Newcastle City Council v Spires UKEAT/0334/10/ZT

Appeal against a ruling by the ET that the claimant had been subject to disability discrimination and had been constructively and unfairly dismissed. Appeal allowed in relation to reasonable adjustments and remitted to the same Tribunal for consideration.

The claimant went off sick due to stress caused by the working practices at the respondent. Grievances were initially not dealt with and an occupational health report concluded that the claimant would not be able to return to her job nor indeed do alternative work within the respondent but did not consider that the claimant met the criteria for ill-health retirement. The claimant eventually resigned on the same day that her sick pay ran out and alleged amongst other things that she should have been put on the redeployment register. The Tribunal found that the respondent was in breach of its duty to make reasonable adjustments; they should have given the claimant an assurance that she would not be put back into the same working environment which had caused her the stress, and they should have considered medical redeployment as an option. The Tribunal also found that the respondent was in breach of the implied term of trust and confidence and the implied term that the respondent will reasonably and promptly afford a reasonable opportunity to employees to obtain redress of any grievance they may have. The respondent challenged the finding that the claimant had not affirmed the contract; they claimed that it was too much of a coincidence that the claimant’s decision to resign took place when her sick pay ran out.

The EAT ruled that that the Tribunal’s finding that the respondent should have ‘explored’ medical redeployment was insufficient and did not address the specific reasonable adjustment put forward, namely that the claimant ought to have been placed on the redeployment register. Also, the Tribunal was entitled to find that the failure by the respondent to deal with her grievance was the ‘last straw’ and that the claimant had not affirmed the contract by receiving sick pay.

__________________

Appeal No. UKEAT/0334/10/ZT

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 22 February 2011

Before

HIS HONOUR JUDGE RICHARDSON

DR B V FITZGERALD MBE LLD FRSA

MR A HARRIS

NEWCASTLE CITY COUNCIL (APPELLANT)

MRS K SPIRES (RESPONDENT)

Transcript of Proceedings

JUDGMENT

**APPEARANCES**

For the Appellant MR S GOLDBERG (of Counsel) Instructed by: Newcastle upon Tyne City Council Legal Services Civic Centre Newcastle upon Tyne NE99 2BN

For the Respondent MR C BOURNE (of Counsel) Instructed by: UNISON Legal Services Employment Rights Unit 1 Mabledon Place London WC1H 9AJ

**SUMMARY**

DISABILITY DISCRIMINATION – Reasonable adjustments

UNFAIR DISMISSAL – Constructive dismissal

Reasonable adjustments. The Tribunal was not entitled to hold that the Respondent was in breach of its duty to make reasonable adjustments in respects which were not identified as issues in the case. Chapman v Simon [1994] IRLR 124 and Tarbuck v Sainsbury's Supermarkets Limited [2006] IRLR 664 applied. The Tribunal's finding that the Respondent should have "explored" medical redeployment was insufficient and did not address the specific reasonable adjustment put forward – namely, that the Claimant ought to have been placed upon the redeployment register. Reasonable adjustment issue, as regards redeployment, remitted for consideration by the same Tribunal.

Since the Tribunal found the Respondent to be guilty of a continuing fundamental breach of contract, the Claimant was entitled to resign when she did, and no question of affirmation arose. In any event, the Tribunal's reasoning contained no error of law: the Tribunal was entitled to conclude that there was a "last straw" prior to resignation and that the Claimant had not affirmed the contract by receiving sick pay. Bliss v South East Thames RHA [1985] IRLR 308; London Borough of Waltham Forest v Omilaju [2005] IRLR 65 and El-Hoshi v Pizza Express Restaurants applied.

**HIS HONOUR JUDGE RICHARDSON**
  1. This is an appeal by Newcastle City Council ("the Council") against a judgment of the Employment Tribunal sitting in Newcastle (Employment Judge Hunter presiding) dated 14 April 2010. By its judgment the Tribunal upheld claims of Mrs Katherine Spires that she had been subjected to disability discrimination and had been constructively and unfairly dismissed by the Council.
**The Background Facts**
  1. Mrs Spires had been employed by the Council since 1980. In July 2005 she became a BNG co-ordinator – managing a team within a scheme concerned with urban renewal in Newcastle and Gateshead.
  1. As the Tribunal found, Mrs Spires was concerned about a number of aspects of her work. These included the staffing of her team and the fact that there were two teams attempting to deliver the same objectives. It worried her that lack of clarity over decision making was giving rise to inefficiencies, conflict and duplication of work. She wished to have more rigid demarcation between the two teams. This, however, was her perspective and was not shared by more senior management.
  1. Mrs Spires was off work on sick leave between 10 April 2006 and 12 September 2006. She then worked until 9 August 2007. She was then off work on sick leave again until her eventual resignation on 2 July 2008. The Tribunal was principally concerned with events between these dates. In particular the Tribunal was concerned with the way in which grievances were dealt with and the way in which her sickness absence was managed. We will deal with these in turn.
  1. Mrs Spires submitted a formal written grievance through her trade union representative on 6 September 2007. She set out detailed complaints. She said that her current illness and previous illness were stress related. She blamed excessive workload; lack of clarity around roles and responsibilities; her role as manager being undermined; being required to take inexperienced staff; lack of stress risk assessment; failure to follow the Council's sickness absence procedure; and severe tensions in her team.
  1. This grievance was never resolved. A director, Ms Fallon, was appointed to deal with it, and a meeting eventually took place between Ms Fallon and Mrs Spires on 8 January 2008. Ms Fallon left the Council at the end of January without resolving the grievance. On 14 February Mrs Spires wrote to say that the lack of clarity and progress was having an impact on her health. She asked for a timescale with a view to her case being treated as a priority. There was no response. On 14 March she submitted a second grievance in relation to the failure to deal with the first grievance, saying that her health had deteriorated further, partly as a result of this failure. The grievances were never dealt with. Eventually, after her resignation, the Council acknowledged the failure to deal with her grievances and apologised.
  1. As regards her sickness absence, the Council referred Mrs Spires to occupational health. By letter dated 12 October 2007 Dr Black informed the Council that Mrs Spires was unfit for work with stress and depression related symptoms and would remain unfit for at least another 2 months. She said:

"Having been absent before with stress and depression it is clearly very important that Mrs Spires does not return to an unchanged situation and that she feels she is returning to a work situation in which she will cope."

  1. On 13 December 2007 Dr Black again wrote to the Council. She said that she hoped the grievance would be heard early in January and then there would be a discussion with her manager about the work issues which Mrs Spires felt were contributing to her stress and anxiety. These things, as we have seen, did not happen.
  1. On 1 February 2008 Dr Black again wrote to the Council. She said it was important to resolve outstanding issues quickly. She said it was unlikely that Mrs Spires' symptoms would settle to a level where she could consider a return until the matter of the grievance had been settled and she felt assured about her work situation.
  1. On 23 April 2008 a meeting took place upon which the Council placed considerable reliance at the Tribunal hearing (see paragraph 2.26, where the Tribunal records that it was asked to make "robust findings"). The Tribunal described it as "essentially an attempt at mediation". For the Council it was led by a senior manager, Mr Hopwood.
  1. In their primary findings of fact the Tribunal set out relevant emails concerning this meeting, and summarise Mrs Spires's evidence, returning to the meeting in some detail in their conclusions. The Council's email to Mrs Spires said:

"You said that you had been let down because none of the Authority's procedures had been appropriately deployed to support you. You had therefore concluded that there was no acceptable way back into the organisation because of a lack of trust in the Authority.

I said, and we agreed, that we should urgently seek an opinion from Dr Black especially about your eligibility for ill health retirement. In any event it was essential to manage your illness through the procedures as are approaching the end of your sick pay. You were very clear, however, that you did not think that medical redeployment to be an acceptable option."

  1. Mrs Spires again saw Dr Black, who reported on 9 May 2008 that she remained off work suffering from anxiety and depression and was presently unfit for work of any kind. She said that Mrs Spires felt her anxiety levels had been increased by the fact that there had been no resolution of the matter regarding her grievance. She recorded Mrs Spires as being "adamant that she will not be able to return to her job nor indeed to alternative work within the Council". She concluded that Mrs Spires would be unable to return to her job in the foreseeable future; but she did not think Mrs Spires met the criteria for ill-health retirement.
  1. On 3 June 2008 Mr Hopwood wrote to Mrs Spires. He said there was "no future for this matter within the Grievance Procedure". He said ill health retirement was not an option and that "the way forward is clear within the sickness procedure". He asked another manager to meet her under the sickness absence procedure. That manager told his team that Mrs Spires would not be returning. Mrs Spires learned about it. She felt completely abandoned by the Council. The GP notes for 30 June show that she was still suffering from depression. They record "work has told everyone she's leaving – not told her yet". That was the day when she ceased to be entitled to be paid during absence. On 2 July 2008 she submitted a detailed letter of resignation. She said, among other things, that she should have been put on the redeployment register by January 2008 when she met Ms Fallon – an allegation which was repeated in her claim form.
**The Tribunal's Reasons**
  1. In accordance with good practice the parties had agreed the issues which the Tribunal was to resolve and (subject to one point) the Tribunal set them out in its reasons. It is important to note the issues as regards disability discrimination.
  1. It was conceded by the Council that Mrs Spires was a disabled person from April 2006. There was no concession as to the Council's date of knowledge that she was disabled. Mrs Spires's claim was put on the basis of a failure to make reasonable adjustments. The "provision criterion or practice" ("PCP") relied on by Mrs Spires was:

"The practice of requiring the Claimant to carry out her duties in circumstances where there were no clear lines of responsibility as between different teams of employees, causing friction within such teams and within the Claimant's team."

  1. The Tribunal made a mistake in setting out the agreed issues about reasonable adjustments. The adjustments which it set out were the following.

"1.4.4 If so, on or before the claimant's return to work in September 2006 and or during the claimant's absence commencing on 9 August 2007 did the respondents fail to make any such adjustments, namely:

(a) seeking and, if appropriate, acting on medical advice as to the extent to which the claimant's working environment caused and/or contributed to her absences from work or either of them?

(b) taking steps to ensure that the claimant had adequately trained and experienced staff to enable her to carry out her duties.

(c) taking steps to ensure that duties and responsibilities were properly defined as between the claimant's team and others.

(d) placing the claimant on its redeployment register in order to avoid requiring the claimant to return to the same working environment that had caused/contributed to her ill-health."

  1. The Tribunal omitted to mention the following proposed reasonable adjustment on which Mrs Spires relied:

"taking steps to address Mrs Spires's grievances so that, on her return to work she would not be faced with the same environment that had caused her absence from work and that had been identified as likely to cause an exacerbation and/or recurrence of her condition"

  1. The Tribunal then set out findings of fact – on which we have drawn – and (in some detail) the statutory provisions and legal principles which it was to apply. In dealing with the law relating to constructive dismissal the Tribunal did not mention the law relating to affirmation; but, as we shall see, it dealt with affirmation in its conclusions.
  1. On the question of disability discrimination, the Tribunal found that the Council ought to have been aware of Mrs Spires' disability by September 2007 and was actually aware of it by 12 October 2007.
  1. As regards the PCP relied on, the Tribunal found that the Council was "tolerant of a working environment where lines of demarcation between teams were vague and where friction between teams was allowed to develop". In essence therefore it found that the PCP on which Mrs Spires relied was made out. The Tribunal was not critical of the Council for operating in this way – the scheme within which she worked was a pathfinder programme, operating successfully, and most staff could cope with it. But it accepted that the PCP placed Mrs Spires at a substantial disadvantage compared to those of her colleagues who did not have clinical depression.
  1. It is the Tribunal's reasoning on the question of reasonable adjustments which is challenged. We shall set it out in full:

"4.5 We have found that the duty to make reasonable adjustments did not arise until September 2007, by which time the respondent had taken occupational health advice. The claimant had submitted a grievance and the respondent had been advised that the claimant was not going to recover from her illness until her grievance had been resolved. At this stage there were two potential avenues the respondent could have investigated. First it could have altered the working environment so that the claimant might have felt comfortable at work. This would have involved the respondent enforcing the rigid lines of demarcation between the two teams as set out in the BNG Operational Manual and engaging staff with the experience the claimant considered appropriate to assist her in her duties. For the reasons set out before, the respondent did not want to do that. The working environment which the respondent chose to tolerate was manageable and most of its staff could cope with it. The tribunal does not consider that it would have been a reasonable adjustment in these circumstances to change the working environment in the way suggested by the claimant, since to do so would be to impose on the respondent a method of working it had chosen not to adopt.

4.6 The tribunal does, however, accept that the respondent, having chosen to tolerate such an environment, had an obligation to take steps to protect the claimant. As soon as the claimant had lodged her grievance, a reasonable adjustment would have been to have given the claimant an assurance that she would not be put back into that working environment and that medical redeployment would be considered. This clearly had been the intention of the Council according to the advice the claimant had received from her Union. However, the grievance was simply not dealt with owing to a major reorganisation of the Council's management structure and the sudden departure of Ms Fallon who had started to look at the claimant's grievance. Nor was the assurance referred to above given. The Council simply failed to progress matters. It seems to us that this was inexcusable. The assurance that the claimant would be considered for redeployment could have been given quite independently of any inquiry into the merits of the grievance. By the time the respondent came round to referring the matter for mediation by the joint secretaries the claimant's depressive illness had developed to such an extent that she was no longer prepared to discuss the possibility of medical redeployment. We have no doubt that the failure to deal with the claimant's grievance promptly and the failure to explore medical redeployment in September 2007 amounted to a failure to discharge the duty to make reasonable adjustments. We recognise of course that there may be arguments as whether making such an adjustment at that stage would have affected the outcome. That is a matter for further argument at a remedies hearing."

  1. Turning to the question of constructive dismissal, the Tribunal found that the Council was in breach of two implied terms – the implied term of trust and confidence, and what it described as the allied implied term that an employer will reasonably and promptly afford a reasonable opportunity to employees to obtain redress of any grievance they may have. The Tribunal was critical of the complete failure of the Council to deal with her grievance, which it described as "put on the back burner". The Tribunal said:

"We can think of no clearer example of conduct that was likely seriously to destroy or seriously damage the relationship of trust and confidence between the parties. It was repudiatory conduct entitling the claimant to resign"

  1. The Tribunal went on to find that "the failure to deal with the claimant's grievance and to look at the possibility of medical redeployment was the principal cause of the breakdown in mutual trust and confidence"; Mrs Spires resigned "because she had lost all confidence in the [Council] to safeguard her".
  1. These findings are not challenged by the Council on appeal. The challenge is to the Tribunal's conclusion that the Mrs Spires did not affirm the contract. We shall set out in full the Tribunal's reasoning on this point.

"4.9 We realise that the law of constructive dismissal is firmly rooted in contract law and that as a general principle when one party to a contract commits a repudiatory breach, the other party must elect whether to accept the breach, thus bringing the contract to an end or ignore the breach and affirm the contract. If the wronged party delays for too long or otherwise takes the benefit of the contract, then that party may lose the right to accept the breach and the resignation will not be treated as a dismissal. Although rooted in contract, employment law is also concerned with status. The employer and employee are not parties on an equal footing. To resign from employment is a potentially life changing decision and one that no employee will want to rush into without being certain it is the only option open to them. It is for this reason that employment tribunals are extremely cautious before they conclude that an employee's delay in resigning is sufficient to amount to an affirmation of the contract. This is particularly so where an employee is sick and even more so where the sickness is caused by a depressive illness. Had we formed the view that the claimant, while of sound mind, had formed a clear intention to leave in April 2008, but had deliberately delayed her decision to resign until her sick pay ran out at the end of June 2008, then we may have concluded that she had affirmed the contract and had lost her right to treat the resignation as a dismissal. We have not formed that view for the following reasons. We were asked by the respondent to make a clear finding of fact as to what the claimant had said at the Joint Secretaries' meeting. Our attention was drawn to Mr Hopwood's email and to his letters to the claimant which she did not challenge. Mr Hopwood was not called to give evidence and the claimant had no opportunity to question him. The claimant did give evidence on oath and hers is the best evidence of what was said. Although the claimant suggests a different nuance on what she said, it is clear that at that time she could not see a way back either to her old job or any other job with the respondent. We must take into account that the claimant was clinically depressed. That probably was how she felt at the time. It does not mean that she had formed a settled and rational decision to leave. People suffering from depression know only too well that if they are able to overcome their illness, they may very well look at things in a different light. The respondent implies that it is too much of a coincidence that the claimant's decision to resign took place when her sick pay ran out. We do not think it was a coincidence. It was the respondent who took the decision to bring matters to a head at this time. Mr Hopwood told the claimant in June that he was inviting Mr Beedle to meet the claimant under the sickness absence procedure. Mr Beedle, who had manfully covered the claimant's duties until this point arranged for Mr Andrew to take over. The claimant discovered this took place and we know from her medical records that it added to her depression. We do not find that these actions amounted to a breach of contract by the respondent, but they were sufficiently connected to the breach to be capable of causing the decision to resign. The claimant had clearly contemplated the possibility of resigning before she did, because she was taking legal advice. However, we are satisfied that the final straw was learning that the respondent was preparing to replace her."

**Reasonable Adjustments - Submissions**
  1. Mr Goldberg's submissions may be summarised as follows.
  1. Firstly, the Tribunal made findings as to reasonable adjustments which were not truly in issue in the case. This is impermissible: see Chapman v Simon [1994] IRLR 124 applied in the context of reasonable adjustments in Tarbuck v Sainsbury's Supermarket [2006] IRLR 664. Thus it was not an issue in the case as to whether assurances should have been given at the time the grievance was lodged, whether as to changes in work practice or as to medical redeployment. The real issues related to whether changes in work practice should have been made (decided in the Council's favour) or as to whether there should have been medical redeployment. Although there was a mention of grievances in the issue which the Tribunal forgot to set out, in truth that issue was concerned with changes in the environment.
  1. Secondly, the Tribunal erred in law in the way it dealt with medical redeployment. It did not find that Mrs Spires should have been medically redeployed. It found only that medical redeployment should have been "explored" or "considered". This is a matter preparatory to substantive action being taken, and not therefore a free-standing reasonable adjustment of the kind contemplated by the Act: see Tarbuck again. In any event its findings were insupportable. By referring her to occupational health, the Council was taking the necessary first step to exploring medical redeployment. In the light of Dr Black's reports, the Council cannot be criticised for not taking medical redeployment further.
  1. Thirdly, the Tribunal erred in law in holding that dealing with Mrs Spires' grievance promptly was a reasonable adjustment (even assuming this was an issue). The purpose of a reasonable adjustment is to prevent a PCP from placing the disabled person at a substantial disadvantage: section 4A. It is therefore necessary for the Tribunal to consider the extent to which the proposed adjustment would prevent that effect: section 18B(1)(a). The Tribunal in this case has not asked, or answered, the question – how (and how far) would earlier hearing of the grievances have prevented Mrs Spires from being at a substantial disadvantage in her working environment?
  1. The submissions of Mr Bourne on behalf of Mrs Spires may be summarised as follows, following the order of Mr Goldberg' submissions.
  1. Firstly, he submits that the reasonable adjustments which the Tribunal found were in issue in the case. As to assurances, these were covered by the first proposed adjustment, which included "acting on medical advice". He says it was implicit in the advice given by Dr King that these assurances should have been given; this was made explicit in her letter dated 2 February 2008. As to failure to deal with grievances promptly, this was covered by the issue which the Tribunal erroneously omitted to state in its reasons; and it was again encompassed in the words "acting on medical advice".
  1. Secondly, he submits that Tarbuck is not authority for the proposition that consideration of a particular step cannot in any circumstances be a reasonable adjustment. He submits that giving consideration to redeployment (for example by conducting a proper assessment) is quite different from consulting the employee, which was the issue in Tarbuck.
  1. Thirdly, he submits that dealing promptly with the grievance which Mrs Spires had presented was indeed a necessary first step in order to prevent the disadvantage which she was suffering through her working environment. The Tribunal was entitled to the conclusion which it reached.
**Reasonable Adjustments - Conclusions**
  1. Summarising paragraph 4.6 of the Tribunal's reasons, the reasonable adjustments which the Tribunal found to be established were:

(a) giving Mrs Spires an assurance that she would not be put back into the same work environment; this assurance should have been given as soon as the grievance was lodged (i.e. in September 2007);

(b) giving Mrs Spires an assurance that medical redeployment would be considered; this assurance should have been given as soon as the grievance was lodged (i.e. in September 2007);

(c) dealing with Mrs Spires' grievance promptly;

(d) exploring medical redeployment, beginning in September 2007.

  1. As regards (a) and (b) we accept the submission of Mr Goldberg that these were not issues in the case. The giving of early assurances to Mrs Spires was not a reasonable adjustment put forward on behalf of Mrs Spires; and the Tribunal ought not to have found the Council in breach of its duty to make reasonable adjustments on this basis. The Tribunal ought to have considered the complaints which were carefully defined at the commencement of the hearing. See Tarbuck at paragraphs 58 – 63, applying Chapman v Simon.
  1. Mr Bourne's argument that the Tribunal was entitled to deal with this issue because one proposed adjustment was "acting on medical advice" is not sustainable. There was no medical advice in September 2007 to give Mrs Spires an immediate, specific assurance; even if there had been the way that Mrs Spires' case was put did not raise it as an issue.
  1. We should make it plain that we are not in any way critical of the fact that the giving of a specific assurance at an early stage did not figure in Mrs Spires' case. In reality this case was about two potential kinds of adjustment, both of which Mrs Spires had properly raised. The first kind of adjustment related to changing her working environment: her case on this aspect was rejected by the Tribunal in paragraph 4.6 of its reasons. The second kind of adjustment related to redeployment. In reality, if she could not cope with the working environment as it was, those were the two potential kinds of adjustment.
  1. As to (c), we think that the Tribunal has again found the Council to have been in breach of a duty to make reasonable adjustments which was not put forward on behalf of Mrs Spires. In agreement with Mr Goldberg, we consider that the issue which Mr Bourne relies on was not concerned with the prompt holding of grievance hearings; it was concerned with addressing the grievances by dealing with her working environment. We would add that, for the reasons Mr Goldberg gave, if we had thought this was an issue which the Tribunal was entitled to address we would have found the Tribunal's reasoning insufficient.
  1. Again we are not critical of the way Mrs Spires' case was put, and for the same reason. Once granted the PCP and the substantial disadvantage which the Tribunal found, there were two potential types of adjustment; these were both properly pleaded, and they were in reality what the case was about. Hearing the grievance as such would not have prevented to any extent the substantial disadvantage which the Tribunal had found to exist. Only addressing the grievance – that is to say, acting on it, would have done so.
  1. We therefore turn to the way in which the Tribunal dealt with the question of redeployment: adjustment (d).
  1. The Tribunal's finding that redeployment should have been considered or explored is in our judgment not adequate to deal with this part of the case. It is not clear what the Tribunal meant by "exploring" redeployment; we think it probably meant "considering" redeployment (which is the phrase it used earlier in the same paragraph). This would plainly be an error of law. Merely going through the mental process of considering a potential step cannot amount to a "step" for the purposes of section 4A. If the Tribunal meant that the Council should have raised the issue of redeployment with Mrs Spires, it would again have committed an error of law: merely consulting an employee about a potential step would in our judgment not be sufficient: see Tarbuck at paragraphs 71-72. If the Tribunal meant something else, it has not said what it meant; and its reasoning cannot stand.
  1. The case for Mrs Spires was that she should have been placed on the Council's redeployment register (certainly by January 2008). This case was stated in her letter of resignation, repeated in her claim form and advanced as a specific reasonable adjustment. Unpacked a little further, her case as we understand it was that her grievance should have been resolved promptly; if resolving her grievance did not lead to changes in the working environment, then redeployment would have been the other potential adjustment; and the Council should have moved promptly to place her on the redeployment register, which was the essential first step to redeployment. The Council could not rely on its own delay and drift in dealing with the grievance as an answer to failing to make this adjustment if it was otherwise a reasonable adjustment.
  1. The Tribunal, possibly thinking that its finding that redeployment should have been "explored" was sufficient, did not address the specific case which was put forward on behalf of Mrs Spires. There are no findings about it. We certainly do not think, given the general tenor of its findings, that the Tribunal can be taken as having implicitly rejected it. On the contrary, we think it is a powerful case which the Tribunal ought to have addressed specifically and carefully.
  1. On this question, therefore, the matter must be remitted to the Tribunal. We think the Tribunal would do well to keep carefully in mind the general structure suggested by Environment Agency v Rowan [2008] IRLR 20 at paragraph 27; and the specific provisions of section 18B. The Tribunal is entitled to hear further evidence limited to this specific issue if (after consulting the parties) it decides to do so; and should certainly hear further submissions.
**Constructive Dismissal - Submissions**
  1. Mr Goldberg submits that the Tribunal's finding on affirmation is inadequate. He submits that the Tribunal did not adequately address the legal principles concerning affirmation. The Tribunal should have focussed on two questions: whether Mrs Spires was aware of the breach of contract and her right to resign as a result; and whether she did something from which it should be inferred that she intended to carry on with the contract. He refers to and relies on Cox Toner (WE) Ltd v Crook [1981] IRLR 443 at para 13. If the Tribunal had addressed these issues it would inevitably have found that she was aware of the breaches and by continuing to claim sick pay affirmed the contract. The Tribunal placed impermissible weight on the mental health of Mrs Spires in its reasoning.
  1. In answer to these submissions, Mr Bourne takes three main points. Firstly, he submits that the Council's breach of contract in failing to deal with her grievance was a continuing breach up to the date of her resignation; therefore Mrs Spires remained entitled to resign at any time while that failure continued: Bliss v South East Thames Regional Health Authority [1985] IRLR 308. Secondly, he submits that Mrs Spires was entitled to resign following the final straw in June even if she had continued to affirm the contract until that date: see London Borough of Waltham Forest v Omilaju [2005] IRLR 65. Thirdly, he submits that the reasoning and conclusions of the Tribunal contain no error of law. Delay and the receipt of sick pay are neutral on the question of affirmation: see El-Hoshi v Pizza Express Restaurants [2003] UKEAT/0857/03.
  1. In reply to Mr Bourne's first two points, Mr Goldberg submits that if Mrs Spires affirmed the contract in April 2008 she would not be entitled to rely on the continuing breach or upon a final straw.
**Constructive Dismissal – Conclusions**
  1. On this part of the case we accept the submissions of Mr Bourne.
  1. Firstly, we consider that it is plain from the Tribunal's findings and conclusions that the fundamental breach of contract – the failure to address Mrs Spires' grievance – was a continuing breach. Unless and until that breach was brought to an end by the Council Mrs Spires continued to be entitled to accept it and terminate the contract. The decision of the Court of Appeal in Bliss plainly proceeds on this basis: see paragraph 48. But we regard the principle as well established. It follows that Mrs Spires in this case was entitled to bring the contract to an end when she did.
  1. So long as the Council continued to be in fundamental breach Mrs Spires was entitled to continue to receive sick pay and to resign at a moment of her choosing. Of course if the Council had ceased to be in fundamental breach by remedying the breach, she would then lose the right to resign. Likewise if she agreed with the Council that her grievances need not be dealt with (in which case again the Council would cease to be in fundamental breach) she would lose the right to resign. But neither of these things happened in this case. It is not possible to draw the conclusion that she agreed that her grievances need not be dealt with merely because she continued to draw her sick pay.
  1. Secondly, we consider that the Tribunal was entitled to find that the Council's conduct, in making arrangements to replace her without informing her in advance, was the "last straw" which brought her to resignation.
  1. In Omilaju the Court of Appeal followed and applied an earlier decision, Lewis v Motorworld Garages Ltd [1985] IRLR 465, where Glidewell LJ said at 469:

"(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 [1982] IRLR 413.) This is the 'last straw' situation."

  1. Dyson LJ in Omilaju said:

"14.5 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 well put at para. [480] in Harvey on Industrial Relations and Employment Law:

'[480] 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.'

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. The last straw must contribute, however slightly, to the breach of the implied term of trust and confidence. Some unreasonable behaviour may be so unrelated to the obligation of trust and confidence that it lacks the essential quality to which I have referred."

  1. Applying those principles here, the Tribunal was entitled to conclude that the Council's action in replacing her – still without dealing with her grievances, without even having exhausted the absence procedures and without informing her – contributed to the overall breach of the implied term, even if viewed on its own it was not a breach of contract.
  1. Given these conclusions, some of the Tribunal's reasoning on affirmation was probably unnecessary. The Tribunal was, however, specifically asked to deal with the question whether Mrs Spires affirmed the contract by continuing to accept her pay after 23 April. This was a question of fact for the Tribunal unless some error of law can be distilled from its reasons. We do not think there was any error of law. In particular there is certainly no rule of law that a Tribunal must hold an employee who accepts sick pay to have affirmed the contract: see El-Hoshi at paragraphs 43-52 and the cases there cited. In this case, where the Council was itself suggesting possible methods of resolution such as early retirement, we consider that the Tribunal was fully entitled to hold that there was no affirmation.
  1. Accordingly the appeal will be dismissed in so far as the finding of unfair constructive dismissal is concerned. It will be allowed on the question of reasonable adjustments, and the matter will be remitted for the Tribunal to deal with the remaining issue concerning reasonable adjustments in accordance with the guidance we have given.
  1. We consider that it is appropriate, bearing in mind the considerations set out in Sinclair Roche & Temperley v Heard [2004] IRLR 763, to remit this issue to the same Tribunal. We believe that the Tribunal will consider this issue carefully and professionally; and we think the interests of justice and convenience favour remitting the matter to the same Tribunal

Published: 04/04/2011 11:07

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