United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR NIRAN DE SILVA (of Counsel) Instructed by: Nationwide Building Society Legal Services Pipers Way Swindon SN38 1FN
For the Respondent	MR ROGER HARPER (of Counsel) Instructed by: Messrs A E Smith & Sons Solicitors Frome House London Road Stroud GL5 2AF


 


SUMMARY

UNFAIR DISMISSAL: Constructive dismissal

The Tribunal erred in law in its approach to the question of constructive unfair dismissal, misapplying the judgment of the Employment Appeal Tribunal in Abbey National plc v Fairbrother [2007] IRLR 320. Discussion of Abbey National plc v Fairbrother and Claridge v Daler Rowney Limited [2008] IRLR 672.

Note: shortly before this judgment was to be handed down, a different division of the Appeal Tribunal handed down judgment in Bournemouth University Higher Education Corporation v Buckland [2009] UKEAT/0492/08, BAILII: [2009] UKEAT 0492_08_0805. That division of the Appeal Tribunal, declined to follow Abbey National plc v Fairbrother and Claridge v Daler Rowney Limited. We have incorporated references to Bournemouth University Higher Education Corporation v Buckland in this judgment and explained why we have not considered it necessary for the purposes of this appeal to call for any further argument or to express any concluded view as to the effect of the Bournemouth case.


 


HIS HONOUR JUDGE RICHARDSON

1. This is an appeal by the Nationwide Building Society ("the Society") against a judgment of the Employment Tribunal sitting in Bristol (Employment Judge Owen presiding) dated 9 September 2008. By its judgment the Tribunal found that the Nationwide Building Society ("the Society") had unfairly and constructively dismissed Mr David Niblett from his employment. The Society seeks to overturn this finding.

The background facts

2. Mr Niblett was employed by the Society as a Senior Computer Systems Developer. His salary was £45,000 per annum, but he was also entitled to payment for overtime authorised by his line manager. In respect of the months of November and December 2006 he was paid, in addition to overtime authorised by his manager, the sum of £1,816.67 each month, equivalent to 50.5 hours of overtime, for which he had made no claim. The overtime was signed off by a technical manager for whom Mr Niblett did work.
3. In due course the Tribunal, for the purposes of deciding whether Mr Niblett contributed to his own dismissal, made findings concerning these additional payments. They found that Mr Niblett knew he had not claimed them and knew that he had not operated the correct procedure for doing so. Mr Niblett had never mentioned payment to his line manager; the Tribunal found that surprising and concluded that he had "kept his head down". The Tribunal found that he must have been aware that the payment was irregular and that the way he behaved was unfitting for a senior employee of many years' standing. That was the foundation for the Tribunal's finding that Mr Niblett contributed to his own dismissal.
4. During the spring of 2007 the Society commenced a fraud investigation in connection with employees who either claimed or received overtime beyond their entitlement. Mr Niblett was one of a number of staff members interviewed on 21 June 2007. His interview related to the overtime payments we have mentioned.
5. By letter dated 7 August 2007 the Society commenced disciplinary proceedings against Mr Niblett, the charge being that he "allegedly fraudulently received overtime not authorised by his line manager".
6. The Society's disciplinary procedure made provision for three levels of misconduct. "Minor misconduct" might lead either to an informal warning or to a written warning. "Major misconduct" might lead to a final written warning. Only "gross misconduct" might lead to summary dismissal. The procedure gave examples of gross misconduct, which included theft, fraud and dishonesty. "Major misconduct" was said to cover "substantial infringements of a serious nature". "Minor misconduct" was said to cover infringements of a minor nature, examples of which were lateness or poor attitude.
7. Mr Niblett was sent the papers on which the Society relied in good time for the disciplinary hearing, which was at 2pm on Monday 13 August. He asked for a transcript of the June interview. This was provided to him on Friday 10 August. So he had a weekend to study it.
8. The Society relied on a case summary prepared from the interview rather than the interview itself. The case summary referred to Mr Niblett as saying at the interview that the unauthorised overtime was "Appreciation for all [his] hard work that year". The interview transcript however recorded him saying that the payments were "To recognise my efforts and a lot of unpaid overtime that I had done throughout the year".
9. At the disciplinary interview the disciplining manager, Mr Bland, was satisfied that there was no fraud or collusion between Mr Niblett and the technical manager. As the Tribunal found, Mr Bland accepted and thought that Mr Niblett's real fault was his failure to check with his line manager why he had received two substantial payments for overtime which he had not claimed.
10. The disciplinary interview was adjourned overnight. In the morning Mr Bland attended a case conference with two other managers who were dealing with disciplinary hearings arising out of the same fraud investigation. The discussion included possible penalties. In the afternoon Mr Bland reconvened the hearing and imposed a final written warning for "willingly accepting payments from a non mandated employee without appropriate challenge". Under the Society's disciplinary policy such a warning remains on file for 24 months and has a bearing on appraisal, salary review and promotion applications for the first 12 months.
11. On 8 October 2007 Mr Niblett's appeal against his final written warning was heard and dismissed. The Tribunal found that this was a very limited appeal, where the manager hearing the appeal unjustifiably took the view that she was only entitled to consider new material.
12. Being dissatisfied with the outcome of the disciplinary process Mr Niblett lodged a grievance on 11 October 2007. The Society rejected the grievance without hearing it because it took the view that it did not allow an employee to raise a grievance in respect of a disciplinary or appeal process. Mr Niblett pursued correspondence about his grievance, finally writing on 16 December 2007 to the Chief Executive. He received no answer to the letter. It seems, although the Tribunal do not make any findings about it, that Mr Niblett instructed solicitors. On 23 January 2008 the Society's legal department wrote to him to say that what he was seeking to do by way of grievance was "a clear abuse of procedure". The letter asked him to inform his solicitors that if he persisted in pursuing the matter the Society would expect him to pay the legal costs incurred in doing so.
13. On 4 February 2008 Mr Niblett resigned, complaining of the continuing unfair treatment he was receiving from the human resources department and the lack of support from the technology division.

The Tribunal's reasons

14. The Tribunal's legal approach is set out in paragraphs 3 and 5 of its reasons.

"3. Mr Niblett alleges unfair constructive dismissal. We remind ourselves that in accordance with well established guidelines he must satisfy us in respect of three matters if such a claim is to succeed that:

i. he resigned because of a fundamental breach of contract by his employer or of a series of breaches which were sufficiently serious for him to conclude that they went to the root of the employment contract, and

ii. he resigned either entirely or substantially because of that breach or those breaches, and

iii. he did not act too hastily or delay too long.

5. We have reminded ourselves that the burden of satisfying us that this was a constructive dismissal lies with Mr Niblett who must do so on the balance of probabilities. In recording our findings of fact we will indicate where we consider that there have been breaches of contract. We also remind ourselves that breaches of contract may arise because of the company's failure to apply a specific contractual term. Alternatively, however, an employee is entitled to rely upon certain well established implied obligations on the part of his employer including a duty on the respondent's part not to do anything which damages or destroys trust and confidence."

15. In the specific context of the disciplinary hearing, the Tribunal also said this.

"11. Before we turn to deal with the question of the disciplinary meeting itself we remind ourselves, briefly, of the obligations of an employer when conducting a disciplinary hearing. The employer must conduct it in such a way that enables the member of staff to understand the evidence against him and gives him a proper opportunity to respond to those allegations and present his case. It is not for the Tribunal to say that they would have conducted a hearing in a different manner: we should only find that the hearing was wrongly conducted if we think that the process used went within the range of reasonable response. It would be a breach of the employer's general obligation toward its employees if we were to find that the process used was not one that a reasonable employer could have adopted. We have been guided by the Employment Appeal Tribunal's Decision in Abbey National Plc -v- Fairbrother [2007] IRLR 320."

16. The Tribunal made a significant number of criticisms of the Society. We will summarise the Tribunal's findings as follows.

(1) By sending the transcript of the June interview to Mr Niblett on 10 August the Society was "in breach of the proper procedure". It should have provided the transcript earlier or acceded to his request for a short adjournment. The Tribunal considered this to be a breach of contract (reasons, paragraphs 10 and 15).

(2) Mr Niblett did not have an opportunity to point out the discrepancy between the case summary and the interview note to Mr Bland before he gave his decision on the second day, and that the failure to correctly record the answer given by Mr Niblett at the June interview was "a further breach of contract" (reasons, paragraph 15).

(3) If Mr Niblett had known of the meeting between managers on 14 August he would have been entitled to complain about it "as a breach of contract", because it was improper of Mr Bland to discuss the case with other managers who had not heard the evidence (reasons, paragraph 19).

(4) The disciplinary finding which Mr Bland made was a "different misconduct finding from that which was a subject of the complaint letter". Mr Bland ought to have given Mr Niblett the opportunity to comment on the "lesser offence" and on the proposed penalty. This was a breach of contract (paragraphs 20 and 22).

(5) Having regard to the limited culpability found by Mr Bland it was not within the range of reasonable responses for the Society to find that Mr Niblett was guilty of "major misconduct" and impose a final written warning for it. This was a breach of contract (paragraphs 21 and 22).

(6) Mr Watt, the HR manager, was a party to both the disciplinary and the appeal decisions, actually taking a part in reaching those decisions. The Tribunal rejected the Society's contention that he was only there to advise the managers. His involvement in the decision-making process at each stage constituted two further breaches of contract (paragraph 23).

(7) The appeal was also defective by reason of its limited nature (paragraph 24).

(8) The grievance procedure, which the Tribunal found was contractual, was not limited in the way the Society thought. There was no exclusion for cases involving disciplinary or appeal decisions. On the contrary, a member of staff could complain about any issues including "a policy or procedure that you feel has been applied unfairly". Refusal to provide Mr Niblett with a remedy in respect of his grievance was "clearly a serious breach of contract" on the part of the Society (paragraph 25).

(9) It was wholly unacceptable that Mr Niblett's letter dated 16 December was not answered by the Chief Executive or anyone else (paragraph 26).

(10) The legal department's letter dated 23 January was a most improper letter, and it was not surprising that Mr Niblett took great exception to it (paragraph 27).

17. The Tribunal's overall conclusion was as follows.

"28. We do, however, conclude that the process to which Mr Niblett was subjected from August 2007 until late January 2008 certainly amounted to a breach of the employer's implied duty concerning trust and confidence. We have found that a substantial number of breaches of contract occurred.

29. Some of the breaches were individually so serious that they would have permitted resignation on their own account. Collectively however they certainly showed fundamental breach."

18. The Tribunal went on to find that Mr Niblett had resigned by reason of the breaches and that he had not delayed.

Submissions

19. On behalf of the Society Mr de Silva made the following submissions.
20. Firstly, he submitted that the Tribunal never stated or directed themselves in accordance with the implied term set out in Malik v BCCI [1997] ICR 606. This implied term imposes upon employers an obligation that they will not without reasonable and proper cause conduct themselves in a manner likely to destroy or seriously damage the relationship of trust and confidence between employer and employee. The Tribunal mis-stated this test in paragraph 5 of its reasons, omitting reference to the element of seriousness.
21. Secondly, he submitted that the Tribunal erred in law in holding that it would be a breach of the employer's general obligation towards the employee if the employer adopted a process that no reasonable employer could have adopted. The Tribunal derived this proposition from Abbey National plc v Fairbrother [2007] IRLR 320; but this authority makes it plain that a Tribunal which makes a finding that an employer has behaved in this way must go on to ask whether the conduct complained of was calculated or likely to destroy or seriously damage the relationship of trust and confidence between the parties. Mr de Silva drew attention to the more recent decision of the Appeal Tribunal in Claridge v Daler Rowney Limited [2008] IRLR 672; he submitted that although this authority analyses the implied term differently, it is still necessary for the Tribunal to ask whether the conduct was calculated or likely to destroy or seriously damage the relationship of trust and confidence.
22. Since Mr de Silva made his submissions in this appeal, another Division of the Employment Appeal Tribunal has handed down judgment in in Bournemouth University Higher Education Corporation v Buckland [2009] UKEAT/0492/08, BAILII: [2009] UKEAT 0492_08_0805. That division of the Appeal Tribunal (His Honour Judge Clark presiding) declined to follow Abbey National plc v Fairbrother and Claridge v Daler Rowney Limited. It held, as we understand it, that the "range of reasonable responses" test has no place in determining whether an employer had committed a breach of the implied term of trust and confidence. This is a substantial step further than the submission which Mr de Silva made to us.
23. Thirdly, he submitted that the Tribunal erred in law in failing to consider the process as a whole, rather than separating out each part of the process.
24. Fourthly, he criticised the Tribunal's conclusion that the Society was not entitled to impose a final written warning on Mr Niblett. He submitted that to accept substantial irregular payments for overtime from a non mandated employee without challenge is precisely the sort of conduct which would lead a reasonable employer to impose a serious sanction such as a final warning. He submitted that the Tribunal must have impermissibly substituted its own decision for that of the Society, or else its determination was perverse, or else inadequately reasoned.
25. Mr de Silva took us through the Tribunal's specific criticisms of the Society, which we have already enumerated. He submitted that the Tribunal's erroneous legal approach was demonstrated in the way it dealt with specific issues in the case.
26. On behalf of Mr Niblett Mr Harper accepted that it was essential for the Tribunal to consider whether the conduct of the employer was calculated or likely to destroy or seriously damage the relationship. He accepted that it is not sufficient merely to find that a specific procedure has been operated in a way which no reasonable employer could operate it. He submitted that the Tribunal had the full term in mind, and that an examination of its reasoning does not demonstrate any error of law. He further submitted that the Tribunal was both entitled and bound to look at the different elements of the procedures adopted by the Society, and committed no error of law by doing so. He compared and contrasted the original charge with the charge which the Society found proved; the former pre-supposed activity which was criminal and dishonest; the latter merely acceptance of a payment which had not been authorised without querying it. The Tribunal was entitled, he submitted, to come to the view that the latter charge did not justify a final written warning and that Mr Niblett should have been given an opportunity to address it. He, like Mr de Silva, took us to the individual criticisms which the Tribunal made of the Society, and argued that they were properly reasoned and justified.

Our conclusions

27. The term "constructive dismissal" is used to describe a case where an employee has resigned (whether with or without notice) in circumstances in which he was entitled to terminate his contract of employment without notice to his employer by reason of the employer's conduct: see section 96(1)(c) of the Employment Rights Act 1996.
28. An employee will be entitled to terminate his contract without notice to his employer if and only if the employer is in repudiatory breach of contract: see Western Excavating (ECC) v Sharp [1978] ICR 221.
29. This being the law, the starting point for a Tribunal considering a claim of constructive dismissal is to identify the term or terms of the contract which it is said that the employer has broken. Since a Tribunal has a duty to give reasons for its decision, it is good practice for a Tribunal to set out the contractual terms which it finds to exist and to be relevant to the claim which it has to decide.
30. In many cases the term which will be relied on is the implied term of trust and confidence. This implied term is a reciprocal duty on the part of employer and employee. On the employer's side it imposes an obligation that the employer shall not –

"without reasonable and proper cause, conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee" (Malik v BCCI [1997] ICR 606 at 621D per Lord Steyn)

31. There may, of course, be other relevant terms, express or implied. Occasionally, for example, disciplinary or grievance procedures may be expressly incorporated into the contract of employment. The Tribunal should clearly identify any relevant terms which it has found.
32. Where the term relied on is the implied term of trust and confidence, it will be essential for the Tribunal to make findings as to the conduct of the employer and ask whether the employer has, without reasonable and proper cause, conducted itself in a manner likely to destroy or seriously damage the relationship between employer and employee.
33. It is necessary now to refer to two recent decisions of the Appeal Tribunal which have discussed the application of the implied term of trust and confidence in the context of the operation of grievance procedures. These are Abbey National plc v Fairbrother [2007] IRLR 320 and Claridge v Daler Rowney Limited [2008] IRLR 672. These decisions were the subject of argument and submissions before us. As we have already said, since argument in this appeal another division of the Appeal Tribunal has handed down judgment in Bournemouth University Higher Education Corporation v Buckland [2009] UKEAT/0492/08, BAILII: [2009] UKEAT 0492_08_0805, declining to follow those decisions. We will comment on that development after we have discussed the decisions themselves.
34. First was Abbey National plc v Fairbrother [2007] IRLR 320. Mrs Fairbrother had resigned because her employers had not upheld a grievance which she had presented. The Appeal Tribunal (Lady Smith presiding) sought to give guidance as to the application of the implied term of trust and confidence in this context. The Appeal Tribunal noted that application of the implied term involved asking three questions: (1) what was the conduct of the employer complained of? (2) Did the employer have reasonable and proper cause for that conduct? If so, the employer will not be in breach of the term. (3) Was the conduct complained of calculated to destroy or seriously damage the employer/employee relationship of trust and confidence?
35. In the context of the second of these questions, the Appeal Tribunal said –

"… in a constructive dismissal case involving resignation in the context of a grievance procedure, when asking the second question we have posed above it seems to us that it is not only appropriate but necessary to ask whether the employer's conduct of the grievance procedure was within the band or range of reasonable responses to the grievance presented by the employee. We would add that we are not persuaded that it is appropriate to separate out each part of the grievance procedure to see whether it was reasonably conducted or not. Just as happens when the conduct of a disciplinary hearing procedure falls to be considered (see: Whitbread v Mills), the conduct of a grievance procedure requires to be looked at as a whole. Only if it has been conducted in a manner in which no reasonable employer would have conducted it can it be said that he did not have reasonable and proper cause for his conduct."

36. The second case was Claridge v Daler Rowney Ltd [2008] IRLR 672. Mr Claridge had resigned because his employers had not dealt to his satisfaction with grievances he had presented. The Appeal Tribunal (Elias P presiding) arrived at the same conclusion as the Appeal Tribunal in Abbey National plc v Fairbrother but on a different juridical basis, involving application of the third rather than the second of the Fairbrother questions. The Appeal Tribunal said –

"38. We would suggest that an alternative basis for achieving harmony is to focus on the third limb of the test. It is necessary that the conduct must be calculated to destroy or seriously damage the employment relationship. The employee must be entitled to say 'You have behaved so badly that I should not be expected to have to stay in your employment'. It seems to us that there is no artificiality in saying that an employee should not be able to satisfy that test unless the behaviour is outwith the band of reasonable responses.

39. It is well established that unreasonable conduct alone is not enough to amount to a constructive dismissal: see Western Excavation Ltd v Sharpe [1978] IRLR 27. As that case makes clear it must be unreasonable conduct amounting to a breach of contract, and in this context of the breach of trust and confidence term that means that it should fundamentally undermine the employment relationship. If an employer has acted in a way in which the Tribunal considers a reasonable employer might act, then we would suggest that it cannot be a proper inference that an employee is entitled to say that nonetheless this was so fundamental a breach of the employer's obligations towards him that he should not be expected to remain in employment. Once the tribunal concedes to itself that there may be more than one view as to whether the conduct is sufficiently unreasonable, that undermines its conclusion that the employment relationship has been sufficiently damaged."

37. There is a difference of juridical basis between these two decisions, but this difference in juridical basis would not affect the fundamental questions a Tribunal has to ask. On the basis of Fairbrother and Claridge, where it is alleged that an employer has broken the implied term of trust and confidence in the way a grievance has been handled, whichever juridical basis is adopted, the position will be as follows.

(1) The Tribunal must identify the respects in which the employer's conduct of the grievance procedure is alleged to have broken the implied term.

(2) The Tribunal must consider whether in those respects the employer's conduct of the grievance procedure was reasonable, ie whether it was within the band or range of reasonable responses open to an employer dealing with the grievance. If it was within that band, the employer will not be in breach of the implied term.

(3) Even if the employer's conduct of the grievance procedure in those respects was unreasonable, the Tribunal must still consider whether the employer's conduct was calculated or likely to destroy or seriously damage the relationship of trust and confidence between employer and employee.

38. This third step is distinct from the second step and of essential importance. The implied term of trust and confidence is a reciprocal obligation owed by employer to employee and employee to employer. In employment relationships both employer and employee may from time to time behave unreasonably without being in breach of the implied term. It has never been the law that an employer could summarily terminate the contract of an employee merely because the employee behaved unreasonably in some way. The bar is set much higher: the employee has to be guilty of what is often called gross misconduct. Similar considerations apply the other way. It is not the law that an employee can resign without notice merely because an employer has behaved unreasonably in some respect. In the context of the implied term of trust and confidence, the employer's conduct must be without proper and reasonable cause and must be calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee.
39. Thus, in Malik v BCCI Lord Steyn said –

"Earlier I drew attention to the fact that the implied mutual obligation of trust and confidence applies only where there is 'no reasonable and proper cause' for the employers' conduct, and then only if the conduct is calculated to destroy or seriously damage the relationship of trust and confidence. That circumscribes the potential reach and scope of the implied obligation." ([1997] ICR 606 at 628 G-H)

40. As we turn to the Tribunal's reasoning, there is one other general point to make. In this case the Tribunal applied the "range of reasonable responses" test in the context of a disciplinary procedure. On the basis of Fairbrother and Claridge this would not be erroneous. Provided that the question is whether the operation of a procedure was in breach of the implied term of trust and confidence, it will be relevant for a Tribunal to ask whether the operation of the procedure was reasonable; if it was reasonable the employer will not be in breach of the implied term. But, for reasons which we have explained, that is only one step. Even if the operation of the procedure was unreasonable, it does not necessarily follow that there was a breach of the implied term of trust and confidence.
41. The recent decision of the Appeal Tribunal in Bournemouth University Higher Education Corporation v Buckland [2009] UKEAT/0492/08, BAILII: [2009] UKEAT 0492_08_0805, however, declined to follow Abbey National plc v Fairbrother and Claridge v Daler Rowney Limited. It was held that a Tribunal should apply the Malik test "unvarnished" – by which we understand the Appeal Tribunal to mean that the "range of reasonable responses" test had, in its opinion, no part to play in determining whether there was a breach of the implied obligation of trust and confidence. We will restrict ourselves to two comments on this case.
42. Firstly, the decision in Buckland re-inforces the point which we have made, namely that a Tribunal must always consider the crucial question whether the conduct of an employer is calculated or likely to destroy or seriously damage the relationship of trust and confidence between employer and employee.
43. Secondly, we do not think it is necessary or desirable for us to express any concluded preference for the approach in of Fairbrother and Claridge on the one hand or for the approach in Buckland on the other hand. We have heard no argument on the point and (for reasons which we shall give in a moment) we do not think the issue is determinative of this appeal. We would however say this much. We find it very difficult to envisage circumstances in which an employer will be in breach of the implied term of trust and confidence unless the employer's conduct has been unreasonable. The mere fact of unreasonable conduct is, as we hope we have demonstrated, never sufficient. But if the employer's conduct is reasonable, we find it difficult to see how that conduct can be said to be calculated to destroy or seriously damage the relationship of trust and confidence between employer and employee, still less how it can be said to be without reasonable and proper cause. In determining whether an employer's conduct was reasonable, a Tribunal should always bear in mind that there may be more than one reasonable course to take – for example, when operating a grievance or disciplinary procedure. It is, we think, for these reasons that the Appeal Tribunal in Fairbrother and Claridge referred to a "range of reasonable responses" test. We do not see why it should be wrong for a Tribunal to ask itself whether an employer has acted reasonably or unreasonably, so long as it goes on to ask the fundamental question whether the conduct, even if unreasonable, is calculated to destroy or seriously damage the relationship of trust and confidence between employer and employee.
44. This, to our mind, is where the Tribunal erred in law. The Tribunal was wrong to state, in paragraph 11 of its reasons, that it would be a breach of the employer's general obligation toward its employees if the process used was not one that a reasonable employer could have adopted. The Tribunal cited Abbey National Plc v Fairbrother as authority for this proposition. As we have endeavoured to explain, it is not authority for that proposition. Since this is the Tribunal's error of law, and since the error exists irrespective of the issue debated in Fairbrother, Claridge and Buckland, we do not think we need express any final conclusion on that debate.
45. It seems to us that this error of law pervaded the Tribunal's reasoning. Three instances will suffice.
46. Firstly, the Tribunal found that it was a breach of contract for the Society to give to Mr Niblett a copy of the transcript on the Friday prior to his disciplinary hearing. Speaking for ourselves, we do not see why 2½ days was insufficient time for Mr Niblett, who was a highly paid and intellectually able employee, to digest the transcript prior to the disciplinary hearing; the Tribunal does not indicate why this might be the case. Be that as it may, we are sure the Tribunal must, at this point, have forgotten the question whether any unreasonable conduct on the part of the Society was so serious as to undermine the relationship of trust and confidence between the parties. It is impossible to suppose that provision of a transcript 2 ½ days prior to a disciplinary hearing could of itself be a breach of the implied term of trust and confidence.
47. Secondly, the Tribunal found that it was a breach of contract that the summary had incorrectly recorded what Mr Niblett had said in the interview. Again it is impossible to suppose, absent malice or dishonesty on the part of the Society (which the Tribunal did not find and which seems entirely improbable) that this error could of itself be a breach of the implied term of trust and confidence.
48. Thirdly, the Tribunal found that it was a breach of contract, albeit not one of which Mr Niblett knew, for the managers dealing with different disciplinary hearings arising out of the same investigation to meet and discuss penalties. Nothing in Mr Niblett's contract precluded such discussions. If the purpose of the discussion was to foster consistency of treatment across a range of cases, it is difficult to see why it was objectionable at all. At all events, the Tribunal would need to explain why such discussions were calculated or likely to damage seriously or destroy the relationship of trust and confidence; the Tribunal does not address this question.
49. It will be recalled that the Tribunal, when stating the implied term of trust and confidence in paragraph 3 of its reasons, stated that the employer's obligation was not to do anything which damages or destroys trust and confidence. The Tribunal omitted the requirement that the employer's conduct must seriously damage the relationship of trust and confidence. The examples we have given, and the incorrect reference to Abbey National v Fairbrother, demonstrate to our mind that the Tribunal did not apply the law correctly.
50. The Tribunal referred to the question of seriousness only in paragraphs 3.1 and 29 of its reasons, in the context of the different question whether proven breaches of contract were sufficient to show fundamental breach. If the Tribunal had considered the question whether the Society's conduct seriously damaged or undermined the relationship of trust and confidence, it would not have found a number its criticisms of the Society's procedures to amount in themselves to breaches of contract at all.
51. It is also plain, from the Tribunal's separate findings on different aspects of the disciplinary procedure, such as the two which we have already mentioned, that it did not look at the disciplinary procedure as a whole before reaching its conclusion in respect of individual criticisms as to whether there was a breach of the implied term of trust and confidence: see Abbey National v Fairbrother at paragraph 36.
52. We turn next to the finding of the Tribunal that no reasonable employer could have regarded the conduct of Mr Niblett which was found proven by the Society as amounting to "major misconduct".
53. As we have seen, the Tribunal was itself critical of Mr Niblett's conduct, finding him to have contributed to his own dismissal. Mr Harper sought to distinguish the charge which the Society found proved from the contributory conduct which the Tribunal found established. It seems to us, however, that they are closely linked. The Society said he had accepted the payments (more than £3,600) "without appropriate challenge". The Tribunal found that he had "kept his head down" in a manner unfitting for a senior employee of many years standing.
54. We have not been able to understand why the Tribunal thought that the Society could only categorise Mr Niblett's conduct as "minor misconduct" and could only give an informal or first formal warning. Once granted that the Society was entitled to find that he had knowingly kept £3,600 in circumstances where he ought to have challenged receipt of the payment, some reasoning is required as to why the Tribunal took this view. We are reluctant to say that the Tribunal's conclusion was perverse; but on an issue which was of crucial importance to the case the Tribunal's conclusion required reasoning. At all events, as we have said, the key question for the Tribunal was whether the Society's conduct seriously damaged or destroyed the relationship of trust and confidence. The Tribunal did not address this issue.
55. In these circumstances we are satisfied that the Tribunal erred in law in its approach to the question of constructive dismissal. The appeal must be allowed. It is impossible for this Appeal Tribunal to substitute its own view on the question whether the Society was in repudiatory breach of contract. The proceedings will be remitted for rehearing.
56. The re-hearing will be before a freshly-constituted Tribunal; we think it would be too difficult a task for the previous Tribunal, having made wide-ranging findings of breach of contract on a wrong view of the law, to re-visit the same issues on a different legal basis.
57. We direct that the Tribunal should approach its task entirely afresh. It should make its own findings of fact and reach its own conclusions on the question of constructive unfair dismissal and (if it arises) on the question of contributory conduct.
58. On behalf of the Society, Mr de Silva made criticisms of a number of the Tribunal's individual findings, labelled by the Tribunal as breaches of contract. For reasons which we have explained, the Tribunal's finding that they were individually breaches of contract was based on a wrong view of the law. We do not think it necessary or helpful, in a case which will be remitted to the Tribunal for re-hearing, to discuss each of Mr de Silva's individual criticisms. Suffice it to say that the newly constituted Tribunal should approach its task entirely afresh.