United Kingdom Employment Appeal Tribunal

(1) The Respondent company runs a holiday park called Billing Aquadrome near Northampton.  Part of the business of the park involves the sale of caravans.  The Appellant was employed as a Sales Manager in July 2005.  Under his contract of employment he had the opportunity to earn what could be large sums by way of commission. 

(2) In 2006 the ownership of the company changed.  Although we do not know the details, the new owners were apparently concerned at the level of the Appellant’s commission. 

(3) At the beginning of 2007 there was a dispute about the commission terms to apply for the year beginning 1 February.  The issue was handled by the Respondent’s Operations Director, Mr Dawson.  The Appellant met his immediate manager, Mr Calvesbert, on 2 February.  He was excited and expressed himself forcefully.  He used language which suggested that, to put it no higher, he was considering resignation.  At Mr Calvesbert’s suggestion he spoke on the telephone to an HR consultant who worked for the Respondent called Mrs Drake: she advised him, in effect, not to act precipitately.  He said that he would be speaking to his solicitors.  The Respondent’s case was that the Appellant resigned at that meeting; but, as will appear, the Tribunal found that he had not gone so far. 

(4) Mr Calvesbert phoned Mr Dawson and told him that the Appellant “had resigned”; but it follows from the Tribunal’s findings that that was an overstatement, and in fact he also told Mr Dawson that he was not clear whether the Appellant would be coming in the next day.

(5) The Appellant did in fact come to work the following day. On 4 February, a Sunday, he again came into work.  There was a further conversation between him and Mr Calvesbert.  He again expressed himself strongly, and it is common ground that there was, again, talk of resignation (though there was a dispute as to who said what).  It was his (primary) case that he was dismissed by Mr Calvesbert at that meeting, who treated him (wrongly) as having resigned.  The Respondent denied that.  It said that what happened was that the Appellant confirmed his previous resignation.  (Mr Calvesbert’s evidence, though the Tribunal does not expressly refer to it, was that the Appellant had said “I am not fucking working for those bastards any more”.)  Following that conversation the Appellant left the park, accompanied to the gate by Mr Calvesbert, on the basis that he would not be coming back and that his solicitors would be writing to the Respondent. 

(6) Mr Calvesbert reported to Mr Dawson what had occurred.  At a board meeting on 6 February 2007, attended by Mr Dawson, it was minuted that “John MacKenzie is possibly resigning”.  The “possibly” is difficult to reconcile with the Respondent’s case that he had already unequivocally resigned, but the note was not made by Mr Dawson, still less Mr Calvesbert; and Mr Dawson’s evidence was that the language reflected the fact that nothing had yet been heard from the Appellant’s solicitors.

(7) On 7 February 2007 the Appellant’s solicitors, Shoosmiths, wrote to the Respondent.  The letter set out his grievance about proposed changes to his bonus entitlement.  It then said this:

“In our view the Company has acted in breach of its duty of mutual trust and confidence towards Mr Mackenzie.  By failing to carry out any consultation or notification process in relation to the proposed amendments to the bonus scheme, it has failed to follow a fair procedure for any contractual variation.  Further, we have been informed by our client that Paul Calvesbert was instructed by you to escort our client off the premises on Sunday 4 February despite the fact that our client made it clear to the Company on several occasions that he had not resigned.  We have advised our client that this treatment of him amounts to a dismissal and as such will be an automatic unfair dismissal as you have failed to comply with the Statutory Dismissal Procedure.”

After making various other points the letter referred to the Appellant’s “constructive unfair dismissal and contract claims” and invited settlement proposals.  It will be noted that although Shoosmiths clearly assert that the Appellant has been dismissed, the letter is ambiguous about how the dismissal is said to have occurred.  Although the claim is described as being one of “constructive” unfair dismissal, the paragraph which we have quoted states that the Appellant had not resigned and appears, rather, to assert an actual dismissal by conduct. 

(8) On 9 February the Respondent’s solicitors, DLA Piper, replied.  Mr Dawson told the Tribunal that he had seen and approved their letter before it was sent, though the letter itself says that there were some matters on which his further instructions were required.  The letter states that the Appellant had “resigned unequivocally” on 2 February and “confirmed his resignation” on 4 February, saying that he would be “contacting his lawyers about his letter of resignation”.  The reference to the Appellant saying that his lawyers would be writing might, in isolation, suggest only a threatened resignation; but the passage as a whole makes clear that DLA Piper are saying that the Appellant had definitively resigned, so that any letter would only be confirmatory.  Likewise, in theory any resignation might have been on notice, but the letter continues “For [the Respondent’s] record purposes [the Appellant’s] last day of employment was 4 February 2007”: that necessarily implies that the resignation was understood to have been with immediate effect.  Thus, in short, DLA Piper as well as Shoosmiths were plainly treating the Appellant’s employment as having come to an end on 4 February.  (In this connection we note also that they offered to operate the modified statutory grievance procedure under the Employment Act 2002, which only applies where an employment has been terminated.)

(9) The Appellant was paid his salary up to 4 March 2007.  It does not appear that any explicit statement was made to him about the basis on which that was done, and it appears inconsistent with the Respondent’s position, as stated by DLA Piper, that he had resigned with effect from 4 February.  However, at some point in the succeeding weeks the Respondent seems to have thought that the Appellant should be treated as if he had given one month’s notice; and the payment of salary to 4 March would make sense on that basis.

(1) At paragraph 14 the Appellant gives his account of the meeting of 2 February.  He says he was asked if he was resigning and said he would have to speak to his solicitor.  Paragraph 15 reads:

“The claimant returned to work following this meeting and worked the weekend as normal.  On Sunday 4 February, Mr Calvesbert arrived at Billing Aquadrome and asked the Claimant if his position remained the same as it was on Friday.  The Claimant confirmed to Mr Calvesbert that he believed that the change to the scheme amounted to a fundamental breach of his contract of employment and he was not willing to accept it.  Mr Calvesbert mentioned the word resignation and the Claimant told him not to use that word as it was something he had not mentioned.  Mr Calvesbert asked the Claimant to hand over his keys and leave the premises when he had completed the paperwork he was doing as it would not suit the Respondent to have incomplete paperwork following the termination of the Claimant’s employment.”

(2) That paragraph does not plead in so many words that Mr Calvesbert’s conduct on 4 February constituted a dismissal, but that is plainly what is intended: the following paragraph begins by pleading that the Appellant “was shocked that his employment had been terminated by Mr Calvesbert”. 

(3) Consistently with that pleading, the Appellant gives the date of termination of his employment as 4 February.

(4) After pleading additional facts and formally asserting claims for unfair dismissal by reference to sections 98, 98A and 103A of the Employments Rights Act 1996, the Appellant pleads, at paragraph 22:

“Further, or in the alternative, whilst the Claimant is clear that he did not resign and was dismissed, the Claimant asserts that the change to his bonus scheme which was carried out with no consultation or notification amounted to a fundamental breach of his contract of employment which would have entitled the Claimant to treat himself as having been unfairly dismissed by the Respondent.”

(5) Thus the Appellant’s primary claim was plainly of an actual dismissal (albeit, perhaps, by conduct – by wrongly treating him as having resigned – rather than as a result of any express words of dismissal).  But paragraph 22 appears to be intended to raise by way of fallback a claim of constructive dismissal.  It is true that there is no explicit pleading that, if the Appellant – contrary to his case – did resign, he did so in response to the fundamental breach pleaded, but it can reasonably be inferred that that is intended.  Nor is it said when any such resignation occurred, but the reasonable inference is that it was on the pleaded date of dismissal, i.e. 4 February.

“On Friday 2 February 2007, the claimant advised Mr Calvesbert that he was resigning.  He said he was consulting his lawyer.  Mr Calvesbert told him he should go through proper channels.  On Sunday 4 February 2007 the claimant confirmed to Mr Calvesbert that he was resigning and that the letter would arrive from his solicitor the next day.  Given that he had told the respondent the fact that he was resigning, the respondent decided that to protect the business he would not be required to work his notice period and he left the site and was paid for the following month while not required to work.”

Presumably on the basis, implicit in that pleading, that the Appellant was to be treated as having given one month’s notice of resignation, the date that the employment ended is given in the ET3 as 4 March (which is consistent with the Appellant having been paid to that date).  Paragraph 21 of the ET3 reads as follows:

“If, which is denied it is found that the claimant was dismissed then the respondent contends that the dismissal was fair for some other substantial reason in that the claimant had repeatedly told the respondent that he was resigning, that he was advised to do so by his solicitor and that he no longer wished to work for the company leading to an irretrievable breakdown of trust and confidence between claimant and respondent.”

(1)            At paragraph 2 the Tribunal recorded that Mr Green had made it clear that his primary case was that this was a case of “de facto dismissal” of the Appellant by Mr Calvesbert “on or about 4 February 2007”.  However, Mr Green had also made it clear that if necessary he would argue that the Appellant was constructively dismissed on that day.  That of course reflects the Appellant’s pleaded case.

(2)            At paragraph 3 the Tribunal said that it was unnecessary to set out the history of the dispute about commission (to which it referred as “bonus”); but it recorded a general finding in the following terms:

“It will suffice to say that dating back to March 2006 when the present owners took over the Company they made attempts to avoid paying the Claimant bonus that he was owed from a period prior to their ownership and seeking to impose upon him in terms of future earnings a scheme of payment that was considerably lower than he had enjoyed previously and with sales targets which they now admit were impossible to achieve.  Albeit obiter in the light of our decision we make this reference by way of background and note that the Respondents did conduct themselves in a manner likely to damage trust and confidence.”

(3)            At paragraphs 4 and 5 the Tribunal dealt with the events of 2 February.  The findings are quite short and not perfectly clear, but what they boil down to is that the Appellant became very excited and used language which at least threatened resignation; but that in all the circumstances he was not to be treated as having resigned there and then and the Respondent did not treat him as having done so.  He did, of course, as we have said, come in to work on the following two days.

(4)            At paragraph 6 the Tribunal recorded, very briefly, the evidence of the protagonists about the events of 4 February, which corresponded to the pleaded cases as we have set them out.  It did not, however, make any findings as to whose account it preferred. 

(5)            The Tribunal’s conclusions are at paragraphs 7 and 8.  They read as follows:

“Conclusions:  Constructive dismissal is a concept which contains elements of determination and causation.  It is for the claimant to discharge his burden of proof by showing that he resigned because of either a present or anticipated fundamental breach of his contract.  It is a concept that requires him to exercise a choice either to acquiesce to the breach or act upon it.  The Claimant has stridently argued throughout that he did not resign and has called evidence to support that contention.  The evidential requirements of the concept are not satisfied by the presence of a fundamental breach and a termination of the employment alone.  Causation is a quintessential element and the claimant in order to succeed must be able to say I resigned and I did so because of my employer’s fundamental breach.  This is not evidence that the Claimant could plausibly give in the face of his denial of resignation and it is not before us.  The Claimant has not discharged the burden of proving that he was constructively dismissed.”

“1) The Appeal be allowed

2) The Employment Tribunal’s finding of no unfair dismissal (including its findings that there was no dismissal at all) be set aside

3) The case be remitted to the same Employment Tribunal for reconsideration and determination, including the determination of the issues in the Schedule to this order, in the light of and having regard to the judgment in this case

4) The Tribunal to call for such further evidence or submissions as it may require to reconsider and determine the case as aforesaid

5) There be a transcript of the judgment

6) The hearing for the reconsideration and determination by the Tribunal be expedited”

The schedule reproduced counsel’s draft. It is headed “Issues to be decided by Employment Tribunal on remission”.  It reads:

“(A) What happened and what was said and done by the Claimant and Respondent, so far as material, on:

(1)          2^nd February; and

(2)          4^th February 2007?

(B) Looking at the events on the basis of the above findings, objectively:-

(1)         How and when the Claimant’s employment terminated; and in particular, whether by dismissal (under s. 95(1)(a)) or by resignation?

(2)         If the Claimant resigned, whether his resignation flowed from a fundamental breach of contract by the Respondent such that he was constructively dismissed under s. 95(1)(c)?

(3)         What was the reason (or, if more than one, the principal reason) for dismissal?

(C) The parties being agreed that any dismissal under s. 95(1) that the Tribunal may find would be unfair under s. 98:-

(1)         Whether Claimant was also dismissed unfairly under s.103A?

(2)         All issues as to remedy.”

(1) The reference in para. (4) of the order to the Tribunal “calling for further evidence” is inapposite: it is for the parties to decide what evidence they wish to adduce.  But it is in truth perfectly clear what was meant, namely that if the parties believed that any evidence should be called, i.e. over and above the evidence at the first hearing, the Tribunal should admit such evidence if it thought appropriate.

(2) The requirement of para. (A) (1) of the schedule that the Tribunal decide what happened on 2 February was arguably redundant, since it had already made findings which the Appeal Tribunal had not questioned.  But it could be said to be undesirable for the Tribunal to make findings about the events of 4 February without re-establishing the jumping-off point of the earlier meeting.

(3) The “how and when” language of para. (B) (1) of the Schedule was arguably unnecessarily general, since Judge Ansell’s judgment made it clear that the only “when” in the frame was 4 February.

We acknowledge these imperfections because, as will appear, the Employment Tribunal was troubled by them; but in truth they are not of great significance. 

“At its highest (and we can go no further in the absence of a verbatim account) the Claimant expressed a future intention to resign that would either follow upon or perhaps be effected by a letter from his solicitors the following week.  The Claimant in [his witness statement] puts it lower than that and states that he made it clear that he had taken the advise proffered by Mrs Drake and Mr Calvesbert and would pursue his concerns in writing.  It is trite law (e.g. Ely v YKK Fasteners (UK) Ltd [1993] IRLR 500 CA) that expression of intention to resign at a future point will not in law amount to a resignation.”

“16. We turn then to the only other point pertinent to dismissal namely whether there was a de facto dismissal two days later on the 4th February 2007. By this time the earlier uncertainty about whether the Claimant would continue to report for work was resolved and Mr Calvesbert telephoned Mr Dawson and informed him that the Claimant had worked all day on the 3rd of February and was at his post at the present time. Mr Calvesbert informed him that he had reported the Claimant's resignation to the previous morning [sic]. However he then instructed Mr Calvesbert to check the Claimant's position.  He was not, as he has told us, surprised to see him at work as he had advised the Claimant to come to work as normal and to see if his differences could be resolved by discussion with Mr Dawson and because the Claimant had been advised by Mrs Drake that he should give notice.  He asked the Claimant if his position was the same as it had been on Friday and the Claimant replied that he wished to resign and would ensure that Mr Calvesbert had a letter from his solicitors the following Monday.  Following a further telephone conversation with Mr Dawson Mr Calvesbert told the Claimant that he should leave the park. No express words of dismissal were used and it is evident from the account of the conversation between Mr Dawson and Mr Calvesbert that Mr Dawson was seized of the view that the Claimant had resigned.  The actual words that Mr Calvesbert used to the Claimant were that he was not suspended, he remained on full pay and that someone would be in touch once the Respondents had the letter from his solicitors.  We have reminded ourselves of the rule laid down by the Divisional Court in Morton v Sundour Fabrics Ltd v Shaw (1967) ITR 84 and followed strictly by the EAT in Burton v Smith (1977) IRLR 351 that the failure of an employer to specify the date upon which an employment will end or give information from which it can be ascertained is fatal to a valid notice of dismissal.  The approach we must take is essentially the same as we should take in the event of ambiguous resignation. We are to take an objective view and pose for ourselves the question of whether a reasonable employee would interpret the words and/or conduct as a dismissal.  We have concluded that no reasonable employee could have concluded from these words that he was being dismissed at that point and we find as a fact for reasons we set out later that Mr Mackenzie did not form this conclusion.  We do not accept that he was formally escorted from the premises and prefer Mr Calvesbert's evidence that he may have strolled to the gate with him.  In his evidence in chief the Claimant places reliance on the board minutes to inform his belief.  They were not available to him at the time (or indeed as we understand it prior to disclosure) and could not have influenced his understanding of the exchange.  He has not prior to the present hearing expressly stated that he construed the conversation as a dismissal and the promised letter from his Solicitors informs the situation [sic] is at P213 of our original bundle.  It indicates that the author's firm has been instructed by Mr Mackenzie in relation to the proposed amendment to the terms of his bonus arrangement.  At the time in question the proposed alterations were to the forthcoming period's bonus not the past and thus it is difficult to see consistency with this indication and an employment that had terminated.  In the fifth paragraph of the second page they refer to their client's version of events of the 4th of February 2007 namely that allegation that Mr Calvesbert escorted the Claimant off the premises and state as follows 'We have advised our client that this treatment amounts to a dismissal'.  Thus it would seem that the Claimant achieved his belief in dismissal from his solicitors and not the words and conduct of the Respondent.  Further confusion is manifested by the last paragraph on that page which states that the author is instructed by Mr Mackenzie to bring a claim in the Tribunal or the High Court for constructive dismissal and contract claims.  At P216 of the same bundle we see the reply from the Respondent's Solicitors which discloses the fact that they were not at that point fully instructed since Mr Dawson was away and (incorrectly) stating that the Claimant had unequivocally resigned on the 2nd February 2007.  Whether it is because of privilege, because there are proceedings elsewhere or mere oversight we do not know but further exchanges have not been put before us.

17. It is evident that the distinction between actual resignation and an expressed intention to resign has been lost on the Respondents.  Mr Dawson had no direct knowledge of what the Claimant had said and relied solely on Mr Calvesbert's account.  We have no doubt that he was seized of the belief that the Claimant had resigned or was in the throes of so doing.  The Respondents reasonably believed from the Claimant’s own assertion that they would receive a letter from the Claimant's Solicitors giving certainty to the situation.  There is no evidence before us from which we can conclude that they acted upon this belief to terminate the contract of employment.  The evidence is wholly consistent with a finding that they were content to wait for the perceived resignation to take its course and were intent upon paying the Claimant his full remuneration whilst it did so.  There is no evidence that disturbs their stated position to await the Claimant's Solicitor's letter.

18. The case before us requires us to determine whether the Claimant was dismissed as alleged on the 4 February 2007.  In the course of addressing that question we have determined that there was not a resignation on the 2nd February 2007.  The parties for undisclosed reasons are anxious for us to go further and determine when the contract terminated and indeed it appears that in reliance on the assumption that it ended on or around the 4th February 2007 the EAT indicate that we should be able to do so. We are unable to comply; it seems probable that the termination and the circumstances of it occurred sometime after the 4^th and since the matter appears to have fallen into the hands of the parties' solicitors it is likely therefore that the answer lies in that correspondence.  It is often the case that the early exchanges in potential litigation owe more to tactical posturing than accuracy but even taking account of that the Claimant's solicitors letter is contradictory in its terms and defies a clear understanding and the Respondent's Solicitor's rejoinder is, on its own admission, incomplete and made in the absence of full instructions.  An understanding of what transpired beyond that point is denied us since the parties have not put the evidence before us.  That is not in our view detrimental to our ability to give our judgment since what passed between the parties after the 4th of February 2007 is outside the remit of this case.  There is evidence of confusion and mistake in this case but ultimately the burden of proving dismissal rests with the Claimant.  He has not satisfied us on a balance of probabilities that there was a de facto dismissal on the 4^th February 2007 and we accord with him in finding that he did not resign his employment on the 2nd of February 2007.  The burden rests with him and since it is not discharged we must dismiss this claim.”

(a) to find that that resignation was in response to the proposed changes in his commission terms; and

(b) to find, on the basis of paragraph 3 of the Reasons for the Tribunal’s first decision (see paragraph 7 (2) above), that those proposed changes amounted to a fundamental breach of contract entitling the Appellant to resign and claim constructive dismissal. 

Mr Northall, by contrast, contended that if the appeal were allowed the only just course would be for all the issues to be heard again from the start.  He submitted that the Tribunal’s reasoning at paragraph 3 was inadequate and that once the question of breach was open it was impossible to hive off the other issues.