (1)).
25. We do not think that this means that in every case where the place of work of an employee is changed that means that this would be a breach of a fundamental term. Obviously it is easy to envisage cases in which an employee asked to move his or her office from one building to the adjoining building and that save in exceptional circumstances would not constitute a breach of a fundamental term if there was a condition that the employee would work in the first building. Nevertheless the place of work of an employee can in appropriate cases be a matter of such importance as to amount to a fundamental term the breach of which would constitute a repudiatory breach.
26. In this case there were three significant factors which have led us to the conclusion that the decision to prevent this claimant from working at home for one day per week was in the circumstances of this particular case a repudiatory breach.
27. The first significant factor was that in contractual document which indicted how the claimant should perform her duties to the respondent, there were clear conditions that the claimant could work at home for one day per week. It is noteworthy that as we have explained the contract of employment of the claimant was changed on three occasions and on each occasion, she continued to be permitted to work for four hours at home. The second factor was that the claimant's home was according to the Employment Tribunal twenty minutes drive away from where she had previously lived in Dawley and this showed that there might well be some substantial advantage and benefit to the claimant from working at home rather than at the respondent's offices. Finally it is significant that the place where the claimant wanted to work for one day per week was her home and that might well have particular attractions for her.

VI Conclusion

28. So in the particular circumstances of this case, we conclude that this was a fundamental term of the contract with the result that in respect of the ground which the President of this Tribunal gave the claimant permission to pursue, the requirement that the claimant works all hours in the Parish Office was a repudiatory breach which when accepted constitutes a fundamental breach of contract.
29. We have come to the conclusion that this matter has therefore to be remitted to consider (a) whether the employee resigned in response, at least in part to the fundamental breach to alter the claimant's contract of employment and if so (a) the reason for the claimant's dismissal, (b) whether the dismissal was fair and (c) whether the claimant caused or contributed to that dismissal. We have no idea if the claimant will succeed on all or any of these points.
30. Having considered whether this matter should be remitted to the same Employment Tribunal or to a differently constituted one, we have concluded that it should go to a differently constituted Employment Tribunal as this case relates to matters which occurred almost 2 years ago and it is vital that the remitted hearing before the Employment Tribunal takes place as soon as possible. Moreover the original Employment Tribunal is unlikely now to have any detailed recollection of the fact of this case.