THE INDUSTRIAL TRIBUNALS

CASE REF:  477/07

CLAIMANT:			Seana Lynn

RESPONDENT:		Rio & Brazil Ltd

DECISION

The unanimous decision of the tribunal is that the claimant was unfairly dismissed and the respondent is hereby ordered to pay to the claimant the sum of £1,640 by way of compensation for unfair dismissal.

Constitution of Tribunal:

Chairman:		Ms Turkington

Members:		Mr Black
Mr Kearns

Appearances:

The claimant appeared and represented herself assisted by Mr and Mrs Lynn.

The respondent appeared and was represented by Ms S Baillie, Solicitor of Harrisons, Solicitors.

The Claim 

 1.	The claim was a claim of constructive unfair dismissal. 

The Correct Respondent

 2.	The parties agreed that the correct respondent to this claim is Rio & Brazil Ltd.

The Issues

 3.	The issues to be determined by the tribunal were:-
 
(a)	whether the claimant had terminated her contract in circumstances where she was entitled to terminate it without notice by reason of the respondent’s conduct, in other words, whether the claimant had been constructively dismissed pursuant to Article 127 (1) (c) of the Employment Rights (Northern Ireland) Order 1996 (“the Order”); and

(b)	whether the dismissal was, in all the circumstances, fair or unfair; and

(c)	in the event that the tribunal found the claimant had been constructively dismissed and the dismissal was unfair in all the circumstances, the compensation to be awarded to the claimant.  The claimant confirmed that she did not seek reinstatement or re-engagement.

Sources of Evidence

 4.	The tribunal heard evidence from the claimant and from Mr Paul Jamison on behalf of the respondent.

 5.	The tribunal was also referred to and considered a number of documents in the bundles produced by the claimant and the respondent’s solicitor.

Contentions of the Parties

 6.	In summary, the claimant contended that she had been forced to resign from the respondent’s employment as a result of a series of actions by the respondent, including unjustified and unfair disciplinary proceedings against her.  The claimant contended that these actions culminated in the removal of her managerial duties and responsibilities in early January 2007.

 7.	The solicitor for the respondent, Ms Baillie, argued that the respondent had acted reasonably and in accordance with the respondent’s policies and procedures.  The respondent conceded that various procedures had been changed when the claimant returned to work in January 2007, but contended this was not unfair and the respondent had good reason to speak to the claimant about various matters, including the state of the shop floor.

Facts of the Case

Having heard the evidence of the witnesses and having considered the documents referred to in evidence, the tribunal found the following relevant facts:-

 8.	The claimant was employed by the respondent from 20th January 2003 to 22nd January 2007, initially as a sales assistant.  The claimant was later promoted to the post of temporary Manager of the respondent’s shop known as Brazil and located in Donegall Arcade, Belfast.  Until the end of December 2006, the claimant had complete managerial responsibility for the shop.

 9.	During the course of her employment prior to December 2006, the claimant raised various complaints in correspondence to the respondent.

10.	Upon the claimant’s return to work on the morning of 27th December 2006, following the Christmas break, the Managing Director of the respondent Mr David Simpson asked to speak to the claimant.  He gave the claimant no prior indication of what he wanted to speak to her about and she was not given the opportunity to be accompanied.  Mr Simpson took the claimant to the office at the rear of the shop premises.  He accused the claimant of stealing stock from him.  During this meeting, Mr Simpson behaved in an angry and aggressive manner.  The claimant strenuously denied the allegation of theft, but she was very shocked and upset. 

11.	In the course of this meeting, Mr Simpson removed the claimant’s keys from her and told her that he could not have the claimant working for him.  He also said the claimant should get a job elsewhere.  Having spoken to his solicitor on the telephone, Mr Simpson returned to the meeting and suspended the claimant.

12.	The claimant left the meeting in a distraught state and had to be collected from the shop.  Before the claimant left the premises, Mr Simpson handed the claimant a letter informing her that the respondent was considering dismissing her for allegedly removing goods from the shop without permission.  Since there is no printer on the shop premises, the tribunal is satisfied that this letter was prepared before the meeting and that Mr Simpson had therefore decided that the claimant had a case to answer before he had spoken to her or given her any opportunity to answer the allegation.  Mr Simpson’s letter invited the claimant to a further meeting two days later on 29th December 2006.

13.	The claimant requested a postponement of the disciplinary meeting to enable her to properly prepare her case and to arrange suitable representation.  Mr Simpson agreed to re-arrange the meeting for 5th January 2007.

14.	The claimant’s “hold rail”, that is the rail of items she had effectively reserved for herself, was removed prior to the meeting on 5th January 2007.

15.	At the re-arranged meeting, the claimant was accompanied by the Assistant Manager of the shop Ms Fiona Gallagher who also acted as a witness for the claimant.  Mr Paul Jamison acted as a witness for Mr Simpson.  Both Ms Gallagher and Mr Jamison took notes during the meeting.  Ms Gallagher confirmed that she had been aware that the claimant had taken an item from the shop on “appro” and that she had over-looked writing the details into the relevant book.

16.	Accordingly, the allegation that the claimant had removed stock without permission was withdrawn, but the claimant was instead issued with a written warning for removing a garment from the shop without completing the necessary paper work.  Mr Simpson invited the claimant to return to work and she accepted.

17.	The claimant appealed the decision to issue her with a written warning, but this appeal was never heard.

18.	Initially, the respondent withheld the claimant’s pay for the period of the claimant’s suspension between the original date for the disciplinary meeting, that is 29th December 2006 and the date of the re-arranged meeting, that is 5th January 2007.  The claimant eventually received payment for this period after she raised a complaint about her pay being withheld.

19.	The claimant returned to work on Saturday 6th January 2007.  When the claimant returned, she found that many procedures and work practices had been changed.  She was informed by Mr Jamison the manager of the Rio shop next door that “everything had to go through him”.  The claimant’s responsibilities in relation to staff sales and other managerial duties were removed from her.  The claimant found this very demeaning.

20.	The claimant’s last day at work was Monday 8th January 2007.  After that, the claimant submitted a medical certificate followed by a further certificate submitted on 22nd January 2007.

21.	The claimant submitted her letter of resignation on 22nd January 2007 stating that the respondent’s treatment to her had made her position untenable.

22.	The claimant obtained alternative employment commencing on 5th February 2007 at a higher rate of pay.  The claimant lost one week’s pay between termination of her employment with the respondent and commencing in her new employment.

Statement of Law

23.	By Article 127 (1) (c) of the Order, a resignation by an employee can, in defined circumstances, constitute a dismissal by the employer.  This is generally known as constructive dismissal.  Article 127 (1) (c) of the Order states as follows:-

“(1) For the purposes of this Part an employee is dismissed by his employer if …….

(c) the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer’s conduct.”

24.	Harvey on Industrial Relations and Employment Law at Div DI 3 para 403 states as follows:-

“In order for the employee to be able to claim constructive dismissal, four conditions must be met:

1.	There must be a breach of contract by the employer.  This may be either an actual breach or an anticipatory breach - see Western Excavating (ECC) Ltd v Sharp 1978 IRLR 27.

2.	That breach must be sufficiently important to justify the employee resigning,
or else it must be the last in a series of incidents which justify his leaving.

3.	He must leave in response to the breach and not for some other,
 unconnected reason.

4.	He must not delay too long in terminating the contract in response to the
employer's breach, otherwise he may be deemed to have waived the breach
and agreed to vary the contract.”
25.	It is an implied term of every contract of employment that the employer must not without reasonable and proper cause conduct themselves in a manner calculated to destroy or seriously damage the relationship of mutual trust and confidence between employer and employee – see Woods v WM Car Services (Peterborough) Ltd 1983 IRLR 413 & Malik v BCCI HL 1997 IRLR 462.  This is generally known as the implied duty of trust and confidence.  

26.	In the case of Fyfe & McGrouther Ltd v Byrne 19777 IRLR 29, the EAT held that there was a breach of the implied duty of trust and confidence and that the employee had been constructively dismissed where the employer “had indicated in the clearest terms that they no longer had any confidence in him or his honesty and it is not unreasonable that he should consider that by adopting this attitude in a situation for which he was not responsible they had destroyed any basis of confidence that could ever exist between them and him in the future”.  This principle was applied by the EAT once again in the case of Robinson v Crompton Parkinson Ltd 1978 IRLR 61 in a case where the employer had made an unjustified accusation of theft against the employee.  The EAT held in the Robinson case that the implied duty of trust and confidence had been breached and the employee had been constructively dismissed.
27.	A breach of the implied duty of trust and confidence always amounts to a fundamental breach of contract and will entitle the employee to resign in response to that breach – Morrow v Safeway Stores plc 2002 IRLR 9.
28.	If a tribunal is satisfied that an employee was constructively dismissed by the employer, it must then go on to consider the reason for the dismissal and whether the dismissal was, in all the circumstances, fair or unfair in accordance with Article 130 of the Order – see Stephenson & Co (Oxford) Ltd v Austin [1990] ICR 609, EAT.
29.	By Article 130(1) of the Order, it is for the employer to show the reason for the dismissal and that it is a reason falling within para (2), that is a potentially fair reason for dismissal.  Where the employer fails to show a potentially fair reason for dismissal, the dismissal will be unfair.

Conclusions

30.	The tribunal considered in turn each of the elements of constructive dismissal as set out at para 24 above.  

31.	In respect of the first element, the tribunal concluded that there was in this case a breach of contract by the employer, namely a breach of the implied duty of trust and confidence referred to at para 25 above.  The claimant held a managerial position with the respondent.  Prior to the disciplinary proceedings in December 2006 when she was wrongly accused of theft, the claimant held complete management responsibility for her own shop.  Following her return to work in January 2007, the situation was entirely changed and many of the claimant’s managerial responsibilities had been removed from her. The claimant was told that “everything had to go through” Mr Jamison.  In effect, the respondent seriously undermined her position as manager of her shop.  Despite the respondent’s acceptance following the disciplinary meeting that the claimant had not been guilty of theft, the tribunal considers it is clear from the respondent’s conduct after the claimant’s return to work that it no longer had the necessary confidence in the claimant as temporary manager of the shop.  The tribunal is of the view that the position in this case is very much as described in the cases of Fyfe & McGrouther and Robinson referred to at para 26 above.  In the circumstances, the tribunal was left in no doubt that the respondent conducted itself in a manner calculated to seriously damage the relationship of mutual trust and confidence between the parties and thus committed a fundamental breach of the claimant’s contract of employment.

32.	The tribunal was further satisfied that the respondent’s breach of the implied duty of trust and confidence was sufficiently serious to justify the claimant in resigning – see the case of Morrow as referred to at para 27 above.            

33.	Having considered the claimant’s letter of resignation and the evidence given by the claimant, the tribunal has concluded that the claimant resigned in response to the respondent’s breach and not for some other, unrelated reason.

34.	Finally, in this case, the claimant resigned on 22nd January 2007 just two weeks after her return to work on 6th January 2007.  The tribunal was therefore satisfied that the claimant acted promptly in resigning in response to the respondent’s breach.

35.	Since all four elements of constructive dismissal were found to be satisfied in this case, the tribunal therefore concluded that the claimant was constructively dismissed.  

36.	The tribunal then proceeded to consider the issue of fairness in accordance with Article 130 of the Order.  On this point, the tribunal concluded that the respondent had not shown any reason for the (constructive) dismissal of the claimant which was a potentially fair reason.  The respondent had also entirely failed to follow any fair procedure.  Accordingly, the tribunal concluded that the constructive dismissal of the claimant was unfair.

Compensation

37.	Having determined that the claimant was unfairly dismissed, the tribunal went on to consider the appropriate remedy.  The claimant did not seek either reinstatement or re-engagement.  The tribunal considers that the appropriate compensation in this case in accordance with Article 152 to 158 of the Order is as follows:-

(A)	Basic Award
£290  x  4  =  £1,160

(B)	Compensatory Award
Immediate Loss
One week’s net pay  =  £230

Loss of statutory rights
£250

Total monetary award (A) + (B)  =  £1,640

Prescribed element                      =  NIL

The tribunal considers that a reduction for contributory fault is not appropriate in this case.  Accordingly, the tribunal hereby orders the respondent to pay to the claimant compensation in the sum of £1,640.

This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland).

Chairman:

Date and place of hearing:	16th August 2007, Belfast.

Date decision recorded in register and issued to parties: