Appeal No. EAT/160/00

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 8 June 2001

Before
HIS HONOUR JUDGE PETER CLARK
MR J HOUGHAM CBE
MR N D WILLIS

MISS SARAH DUMMETT	APPELLANT

AMERICAN EXPRESS SERVICES EUROPE LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	IAN WILSON
Solicitor
Messrs Dean Wilson Laing
Solicitors
96 Church Street
Brighton BN1 1UJ	
For the Respondent	EMMA SMITH
(of Counsel)
Instructed by:
Messrs Latham & Co
Solicitors
15 High Street
Melton Mowbray
Leicestershire LE13 OTX	

JUDGE PETER CLARK

1	This is an appeal by Miss Sarah Dummett, the Applicant before the Brighton Employment Tribunal, against that Tribunal’s majority decision, promulgated with Extended Reasons on 7 January 2000, that she was not dismissed by the Respondent, American Express Services Europe Ltd, and consequently that her claims for unfair dismissal and breach of contract, namely non-payment of a contractual redundancy payment, failed.  

The facts
2	The Appellant was employed by the Respondent from 25 June 1985 until 11 June 1999.  In the summer of 1998 she worked as a personal assistant to a senior manager, Mr Laterzo at the Respondent’s office at Portland House, Victoria, London SW1.  She lived in Brighton.

3	The Respondent operated a scheme, which had contractual force, permitting long-serving employees to take paid sabbatical leave.  The relevant provisions in the employee handbook, incorporated into the contract of employment were as follows:
“Employees taking Sabbaticals for three months (12 weeks) or more will be re-engaged in a comparable position and location.”

Comparable position was defined as
“A mutually acceptable role that takes into consideration the grade, salary, location performance, skill and experience of the employee.”

4	That provision is to be contrasted with sabbaticals of three months or less.  In that case the employee was promised reinstatement in his or her same position.  

5	The Appellant applied for and was granted six months sabbatical leave to work for a charity in Brighton.  That leave commenced in September and was due to expire on 14 March 1999.  

6	During her absence Mr Laterzo was replaced by another manager whose personal assistant moved with him.  Thus reinstatement in her old post was blocked.  

7	On 29 January 1999 the Appellant met with the Human Resources Director, Ms Reeves to discuss her return to work.  At that stage the Appellant was toying with the idea of seeking a permanent position with the organisation to which she had been seconded.  However, she was concerned as to the clawback position if she did not return to the Respondent.  She was obliged under her contract to repay 50% of her salary received during the sabbatical.  The Respondent was prepared to waive that requirement, a generous gesture so the Tribunal found, but in the event the Appellant decided to return to the Respondent for financial reasons.  The charity paid a much lower salary than did the Respondent.  

8	Following the end of her break the Appellant took a week’s holiday.  On 22 March there were no personal assistant jobs available, either in London or Sussex.  She was immediately taken back by the Respondent, on a comparable salary and other benefits, on a temporary assignment to assist a manager, Mr Lindh at the Victoria office.  It was a job which did not match her skills and experience, but no more suitable post was then available.  

9	The Appellant was dissatisfied.  She felt that she was entitled to a personal assistant job, comparable to that which she had before going on leave, from the outset of her re-engagement.  

The Tribunal found that the Respondent made every effort to find her a suitable position, whilst preserving her other benefits.

10	In April she asked to work from the Respondent’s Burgess Hill office.  That was arranged.  

11	On 19 April her solicitor wrote to the then Human Resources Director, Ms Macleod, complaining of breach of contract.  It was there asserted that the Appellant was entitled to a comparable job from the end of her leave period.  It had not been provided.  The letter, marked “Without Prejudice”, concluded:
“As you have not been able to honour the Contract and provide our client with a comparable position, which is mutually acceptable, our client is clearly redundant.  
Our client is hopeful that this situation may be resolved amicably without the need for her to resort to either an Employment Tribunal or the County Court but we are bound to say that unless we have your agreement that she receives her proper entitlement to redundancy pay as outlined in the Handbook in Part 5 together with appropriate notice such proceedings will be issued after fourteen days from the date of this letter. 
This letter is deliberately written without prejudice at this stage in the hope that agreement can be reached but if it is not then a major part of this letter will be written to you again as an open letter before action. 
We expect to hear from you within ten days of the date of this letter.”

On 10 May the Respondent wrote to the Appellant offering her a permanent position as personal assistant to a senior manager, Mr Edwards, at Portland House, on the same terms and conditions as before.  

12	She received that letter on 12 May, shortly before seeing it she wrote a letter of resignation to take effect on 11 June contending that the company was in fundamental breach of contract entitling her to treat herself as constructively dismissed.  In evidence she accepted that the offer of the post as personal assistant to Mr Edwards was a comparable position within the terms of the handbook in that it was a mutually acceptable role taking into consideration the grade, salary, location, performance, skills and experience which she had.  

The Tribunal Decision
13	The majority, which included the Chairman, Mr A M Snelson, found that the relevant contractual term as to re-engagement was that re-engagement should occur within a reasonable period of her return to work.  There was no breach of that term by the Respondent on the facts of this case.  

14	Nor was the Respondent in breach of the implied term of mutual trust and confidence.  The Respondent acted in good faith in pursuing the objective of finding the Appellant a suitable post and complaints which she made of her working conditions up until her resignation were rather trivial.  

15	Alternatively they found that if the Respondent was in breach of the term of mutual trust and confidence the breach was minor and not repudiatory.  Accordingly she was not constructively dismissed for the purpose either of the unfair dismissal claim or the contractual redundancy claim.  

16	The minority member took a different view on the construction of the re-engagement term.  He accepted the Appellant’s case that failure to re-engage her in a mutually acceptable role on the day of her return constituted a fundamental breach of contract which she accepted by her resignation letter of 12 May.  He would have found that she was constructively dismissed.  

17	However, the majority view prevailed and accordingly the case went no further.  The Originating Application was dismissed.  

The Appeal
18	Two questions arise in this appeal.  
1) The construction point.
Mr Wilson submits that the provision in the employee handbook, forming part of the contract of employment is clear.  The Appellant was entitled to be re-engaged in a comparable position immediately on expiry of her sabbatical leave period.  In this case she was not.  Accordingly the Respondent was in breach of contract from 22 May, no comparable position then being available.  That was a fundamental breach of contract.  The Appellant accepted that breach by resigning.  She was constructively dismissed.

It was not necessary, he submits, as a matter of business efficacy, for a term to be implied that re-engagement must occur within a reasonable period.  He invites us to uphold his literal construction of the contract, this being a pure question of law for us to decide.  

We have carefully considered that submission but we are unable to accept it.  We return to the express words of the handbook.  It is clear that in a case where a sabbatical is taken for three months or less that the employee is entitled to be reinstated, that is, return to her old job without alteration.  In those circumstances we think that Mr Wilson’s construction does apply to the reinstatement provision.  

However, the re-engagement provision is different.  By definition that requires re-employment in a different job.  

It was plainly the intention of the parties that the employment relationship would resume after the sabbatical leave period ended; It must equally have been clear that a comparable position may not have been available at the precise moment that the sabbatical ended.  If the literal construction contended for by Mr Wilson is right then the contract would, in those circumstances, become unworkable.

In such circumstances it is consistent with long-standing authority, back to the Moorcock, [1889] 14 PD 64, that to give efficacy to the contract it is necessary to imply a term that whilst the Appellant will be re-employed on the same terms as to pay and other benefits as before immediately on termination of the sabbatical period, a comparable position will be found within a reasonable period.  

Accordingly we uphold the majority decision that the contract is subject to that implied term.  The Respondent complied with that term by offering a comparable position on 12 May as the Tribunal found. In these circumstances there was no breach of contract.

(2) The implied term of mutual trust and confidence
The Tribunal unanimously rejected the Appellant’s case that the Respondent was in fundamental breach of that undoubted implied term.  

They found that the Respondent had acted properly and in good faith in seeking a comparable position for the Appellant and further that the minor complaints made by her about her working conditions following her return to work did not amount to a breach of the implied term.  In any event, they found that even if such a breach had been made out it did not go to the root of the contract.  

19	Those findings are essentially questions of fact and degree for the Employment Tribunal.   We are not persuaded that they were perverse.  

20	Accordingly this second line of attack also fails and the appeal must be dismissed.