Appeal No. UKEAT/0044/05/SM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 30 March 2005

Before
HIS HONOUR JUDGE MCMULLEN QC
MR P GAMMON MBE
MR R LYONS

THE SPIRIT GROUP LTD	APPELLANT

MR R BELL	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MS I NOONS
(Representative)	
For the Respondent	MR R BELL
(the Respondent in person)	

SUMMARY

Unfair Dismissal

The Employment Tribunal did not err when it held the Claimant was unfairly constructively dismissed. There was no break in the chain of events leading to the application of the last straw doctrine.  London Borough of Waltham Forest v Omilaju [2004] EWCA Civ 1493 applied.

HIS HONOUR JUDGE MCMULLEN QC

1.	This case is about a claim of unfair constructive dismissal brought by a manager of a unit in a well-known national chain of pubs and restaurants, who claimed, and his claim was upheld, that his employers had failed to support him throughout a period of a year during his career. The judgment represents the views of all three members. We will refer to the parties as Claimant and Respondent. 

Introduction

2.	It is an appeal by the Respondent against a reserved judgment of an Employment Tribunal sitting at Ashford, Kent, Chairman Ms V G Wallis, over one day and a day in chambers registered with Extended Reasons on 27 October 2004. The Claimant represented himself. The Respondent was represented by a consultant, and today by a different consultant, Ms Noons. The Claimant contented that he had been unfairly constructively dismissed; the Respondent denied dismissal and entered into the exchange by denying that it acted unfairly.

The issues

3.	The essential agreed issues, so far as are relevant to the appeal, were summarised by the Tribunal as follow and led to conclusions on each (see para below):

“3.	…:
(i)	Did the Claimant’s senior managers harass him with regard to changing his and his wife’s single contracts to a lower-paid joint contract in January 2003?
(ii)	Was the Claimant bullied because he refused to agree to that change?
(iii)	Was his grievance initially ignored?
(iv)	Was the grievance partly upheld in January 2004?
(v)	Did the bullying continue, culminating in disciplinary proceedings (suspension) on 30 March 2004?
(vi)	Did the conduct of the Respondent amount to a fundamental breach of the Claimant’s contract of employment, namely the implied term of mutual trust and confidence?
(vii)	If so, was that the effective cause of resignation?
(viii)	If so, was there any delay between the breach and the resignation?
(ix)	If there was a dismissal, was it fair or unfair in all the circumstances?”

4.	The Tribunal decided that the Respondent did not discriminate against the Claimant; he does not appeal that finding against him. But it upheld his claim of unfair constructive dismissal, and ordered a Remedies Hearing to take place. In answer to the issues, the Tribunal drew these conclusions:

“48. We concluded that the Claimant had not been “harassed” about his contract of employment by Mr Pocock and Mr Triggs on 20 January 2003, but that some mention was made of that during the course of that conversation. The answer to issue (i) is therefore No. 
49. With regard to issue (ii), we concluded that the Claimant was not bullied because he refused to change his contract of employment. He was, however, not given the management support that he was entitled to expect. Some of the treatment he described by Mr Pocock could fall under the heading “bullying”, but the Tribunal concluded that it was not connected with a refusal to amend the contract of employment. It was poor management by Mr Pocock which appeared to have been endorsed by Mr Triggs. 
50. Turning to issue (iii), we concluded that the Claimant’s grievance was ignored initially; he received no response at all. 
51. With regard to issue (iv), we concluded that the grievance was partly upheld in the letter of 8 January 2004 from Mr Holton because he accepted that the Claimant had valid complaints about the lack of support that he had received from his managers. 
52. With regard to issue (v), if the treatment of the Claimant by Mr Pocock and Mr Triggs was described as “bullying”, we concluded that that treatment had continued and it could be said that it culminated in the suspension of the Claimant on 30 March 2004. We concluded that certainly it looked as if this was the culmination of events as far as the Claimant was concerned. 
53. With regard to issue (vi), taking into account the cumulative effect of the Respondent’s conduct in this case, (Lewis v Motorworld Garaaes Ltd [1985] IRLR 465), we concluded that there had been a fundamental breach of the implied term of mutual trust and confidence in the Claimant's contract of employment. We reminded ourselves of the decision in the case: of Logan v Custom & Excise [2004] IRLR 63, in which there was a reminder that Lewis required a view in its totality of the whole course of conduct in order to see whether the actions of the employer constituted a breach of the implied obligation of trust and confidence. In this case, the Tribunal concluded that there had been a fundamental breach. The conduct of Mr Pocock and Mr Triggs towards the Claimant had been adopted by Mrs O'Donovan in her brief dealings with him, making it apparent to him that he was not to be treated fairly. 
54. With regard to issue (vii), we concluded that the fundamental breach had been the effective case of resignation. 
55. With regard to issue (viii), we concluded that there had been no delay by the Claimant in deciding to resign in response to that breach. 
56. With regard to issue (ix), we concluded that the dismissal was unfair in all the circumstances.”

In addition to directing itself in relation to the two authorities in paragraph 53, the Tribunal also considered Western Excavating [1978] ICR 221.

5.	The Respondent was ordered to pay a substantial part of the Claimant’s losses, which had been capped by statute at £55,000, together with a basic award of £1,350. That judgment remains outstanding, and has not been appealed. 

6.	The Respondent does appeal against liability. Directions sending this appeal to a full hearing were given in chambers by Rimer J, who indicated that the question to be determined was whether there were sufficient findings to justify a conclusion that the Claimant was unfairly constructively dismissed.

The legislation

7.	The law in this case is not in dispute. Section 95(1)(c) of the Employment Rights Act 1996 provides as follows:

“95 (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.”

Fairness is determined by section 98, but we have not been addressed on that issue, and need not rehearse it. 

The facts

8.	To the brief set of conclusions may be added a very short summary of our own, guided as we are by the agreed chronology, which extends for three pages or so. The Tribunal found that the Claimant was employed from the end of 1998 until his notice expired on 27 April 2004. He was the General Manager of the Vauxhall Inn in Tunbridge from 21 May 2002, where his wife was also employed as Head Chef. The Vauxhall Inn flies under the colours of the national chain of Chef & Brewer. 

9.	The chronology begins with the Claimant contending that he was not getting the kind of support he needed. The actors in this drama were Mr Pocock, who was his Manager, and Mr Triggs, who was Mr Pocock’s Line-Manager, who together visited the Vauxhall Inn in January 2003. Mrs Angela O’Donovan, the Business Development Manager, became Mr Pocock’s successor as Line-Manager in March 2004. She, together with Ms Cheryl Higginbotham the Human Resources Manager, and Mr Michael Holton, who had formerly been the Operations Director, gave evidence.

10.	It is important to note, as we take it from the skeleton argument of Ms Noons, that there is no dispute with any of the findings by the Tribunal as to what occurred in the period January 2003 – 2004. In brief, the Claimant had made complaints; apologies had been given to him by Mr Triggs and Mr Pocock for their behaviour, which the Tribunal found had caused the Claimant some unease, but was short of being harassment. The Tribunal found that throughout the period of that one year, the Claimant was not given proper management support by his seniors; indeed he was a verbal written warning. He registered a grievance which contended he had had a lack of support. The response to this grievance was haphazard and off-hand, indicating a further example of the way in which the Respondent treated him. 

11.	The grievance was not resolved until January 2004, when Mr Holton directed a letter to the Claimant. Very shortly thereafter, a telephone conversation took place in relation to the contents of the Claimant’s grievance. A note was taken by Ms Higginbotham. It is important to the Respondent’s contention that this note be expounded fully:

“He stated that he was quite happy now really, he had had a chat with Matt (Pocock) about a few things and Phil (Triggs) was coming to see him that afternoon so he felt that the issue was really boxed of now.”

The Tribunal’s finding about that put it into context. There was an issue as to whether or not the lack of support which the Claimant had proved in the preceding year had come to an end, and a fresh start had occurred. As to that, the Tribunal said:

“21.	…The Respondent suggested to the Tribunal that this meant that the matter was satisfactorily completed. The Tribunal accepts that the Claimant had put forward a positive attitude to Ms Higginbotham and we find that par of the reason for that was that he knew Mr Pocock was leaving shortly. The Tribunal also accepts that the Claimant was aware that he had no right of appeal and therefore he was trying to maintain a positive attitude to past events.
22.	There then followed a period of a few quiet weeks, which the Claimant described as the best weeks that he had had at the Vauxhall Inn, as Mr Pocock had left. At some time, neither party could assist the Tribunal with the date, Mrs O’Donovan replace Mr Pocock. The Vauxhall Inn operated under the Chef & Brewer brand. Mrs O’Donovan came from another part of the business. There was no dispute that she had not met the Claimant until 30 March 2004.”

12.	The end of that period of quietude was occasioned by the Claimant going on holiday in Portugal. The Tribunal found as “quite incomprehensible” the evidence given by Mrs O’Donovan that she was under the impression that Mr Triggs had arranged for cover to be provided for the Claimant during his holiday period. During the period of absence, the Claimant did himself arrange for a friend to look in, but as an audit on 19 March, found, under-aged person were working in the bar, apparently without supervision. Mr Pang had been recruited and told that he was to be offered the Claimant’s wife’s job as Head Chef. Mr Cox was to take over the Claimant’s job. 

13.	On his first day back at work on 30 March 2004, the Claimant noticed that his and his wife’s names had been removed from the duty roster. Mrs O’Donovan arrived with the Human Resources Officer. A meeting was conducted which ended chaotically with the Claimant’s suspension by Mrs O’Donovan, without any explanation. The meeting was badly handled by the Respondent, and the Claimant’s behaviour was understandable. The next day he submitted a resignation letter, indicating he would work his notice period, and set out his reasons for leaving as follow:

“I feel that my line manager has decided to remove me from my position as General Manager of the Vauxhall Inn; I can no longer continue to work for a company that conducts itself in this way. I feel let down by a company that advertises itself as People First, yet demonstrates entirely different values at a senior management level, after five years of committed service in which I have contributed several millions of pounds in trading profits I am disappointed that I must leave in this manner.”

14.	Attempts were made to reconstruct the situation by exchanges of correspondence, following that resignation letter, but the Claimant did not relent, and on 27 April 2004 the employment came to an end. Before it did, it must be noticed that the Respondent was seeking to hold disciplinary proceedings and had also made it clear that it would note on its files for future reference that the Claimant had left whilst on suspension, pending a disciplinary hearing. The Tribunal reached the conclusions which we have cited above.

The Respondent’s case

15.	The arguments addressed by the Respondent fall into two categories. It is accepted that the Tribunal directed itself on the law correctly, but failed to apply the law to the facts. The first principal issue is that the Tribunal failed to recognise that the accumulation of events, known as a series of events ending in a “last straw” event had been broken, or at least failed to make a finding as to that effect. Secondly, it is contended that the Tribunal erred by taking into account matters occurring after the resignation letter. It is mainly contended in this respect that the Decision of the Tribunal was perverse by meaning that the juxtaposition of the Tribunal’s finding that there was essentially a lack of support and bullying throughout the whole of his career was inconsistent with the Claimant’s assertion that the matter had been “boxed off” in January.

The Claimant’s case

16.	The Claimant presented a skeleton argument, which was prepared with some assistance, and he was content to rely upon the arguments set out. We are grateful to him for the concise way in which this is put, for it deals with all of the grounds of appeal advanced on behalf of the Respondent. 

The legal principles

17.	The application of the law has been shaped by two cases, which have been recently and succinctly summarised by the Court of Appeal in London Borough of Waltham Forest v Omilaju [2004] EWCA Civ 1493 in the judgment of Dyson LJ:

“14.	The following basic propositions of law can be derived from the authorities: 
1. The test for constructive dismissal is whether the employer’s actions or conduct amounted to a repudiatory breach of the contract of employment: Western Excavating (ECC) Ltd v Sharp [1978] 1 QB 761. 
2. It is an implied term of any contract of employment that the employer shall not without reasonable and proper cause conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee: see, for example, Malik v Bank of Credit and Commerce International SA [1998] AC 20, 34H-35D (Lord Nicholls) and 45C-46E (Lord Steyn). I shall refer to this as “the implied term of trust and confidence”.
3. Any breach of the implied term of trust and confidence will amount to a repudiation of the contract see, for example, per Browne-Wilkinson J in Woods v WM Car Services (Peterborough) Ltd [1981] ICR 666, 672A. The very essence of the breach of the implied term is that it is calculated or likely to destroy or seriously damage the relationship (emphasis added). 
4. The test of whether there has been a breach of the implied term of trust and confidence is objective. As Lord Nicholls said in Malik at page 35C, the conduct relied on as constituting the breach must “impinge on the relationship in the sense that, looked at objectively, it is likely to destroy or seriously damage the degree of trust and confidence the employee is reasonably entitled to have in his employer” (emphasis added). 
5. A relatively minor act may be sufficient to entitle the employee to resign and leave his employment if it is the last straw in a series of incidents. It is well put at para [480] in Harvey on Industrial Relations and Employment Law: 
“Many of the constructive dismissal cases which arise from the undermining of trust and confidence will involve the employee leaving in response to a course of conduct carried on over a period of time. The particular incident which causes the employee to leave may in itself be insufficient to justify his taking that action, but when viewed against a background of such incidents it may be considered sufficient by the courts to warrant their treating the resignation as a constructive dismissal. It may be the 'last straw' which causes the employee to terminate a deteriorating relationship.”
15.	The last straw principle has been explained in a number of cases, perhaps most clearly in Lewis v Motorworld Garages Ltd [1986] ICR 157. Neill LJ said (p 167C) that the repudiatory conduct may consist of a series of acts or incidents, some of them perhaps quite trivial, which cumulatively amount to a repudiatory breach of the implied term of trust and confidence. Glidewell LJ said at p 169F: 
“(3) The breach of this implied obligation of trust and confidence may consist of a series of actions on the part of the employer which cumulatively amount to a breach of the term, though each individual incident may not do so. In particular in such a case the last action of the employer which leads to the employee leaving need not itself be a breach of contract; the question is, does the cumulative series of acts taken together amount to a breach of the implied term? (See Woods v W. M. Car Services (Peterborough) Ltd. [1981] ICR 666.) This is the “last straw” situation.”
16.	Although the final straw may be relatively insignificant, it must not be utterly trivial: the principle that the law is not concerned with very small things (more elegantly expressed in the maxim “de minimis non curat lex”) is of general application.”

18.	That judgment was given after the judgment of the Employment Tribunal in our case, but there is no dispute that the Tribunal addressed the correct legal authorities in paragraph 53 of its judgment. The Claimant also relies on a passage of Dyson LJ, who says this at para 20:

“I see no need to characterise the final straw as “unreasonable” or “blameworthy” conduct. It may be true that an act which is the last in a series of acts which, taken together, amounts to a breach of the implied term of trust and confidence will usually be unreasonable and, perhaps, even blameworthy. But, viewed in isolation, the final straw may not always be unreasonable, still less blameworthy. Nor do I see any reason why it should be. The only question is whether the final straw is the last in a series of acts or incidents which cumulatively amount to a repudiation of the contract by the employer.”

Conclusions

19.	We prefer the arguments of the Claimant and have decided that the appeal should be dismissed. We will deal first with the contention that the Tribunal failed to make a finding, as it should, in relation to what occurred following the Claimant’s conversation on receiving the letter responding to his grievance. In our judgment, this did not stop the chain of causation. The Claimant had continually complained about lack of support, and the findings against the Respondent during the year when this occurred are not in dispute. We can well understand the way in which the Claimant put his response, as cited from paragraph 21 of the Tribunal’s reasons (above). The reasons which the Tribunal gives and cogently argues show that the Claimant was trying to put the best face he could upon the events. After all, his excoriator, Mr Pocock, was leaving shortly and the Claimant had no right of appeal; so what more could he do? Notwithstanding a quiet few weeks, the events following the Claimant’s return from annual leave in Portugal indicate there has really been no change in the Respondent’s failure to support him in the course of his work. The passage we have cited, describing the evidence of Mrs O’Donovan as incomprehensible, is, in our judgment, an ample explanation for the way in which the Tribunal viewed the events pre and post the conversation in January 2004. The complaints about his unfair treatment and the failure by the Respondent to support him appear to apply with exactly the same force as they did during the period prior to January 2004. 

20.	We thus reject the contention that there was a break in causation, and the Tribunal therefore cannot be criticised when it failed to uphold the Respondent’s contention that there was such a break. In our judgment the resolution, without further criticism of the Claimant of his grievance, did not stop the series of complaints the Claimant was making about the Respondent’s treatment of him.

21.	We turn then to the second contention, which is that the Tribunal erred when it paid attention, in paragraph 31, to matters which occurred after the letter of resignation. As a matter of law, we hold that Ms Noons is correct when she says that, when considering whether there has been a fundamental breach of the implied term of trust and confidence, matters have to be looked at as at the end of the period when the decision to leave is made, here 31 March 2004. The Claimant articulately expressed his dissatisfaction with the Respondent, giving his reasons as we have cited. Therefore, all that occurred prior to that date is relevant in assessing whether there was, pursuant to Omilaju, a series of events, not necessarily breaches of contract in themselves, which cumulatively added up to a fundamental breach. Nothing the Tribunal says about the events, when it must be recalled that the Claimant was under notice, following his resignation letter, destroys the essential focus on 31 March 2004. Indeed the Tribunal uses the word “confirmation” of the view the Claimant had. Thus, nothing new happened after that date, and the Tribunal has not allowed its completion of the chronology, from the resignation letter to the effective date of termination, to get in the way of its essential examination of the legal position, as at the date of the resignation letter. We regard this as simple comment, indicating the view the Claimant had already taken. 

22.	Further, we reject the contention that the Tribunal made inconsistent decisions in the way in which perversity is described in Yeboah v Crofton [2002] IRLR 634. It must be remembered that the threshold for successful perversity claims is very high, for, as Mummey LJ said:

“94.	Over the years there have been frequent attempts, consistently resisted by the Employment Appeal Tribunal, to present appeals on fact as questions of law. The technique sometimes employed is to trawl through the Extended Reasons of an Employment Tribunal, selecting adverse findings of fact on specific issues on which there was a conflict of oral evidence, and alleging, without adequate particulars, supporting material or even proper grounds, that these particular findings of fact are perverse and that therefore the overall decision is perverse. An application is often made to obtain the notes of evidence made by the chairman in the hope of demonstrating that the notes are silent or incomplete on factual points, that the findings of fact were not therefore supported by the evidence and that a question of law accordingly arises for the determination of the Employment Appeal Tribunal. 
95.	Inevitably there will from time to time be cases in which an Employment Tribunal has unfortunately erred by misunderstanding the evidence, leading it to make a crucial finding of fact unsupported by evidence or contrary to uncontradicted evidence. In such cases the appeal will usually succeed. But no appeal on a question of law should be allowed to be turned into a rehearing of parts of the evidence by the Employment Appeal Tribunal. I am, of course, well aware that this is easier said than done, especially when, as here, neither side was legally represented on the first level of appeal. As the Employment Appeal Tribunal was well aware, unrepresented litigants have understandable problems in separating questions of law from proof of facts and in distinguishing the making of legal submissions from submissions of fact, even giving evidence in the course of submissions.”

23.	The overwhelming case which must be made on the facts has not been made out in this case. It is, essentially, the same charge against the Tribunal as is made in the first ground, that is that the Claimant had more or less accepted the outcome of his grievance, and there had been a few quiet weeks following the departure of Mr Pocock. We deal with it in the same way. The Tribunal has not made a finding which was so unreasonable, indeed we can see clearly why it made that Decision and has put forward ample reasoning for it. 

24.	We finally turn to an argument put as a very subsidiary matter, which concerns what has been described as the failure to regulate the employment of others at the Vauxhall Inn, and the requirement of the Claimant to obtain licences. These matters were put to the Claimant after 6 April 2004. It follows from our response to Ms Noons’ contention about the correct cut-off date, that none of this would be relevant, except to go towards mitigation or contribution. The events therefore charging the Claimant with misconduct, or seeking to charge him with misconduct, did not occur until after the dismissal. The primary case the Tribunal had to determine was whether on 31 March 2004 a fundamental breach had been committed; it decided it had. We have heard no submissions to challenge the findings by the Tribunal on fairness, following that, and thus we have no difficulty in upholding the Decision.

25.	We would very much like to thank Ms Noons for her careful written and oral arguments today. The appeal is dismissed.