The claimant, a delivery/warehouse operative, was subject to racist comments and name calling which the respondent failed to deal with. He resigned from his employment because of his pairing with another colleague and brought claims of direct race discrimination, constructive unfair dismissal, racial harassment and unlawful deductions from wages to the ET. His complaints of racial harassment and unlawful deductions were upheld, the other claims were dismissed. The constructive unfair dismissal claim was rejected on the basis that the claimant had delayed too long before resigning to be able to rely on a breach of the implied term of trust and confidence. The claimant appealed.

The EAT ruled that the ET had fallen into error. In his letter following his oral resignation, the claimant had complained of harassment and discriminatory and unfair practices. The claimant worked for an employer which tolerated not only racial banter in the workplace but also the expression of extreme forms of racial prejudice. This culture did not alter, on the Tribunal's findings, at any time before the claimant resigned. Thus, the question for the Tribunal was whether that state of affairs constituted a continuing breach of trust and confidence. The Tribunal, on remission, had to consider i) what the contractual term was that was said to have been fundamentally breached by the respondent; ii) if it was the trust and confidence term; iii) when did the breach cease; iv) did the claimant delay too long in resigning; and v) did he resign at least in part in response to the breach found.

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Appeal No. UKEAT/0573/10/DA

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 20 October 2011

Before

HIS HONOUR JUDGE PETER CLARK, MR D EVANS CBE, MR B M WARMAN

MR R A MORGAN (APPELLANT)

HALLS OF GLOUCESTER (RESPONDENT)

Transcript of Proceedings

JUDGMENT

**APPEARANCES**

For the Appellant
MS ANNA BEALE (of Counsel)

Instructed by:
Harpers Solicitors & Advocates
75 Gray's Inn Road
London
WC1X 8US

For the Respondent
MR STEPHEN ROBERTS (of Counsel)

Instructed by:
Lyons Davidson Solicitors
Victoria House
51 Victoria Street
Bristol
BS1 6AD

**SUMMARY**

UNFAIR DISMISSAL – Constructive dismissal

Constructive dismissal - fundamental breach of trust and confidence term. Culture of racial abuse - whether Claimant delayed too long in resigning - whether breach was to some extent reason for resignation. Appeal allowed. Case remitted to same Employment Tribunal.

**HIS HONOUR JUDGE PETER CLARK****Introduction**

1. This is an appeal by Mr Morgan, the Claimant before the Bristol Employment Tribunal against the reserved Judgment of Employment Judge Christensen, Mr N Hardy and Ms J Miller, promulgated with Reasons on 2 September 2010 insofar as it dismissed his complaints of direct race discrimination and constructive unfair dismissal against his former employer, the Respondent Halls of Gloucester. His complaints of racial harassment and unlawful deductions from wages were upheld. Holiday pay and breach of contract claims were dismissed and do not form part of the appeal.

**Background**

1. The Claimant, who is black, commenced employment with the Respondent as a delivery driver/warehouse operative on 15 September 2007. He resigned orally from the employment on 19 November 2008, on notice expiring on 10 December. He gave reasons for his resignation in a letter dated 28 November which we called for, but the parties were unable to provide to us. Mr Morgan represented himself before the Tribunal. Mr Roberts of counsel has appeared on behalf of the Respondent, both here and below. On appeal, the Claimant is represented by Ms Beale of counsel.

1. At paragraph 3 of their Reasons, the Tribunal identified seven acts of race discrimination alleged against the Respondent by the Claimant (see paragraphs (a) to (g)). Paragraphs (a) and (b) were also said to amount to unlawful harassment under s.3A of the 1976 Act. They were (a) in March/April 2008 the Claimant was told by Derek Bowers, another driver who was white, to "stop speaking that jungle talk" when he, the Claimant, was in conversation with another black employee, Brian Ennis; and (b) in August 2008 the Claimant overheard a new, white employee, Chris Carter Stevens, referring to Mr Ennis as "Black Brian" and then "Golliwog Brian". Further, by way of background, the Claimant alleged that another colleague, Barry White, expressed his view in October 2008 that black people should be burnt at the stake like jews. That remark was reported to Ms Miles, one of the proprietors of the Respondent, by a Mr Dalton, also an employee.

1. At paragraph 4, the Tribunal identified the constructive dismissal issue economically in these terms:

"4. Has the claimant been constructively unfairly dismissed? His case being based upon a number of events that take place throughout his period of employment and then a final straw in November 2008."

1. In short the Tribunal rejected allegations (c) to (g). They accepted the Respondent's non-discriminatory explanation for each of those events (see paragraph 82). However, they accepted the Claimant's evidence as to allegations (a) and (b) and the remark attributed to Mr White, treating the first two as in time acts of racial harassment contrary to s.3A. At paragraphs 72-73 they said this:

"72. We are satisfied from the evidence that the claimant worked for an employer that tolerated not only racial banter in the workplace but also the expression of extreme forms of racial prejudice. We are satisfied that the background event complained of took place and also that Ms Miles knew about it because Mr Dalton reported it to her. She has presented us with no evidence of any steps taken to address the very extreme racist views of Mr White. Further Ms Miles had no index of concern that it could in any way be inappropriate for Mr Ennis to be called black Brian.

73. Although we readily accept that nicknames are often used at work, employers need to be alert to the possibility that they may cause offence to ensure that they properly protect their employees from harassment and the indignity and offence that it can cause. It was noteworthy that Ms Miles was entirely unreceptive to the notion that calling someone by the colour of their skin could cause offence. She had given no thought to finding another way of distinguishing the two Brians that did not involve labelling one of them by reference to the colour of his skin. Further she had had no training in the principles of equal opportunity and appeared to have an entirely closed mind to what those principles might entail. That the respondent had an equal opportunities policy stored in a drawer or cupboard does not alter our view nor indeed does the fact that Ms Miles comes from a racially diverse background."

1. As to the claim of constructive unfair dismissal, they found that the Claimant was not constructively dismissed for the reasons given at paragraphs 84 to 87. Accordingly, the unfair dismissal complaint was dismissed.

**The appeal**

1. Ms Beale complains, first, that the Tribunal failed to make findings of fact on each of the matters complained of by the Claimant as forming the sequence of events which, cumulatively, amounted to what both counsel accept was an alleged breach of the implied term of mutual trust and confidence. As to that, we accept Mr Robert's submission that not every point raised by the parties need be expressly decided by the Tribunal. It is sufficient, in our judgement, that the Tribunal considered and rejected the various complaints made by the Claimant as amounting to a breach of the implied term, save for the question of racial abuse.

1. At paragraph 84 the Tribunal appear to accept, again it is common ground, that the two acts of harassment found in March/April and August 2008 were capable of amounting to a fundamental breach of the implied term (not spelled out), but held that the Claimant had delayed too long before resigning to be able to rely upon them, taking their lead from the classic exposition by Lord Denning MR in Western Excavating (ECC) Ltd v Sharp [1978] IRLR 27.

1. In so doing, we consider that Ms Beale is correct in submitting that the Tribunal fell into error. As they observe at paragraph 60, in his letter of 28 November, the Claimant complained of harassment and discriminatory and unfair practices. The Tribunal found, at paragraphs 72 to 73 (set out above), that the Claimant worked for an employer which tolerated not only racial banter in the workplace but also the expression of extreme forms of racial prejudice.

1. That culture did not alter, on the Tribunal's findings, at any time before the Claimant resigned. Ms Miles did nothing to correct it; she could not see any problem. Thus, the question for the Tribunal was whether that state of affairs constituted a continuing breach of the trust and confidence term.

1. If it did, then they were wrong to isolate the two instances of harassment and treat the time lag between the last of those incidents and resignation as, of itself, amounting to affirmation by the Claimant or alternatively waiver of the breach (assuming that was the Tribunal's finding at paragraph 84).

1. Further, the Tribunal focused at paragraph 85 on the event that triggered his resignation on 19 November, an event unconnected with the culture of racial abuse. Mr Roberts asks us to treat the contents of paragraph 85 as a finding by the Tribunal that the sole cause of the Claimant leaving was his dislike of substituting for Mr Mitchell on his Gloucester round. That is not how we read paragraph 85. That unconnected event was the trigger for his leaving, but the question for the Tribunal was whether the culture at the Respondents was a continuing breach of the implied term of trust and confidence and, if so, whether the Claimant resigned, at least in part, in response to that breach (see Nottinghamshire County Council v Meikle. It need not be the sole cause of the resignation (James v Sirl & Son (Furnishers) Ltd.

**Disposal**

1. It is not clear to us from the Tribunal's Reasons that they have approached the question of constructive dismissal correctly, that is, in the way set out above. In these circumstances we shall allow the appeal and remit the question of constructive dismissal (but not direct race discrimination) to the same Tribunal for reconsideration. That is the course urged on us by both parties if we allow, as we have done, the constructive dismissal appeal. At the remitted hearing it will be for the Tribunal to consider:

(i) What was the contractual term said to have been fundamentally breached by the Respondent? If it was the trust and confidence term, it will be necessary to determine precisely how the claim is put in relation to the culture of racial harassment, as found by the Tribunal.

(ii) Did the Respondent breach that term and, if so, when, if at all, did the breach cease before resignation?

(iii) Did the Claimant delay too long in resigning, such as to have affirmed the contract in those circumstances?

(iv) Did he resign, at least in part, in response to the breach found?

in deciding whether or not the Claimant has made out his case of constructive dismissal.