United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR S PERHAR (of Counsel) Instructed by: Messrs Attwater & Liell Solicitors Rothwell House, West Square The High HARLOW Essex CM20 1LQ
For the Respondent	MR I QUIRK (of Counsel) Instructed by: Messrs MLM Solicitors Pendragon House Fitzalan Court, Newport Road CARDIFF CF24 0BA


 


SUMMARY

UNFAIR DISMISSAL: Constructive dismissal

In upholding the Claimant's disability discrimination claim and dismissing her constructive dismissal claim, the Employment Tribunal misconstrued her letter of resignation, which was unequivocal save for invoking, as required, the grievance procedure, and failed to add the preceding conduct to the final straw. Omilaju applied, Norwest Holst distinguished.

Appeal allowed and constructive dismissal claim remitted to same Employment Tribunal.


 


HIS HONOUR JUDGE McMULLEN QC

1. This appeal is about constructive unfair dismissal. It is the judgment of the court to which all members appointed by statute for their diverse specialist experience have contributed. We will refer to the parties as the Claimant and the Respondent.

Introduction

2. It is an appeal by the Claimant in those proceedings against part of a judgment of an Employment Tribunal sitting at Birmingham over eight days under the Chairmanship of Employment Judge van Gelder, registered with reasons on 23 July 2008. The parties were represented respectively by Mr Simon Perhar and Mr Iain Quirk of counsel. The Claimant claimed constructive unfair dismissal and unlawful discrimination on the grounds of disability. She succeeded on the latter and was awarded compensation of £4,270.25. There is no appeal. She failed on unfair dismissal. The appeal is against that.
3. Elias J, President as he then was, found that two grounds of appeal were arguable, the last straw point and the resignation letter point. The second had good prospects but could not succeed without the first. On an application under Rule 3(10) HHJ Richardson allowed both grounds to go forward to a preliminary hearing and HHJ Serota QC and members at a preliminary hearing took the same view.

The facts

4. Because so much of the dispute between the parties has been resolved without further appeal and because we have decided that the case will be sent back to the Employment Tribunal for it to make a decision, it is necessary to say very little.
5. The Claimant was employed by the Respondent, a government agency, for 27 years. She has a disability, an injury to her hand. She worked three days a week from home and on two days travelled 30 miles by car to her office, since public transport is wanting in her part of the West Midlands. She was regarded as a home worker. Over a period of time the Respondent decided to do away with home working. It was the policy to give 91 days' notice to people who were affected. The Claimant was told that home working would come to an end and there was considerable discussion about how to accommodate her back in the office full time. It included making a number of adjustments. Alternatives were also canvassed such as ill health retirement but none of these was entirely satisfactory to her. The Respondent then gave about three weeks' notice that her home working would come to an end, less than had been given to home workers who were not disabled. She contended that was a detriment, suffered as a result of her disability. The Tribunal upheld that case.
6. In due course she resigned. The Employment Tribunal directed itself on the nature of constructive dismissal following "the final straw" in terms which, at one stage, appeared to be unimpeachable for it considered the judgment of the Court of Appeal in Omilaju v Waltham Forest London Borough Council [2005] ICR 481 and directed itself as follows:

"The Tribunal was required to give further consideration to the prior conduct of the Respondent in order to decide whether cumulatively its actions had amounted to a repudiation of the Claimant's contract."

This distinguishes what the Tribunal describes as the prior conduct of the Respondent from the resignation. As to the former, the Tribunal held that the majority of the Claimant's criticisms of the Respondent were not sufficiently serious as to amount to conduct calculated to destroy or seriously damage the employment relationship. The Respondent was inconsiderate and the effect of it undermined the Claimant's confidence that her problems would be resolved. .The resignation is the second or the final straw and that depends on a construction of the letter itself.

The issues

7. The Tribunal acknowledged that the most unsatisfactory element of the Respondent's conduct was the very short notice given to the Claimant to confirm the termination of home working and as to which the Claimant had a legitimate concern. The Tribunal considered whether or not a claim had been made under the final straw doctrine and it held it had. On appeal, it is contended that the Tribunal erred, for although that was not the expressed principal claim of the Claimant, the Tribunal ought to have considered whether the short notice which resulted in the resignation letter was itself a repudiation of the contract. The second issue relates to whether or not the Claimant had answered the alleged repudiation by an unequivocal acceptance and resigned.

Discussion and conclusions

8. We will deal with the arguments of counsel at the same time as we reach our conclusions upon them.

Repudiatory acts

9. The first issue relates to the direction on constructive unfair dismissal. Mr Quirk, on behalf of the Respondent, despite valiant resistance, accepted that the Tribunal in at least three lines committed two errors of law, for it says this:

"Has the Respondent committed a breach of contract which goes to the root of the employment relationship or a series of breaches culminating in a breach which is effectively the last straw?"

The correct direction is actually given by the Tribunal in the following terms:

"7.1.2. … In Woods v WM Cars Services (Peterborough) Limited [1982] IRLR 413, Glidewell LJ said: "The breach of this implied obligation of trust and confidence may consist of a series of actions on the part of the employer which cumulatively amount to a breach of the term, though each individual incident may not do so. In particular in such a case the last action of the employer which leads to the employee leaving need not itself be a breach of contract; the question is, does the cumulative series of acts taken together amount to a breach of the implied term?'

This passage was quoted with approval by Dyson LJ in Omilaju at paragraph 14 in which he sets out the propositions of law:

"A relatively minor act may be sufficient to entitle the employee to resign and leave his employment if it is the last straw in a series of incidents ... Although the final straw may be relatively insignificant it must not be utterly trivial ... The act does not have to be of the same character as the earlier acts relied on ... If the later act on which the claimant relies is entirely innocuous it is unnecessary to examine the earlier conduct of the employer."

It can be seen from that what is sought in a constructive unfair dismissal claim is not a series of breaches of contract but a series of actions, none of which may be a breach of contract in itself but which in aggregate amount to a fundamental breach entitling the Claimant to resign.

10. From that unpromising start, the Tribunal misdirecting itself, the question arises as to the way in which the Tribunal treated on the one hand the preceding conduct and on the other the short notice. The Tribunal approached this in a way which we hold to be unsatisfactory for it said this:

"However it is not the Claimant's case that this single breach was of a sufficiently serious nature to amount to a repudiatory breach. Her case is that it is the last straw only. The breach was not of any express term of the Claimant's contract. At best it was a breach of an implied term. However, the thrust of the Claimant's criticism is that it was a disparity in treatment:

'The refusal to provide me with 12 weeks' notice given to all the other home workers except me and one other person, is both discriminatory and a breach of contract.'

As the preceding conduct relied on by the Claimant whilst open to criticism to a certain extent, did not in the view of the Tribunal amount to conduct which the Claimant could reasonably consider to be calculated to destroy or seriously damage the employment relationship and the final breach in the form of the notification of the withdrawal of home working was not relied on solely as a repudiatory breach, then the Claimant has not made out her constructive dismissal claim."

11. Mr Perhar contends first that the Tribunal should have considered in isolation the issue of whether or not there was a fundamental breach in the short notice. We do not agree and we accept Mr Quirk's submission that the Tribunal did nothing wrong here. Counsel represented the Claimant, the point was carefully put and recorded in the judgment - this is a last straw case. Indeed, what is the point in hearing all the previous evidence and being asked to make decisions about the individual elements of the preceding acts if all that were necessary was to adjudicate whether or not the giving of short notice was a fundamental breach of contract?
12. However, we part company with Mr Quirk on the other aspect of this, which is the way in which the Tribunal treated the preceding conduct and the final breach. The Tribunal makes a finding that the final straw was actually a breach of an implied term. It is set out in the quotation by the Employment Tribunal above. Thus although the Tribunal has committed an error of looking for breaches, it has actually found that there was a breach of the implied term not to treat people disparately by reason of their disability. The 91 day notice is not itself a contract but it is a policy and the Tribunal having found that there was a detriment by way of unlawful disability discrimination should have added that to the preceding acts. It eschewed doing so because it noted that that last straw had not itself been put as a single act of repudiatory breach of contract; that is an error. The correct approach was to add the last straw to the previous acts.
13. The Tribunal recorded various criticisms of the Respondent; but it held that the preceding acts did not themselves in aggregate constitute a fundamental breach. What it has not done is to consider the effect of its powerful, we may say, finding of unlawful discrimination and to add that to the preceding conduct. It is possible to find the preceding acts fall short of a fundamental breach; by definition they will since it is only when the final straw is added that the Tribunal stands back to say all of the preceding acts together with the final straw constitute repudiation.
14. This is a process of evaluation and appreciation of the evidence. We were asked if we were to come to this conclusion to decide the issue ourselves. We have canvassed submissions from both counsel. In our judgment, this matter should be remitted to the Employment Tribunal for it to evaluate the factual matters to decide whether the preceding acts together with the act of unlawful discrimination constitute repudiatory breach.
15. We bear in mind what Elias J said in The Law Society v Bahl [2003] IRLR 640 at para. 89, which is that not every act of adverse treatment is a detriment and adverse treatment can stem from reasonable conduct. An act of discrimination is capable of being a breach of contract; and here, firm findings are made of that. We think the Tribunal may have temporarily lost sight of its powerful finding of unlawful discrimination when it evaluated this. Certainly the single reason for rejecting the correct approach, that is that the final straw was not added to the previous, as a fundamental breach, was an error.
16. Dickens may not have been the first to say "the last straw breaks the laden camel's back". It would usually be the case that the last straw will not of itself be of great significance. In this imagery, and wherever straw is used popularly, it is insignificant but acquires significance in context eg. a straw in the wind, or testing patience to destruction. For constructive dismissal, however, so long as it can be said it is not utterly trivial (see Omilaju) it will add to the load. That is a matter for the Tribunal, as the figurative assessment of weight always is.

The letter of resignation

17. We turn then to the second issue which is whether or not the Claimant had given an equivocal answer to the repudiation. The Tribunal cites part of the letter of resignation of 30 June 2007, holding that she was claiming constructive dismissal and citing the reasons for her decision to resign as being the preceding issues together with the short notice. What the Tribunal then says is this:

"Whilst the Claimant appears to have drawn a line in the sand at that point, she then introduces a reservation of her position:

'Obviously if my appeal is successful and injury leave is granted, I will reconsider my case further; but for now, to avoid further delay, I intend on pursuing a constructive dismissal case.'

It is not open to a party to make a conditional acceptance of repudiation. If the Claimant is not treating the contract as discharged then the basis for a constructive dismissal claim falls away. At the point of writing her letter of resignation the Claimant has clearly become tired of waiting. But she had not totally abandoned the prospect of remaining in post if she were awarded injury leave on appeal. On that analysis the Tribunal concluded that the Claimant had not resigned as a result of the breaches referred to in the preceding paragraphs."

18. Mr Quirk submits that this is a qualified resignation and sitting on the fence is not to be regarded as unequivocal. See Norwest Holst Group Administration Limited v Harrison [1985] ICR 668 CA where Neill LJ said this:

"But in my view the matter was put beyond doubt by the fact that the letter was headed 'without prejudice.' Such a heading was a plain indication to the recipient that the statements in the letter were qualified and that the writer was free in future, either as the result of negotiations or otherwise, to modify some of the statements in it or even withdraw them. Indeed, I did not understand Mr McLeod to challenge that in the ordinary way the words 'without prejudice' have this effect."

19. The language in that case was markedly different from ours. The first thing to say is that the Tribunal has not done justice to the force of the Claimant's letter. On at least half a dozen occasions she talks about notice. She is a conscientious employee of the Department, is concerned to give the requisite notice, although of course under Section 95(1)(c) of the Employment Rights Act 1996 she does not have to, and she is concerned also to notify the employer that she will bring proceedings for constructive dismissal.
20. The regime set up by the short lived regulations under the Employment Act 2002 requires a grievance to be lodged if there is to be a constructive dismissal claim. The Tribunal acknowledges, as does the Respondent, that this letter is a grievance. The policy of the legislation as set out in Shergold v Fieldray Medical Centre [2006] IRLR 76, cited by the Employment Tribunal itself, is to ensure that disputes at the workplace are resolved at the workplace without reference to a Tribunal if at all possible.
21. It follows that in every case of constructive unfair dismissal, a Claimant was required to put in a grievance, ostensibly if not actually seeking to resolve the matter internally. Since this can be done during a notice period, an employee who says that this is a grievance and would like to meet to discuss it at a step two meeting is not in any way diminishing the potency of the reasons she gives in a resignation letter. The letter also makes clear that there is finality; she is asking for rounding up of the holiday pay due to her, she wants the records that are held by the Respondent on her and she does not want any further correspondence, for she will leave it to an Employment Tribunal.
22. In our judgment, as a matter of construction, this letter is a resignation, it is unequivocal. All it seeks is finality in respect of two outstanding matters as to which the Respondent had not carried out its duties. It had not answered her request for injury leave and it had not resolved the issue of ill health retirement. The only thing the Claimant left open was that when she gets both of those answers she might reconsider her case. Indeed, if she were let go on ill health retirement it might well change the nature of the separation. Thus the Tribunal erred in holding that the resignation had been equivocal. It erred in construing this letter and treating the Claimant like the Claimant in Norwest Holst, as adopting a without prejudice negotiating position. There is no hint of that in this letter. The letter is full of reasons given by her for leaving, which include both the preceding conduct and the short notice.

Disposal

23. The appeal is allowed. The parties cannot have lost confidence in this Employment Tribunal for it is undoubtedly correct in its disability findings, not the subject of any live appeal and it has, in its very substantial 37-page judgment, made many findings. All it has to do is do the additions. This matter will be remitted to the same Employment Tribunal to reconsider. It may do it at a hearing or on hearing submissions from counsel, according to how it chooses. The Claimant's application for costs refused [reasons not transcribed].