Appeal No.	 EAT/828/01

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 15 October 2001

Before
THE HONOURABLE MR JUSTICE WALL

			MR J R CROSBY

MR S M SPRINGER MBE

DALKIA ENERGY & TECHNICAL SERVICES LTD	APPELLANT

MR J W ELVERSON	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING 

Revised

	APPEARANCES

For the Appellant	MS ALISON RUSSELL
(of Counsel)
Instructed by:
Messrs Argles Stoneham Burstows
Solicitors
Stoneham House
17 Scarbrook Road
Croydon
Surrey CR0 4SQ	

MR JUSTICE WALL

1	The Respondent to this appeal, James William Elverson, was employed by the Appellant Dalkia Energy & Technical Services Ltd as a financial accountant until his resignation on 12 April 2000.  On 8 July 2000 the Respondent issued a form ET1, claiming constructive dismissal.  

2	After a two day hearing the Employment Tribunal, sitting at Southampton upheld the Respondent’s complaint.  Extended Reasons were sent to the parties on 23 February 2001.  The remedies hearing was held on 3 May 2001.  Extended Reasons were sent to the parties on 30 May.  The same Tribunal awarded the Respondent a total of £28,649. 

3	It is against the second Decision that the appeal is brought and this is the preliminary hearing of it.  The Tribunal found, in the liability hearing, that the Appellant was in fundamental breach of contract.  Paragraph 11 begins with this sentence:
“The Tribunal reached a unanimous decision and find that there was a breach by the Respondents of the implied term of mutual trust and confidence and it was a fundamental breach which entitled the Applicant [the Respondent before us] to resign and claim constructive dismissal.”

We do not think it necessary to set out the facts in any substantial detail.  The Respondent’s claim arose out of a merger between the Appellant, then based at Tolworth, and a sister company based in Portsmouth.  The essence of the Respondent’s claim was that he had been demoted by the Appellant, which had failed despite many efforts on his part to provide him with a job description and a position in the Appellant’s structure.  Attached to the form ET1 was a detailed chronology of events, as to which the Tribunal commented as follows:
“The Applicant in his statement and Notice of Application catalogues in great detail meetings with and requests to management concerning his future role in the company.  However, neither Mr Whitlock nor Mr Addison [two members of the Appellant] refer to these meetings or requests and, in the circumstances, the Applicant’s [Respondent’s] evidence in respect thereof is to be preferred.”

As indicated earlier, the Tribunal then went on to make a number of detailed findings of fact relating to the history and the Appellant’s treatment of the Respondent, including what happened in the course of the move which the Respondent made to Portsmouth.  The Tribunal found that there was a fundamental breach.  The reasons continue:
“the Applicant was in a singular position as, of the 26 employees at Tolworth, all were to be made redundant with the exception of the Applicant and this immediately put him in a different position to those staff continuing to work at Portsmouth and it was not unreasonable for him to wish to know how he, being the only transferee from Tolworth, would fit into the new structure.  He did lose some line management responsibilities at Tolworth from June 1999.  All responsibilities were lost on his transfer to Portsmouth and despite repeated requests, he received no clarification about his future role.  He started work in Portsmouth on 7 December 1999 with no clear role or assurances concerning his future, except by this time all his line management responsibilities had been removed.  On 8 February 2000 a new structure plan was issued which showed the Applicant as part of a nominal ledger team and as his DTS work was coming to an end, it appeared to him that the future was insecure and at a meeting that day he was told that restructuring should be completed by 31 March 2000.  As he heard nothing further by that date concerning his future, his perception was that, in reality, he was redundant.  He made a proposal that he should be made redundant, saying that he wished to go by the end of June.  He received no satisfactory response and, believing that he was not part of the company’s future plans, felt that he had had enough and resigned on 12 April 2000.  We are satisfied that this amounted to unfair constructive dismissal.  The Applicant was clearly dissatisfied with the way the company were whittling away his responsibilities and at the same time not dealing with his future and continued to refuse to spell out his new role.  Whilst loss of the management responsibilities was in itself a breach, we are satisfied that in August 1999 it was reasonable in all the circumstances to delay resignation in the belief that when the merger was complete, a comparable job would be available.  Resignation at that time would be regarded as a hasty reaction to circumstances when the Respondents were quite reasonably dealing with all the problems concerning the merger of the two companies and the transfer to a new company at its new Portsmouth office and it has been held that it is reasonable for employees to look for other ways of resolving the situation before resigning.  He was told that restructuring would be complete by 31 March 2000 and failure by the company yet again to clarify his role finally convinced him that he had no future with the company.  The Tribunal find this to be a fundamental breach of trust and confidence and this amounted to an unfair dismissal.  We are also satisfied that this was the real reason for his resignation.  Whilst it is clear that before he resigned he had secured the offer of alternative employment from another company, this was at a substantially reduced annual salary and could hardly have been the real reason for his resignation.  The discussions with the Respondents had gone on for some time and appeared to be inconclusive and led to a situation where resignation was forced upon the Applicant.  In those circumstances, it is not unreasonable for an employee to take provisional steps to mitigate any future loss that might be occasioned by a resignation.  We are satisfied that the breach of contract by the employers was the effective cause of his resignation.  The Tribunal will reconvene at a date to be fixed to determine the appropriate remedy in the matter.”

4	We have cited extensively from the Tribunal’s Reasons for the first Decision, because although it is not appealed, the principal attack on the reasons for the liability hearing, set out in paragraphs 3 and 4 of the Notice of Appeal and expanded by Miss Russell in the course of argument before us and perhaps her most substantive point on appeal, is that the Tribunal had found that: 
“3……the effective cause of the resignation was the reduction in responsibilities and/or the restructuring exercise.  In such circumstances, the Appellant submitted that even if the new role had been “spelled out”, as required by the Respondent, there was a 50% likelihood that the Respondent would have resigned in any event, without there being a constructive dismissal.
4.  The Appellant further submitted in the alternative to any constructive dismissal in such circumstances could have been fair, in all the circumstances for some other substantial reason (a genuine business re-organisation).  The Appellant submitted that a 50% reduction in compensatory award was appropriate in the circumstances.” 

5	We are entirely unimpressed with this argument and do not think that it raises an arguable point for a full hearing.  The simple fact of the matter is that the Tribunal found that the Appellant had broken the implied term of trust and confidence, and that this was a fundamental breach.  Whether the Respondent would have resigned in the circumstances, seems to us both unlikely and at best highly speculative, and in our judgment there was no reason why the Tribunal should have directed a reduction in the compensatory award, in the circumstances of the facts as they found them.  

6	The second substantive ground of appeal was that the Tribunal failed to make a deduction for accelerated receipt.  This is plainly a matter for the exercise of the Tribunal’s discretion, and in light of the facts they found in the circumstances of the case, we do not think they can be criticised, nor can it be said they committed an arguable error of law in failing to make such a reduction.  

7	Thirdly, Miss Russell relies on the well known case of Meek v City of Birmingham City Council for the argument that the Tribunal, notably in the first Decision, did not set out its Reasons with sufficient clarity, and in particular, did not deal with her substantive arguments in relation to the 50% deduction.  Once again, we do not think on the facts of this case that that raises an arguable point of law.  

8	The Tribunal’s findings in the first hearing were extremely clear.  They found, as the extracts I have set out indicate, and stated several times, that there was a fundamental breach of contract by the Appellant  and in these circumstances, on the basis of their findings of fact, it seems to us that they were entitled to go on to make the findings in relation to finance which they did.  No specific attack is launched any of these particular findings in the second hearing: all that is said is that either there should have been a 50% reduction, alternatively a 5% deduction for accelerated payment.  In our judgment, the Tribunal does not appear to have erred in law in this regard and in our judgment, sufficient reasons for their conclusions are given in the first set of Reasons.  

9	In those circumstances, we take the view this appeal should not go forward to a full hearing, but should be dismissed at this stage.