Nicholson v Hazel House Nursing Home Ltd UKEAT/0241/15/LA
Appeal against a finding that the Claimant was not constructively unfairly dismissed. Appeal allowed and a finding of constructive unfair dismissal was substituted.
The Claimant resigned after grievances over a reduction in her shifts and pregnancy related grievances were dismissed. She claimed constructive unfair dismissal and pregnancy related discrimination at the ET but lost, the ET not being satisfied that what occurred with regard to the grievance procedure amounted to circumstances in which the claimant was entitled to terminate the contract by reason of the employer's conduct. The Claimant appealed.
The EAT allowed the appeal and substituted a finding that she was constructively unfairly dismissed because, on the facts, there was no other decision to which a reasonable ET, properly directly itself in law, could have come.
Appeal No. UKEAT/0241/15/LA
EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8AE
At the Tribunal
On 12 May 2016
THE HONOURABLE MRS JUSTICE ELISABETH LAING DBE
NICHOLSON (nee WOODHOUSE) (APPELLANT)
HAZEL HOUSE NURSING HOME LIMITED (RESPONDENT)
Transcript of Proceedings
For the Appellant
MR STEPHEN BUTLER (of Counsel)
Bar Pro Bono Scheme
For the Respondent
MR MARTYN WEST (Representative)
UNFAIR DISMISSAL - Constructive dismissal
PRACTICE AND PROCEDURE - Disposal of appeal including remission
The Employment Tribunal ("EAT") allowed an appeal from a Decision of the Employment Tribunal ("ET") on the grounds that the ET's Reasons on constructive dismissal were flawed by material errors of law. The EAT substituted for a finding that the Claimant was not constructively dismissed a finding that she was constructively unfairly dismissed because, on the facts, there was no other decision to which a reasonable ET, properly directly itself in law, could have come.**THE HONOURABLE MRS JUSTICE ELISABETH LAING DBE****Introduction**
- This is an appeal from a Decision of the Employment Tribunal sitting at Manchester ("the ET"). The ET consisted of Employment Judge Sherratt, Mr D Roxburgh and Ms E Cadbury. That Decision was sent to the parties on 2 March 2015. On the paper sift HHJ Eady QC ordered an oral hearing with the Appellant only to attend. The then President, Langstaff P, ordered a Full Hearing of appeal after that hearing on 10 December 2015. He held, in short, that it was arguable that the ET had erred in its approach to the Claimant's constructive dismissal claim. Among other things, he said that the seventh agreed issue that the ET had to consider was whether the Claimant had been compelled to resign because of discriminatory treatment relating to her pregnancy and although, as he said, the Claimant's representative had frankly conceded that he had not argued the last straw doctrine, that ground certainly was capable of including it. I shall refer to the parties as they were below. The Claimant was represented by Mr Butler, acting pro bono under the auspices of the Bar Pro Bono Unit, and I am grateful to him for acting in this case pro bono for the Claimant. Mr West represented the Respondent, and I am grateful to both representatives for their careful skeleton arguments and their very helpful oral submissions.
- Flowing from the President's analysis on the Preliminary Hearing, there is really only one issue in this case, which is whether the ET erred in law in its approach to the Claimant's claim that she had been constructively unfairly dismissed. It appears to be common ground that if in fact the Claimant was constructively dismissed it would follow that that dismissal was unfair (see Bournemouth University Higher Education Corporation v Buckland  EWCA Civ 121,  ICR 908 at paragraph 47).
- I take the facts in outline, as there appears to be little dispute about them, from Mr Butler's helpful summary in the skeleton argument. The Claimant was employed by the Respondent as a Care Assistant in its nursing home ("the home") between 11 November 2011 and her resignation. She was contracted to work 18 hours a week, but until January 2013 she often worked for significantly more than 18 hours a week. In about September 2012 the Claimant became pregnant. She suffered from morning sickness and had to miss some days at work. She asked for her shifts to be moved from the morning to the afternoon. From 4 January 2013 her shifts were moved to the afternoon. However, without consulting her, the Respondent reduced her shifts from five to three per week. The upshot of this was a reduction in her monthly pay, and this in turn, as the ET were to find, meant that instead of qualifying for statutory maternity pay when she went on maternity leave the Claimant was instead only entitled to a maternity allowance.
- The Claimant was required to keep up to date with her training in order to continue working in the home. She missed some training sessions in January 2013. The final training session clashed with her 20-week scan, but the Respondent told her that she would have to attend the training on that day, would not have another opportunity to attend it and would be suspended from duty if she was not up to date with her training arrangements. The Claimant took two weeks' annual leave and started her maternity leave on 31 March 2013, earlier than she had intended, in order to avoid being suspended on those grounds.
- The information that the Respondent initially provided to the Claimant about her maternity pay was inaccurate. She was initially told that she would qualify for statutory maternity pay but because her earnings were not above the relevant threshold by the time she took her maternity leave she did not qualify for statutory maternity pay. She was therefore only entitled to a maternity allowance. The Respondent said that this was a mistake on its part and/or that it could not have known on the date when the original letter was sent that the Claimant would not in the event qualify for statutory maternity pay.
- The Claimant raised a grievance about several concerns, including the reduction in her shifts, on 22 October 2013. The Respondent appointed a Ms Rachel Banks to investigate the grievance. The Claimant was not happy with this as Ms Banks had been involved in the acts about which the Appellant had complained. There was a meeting with Ms Banks and a matron in November 2013, and the matter was referred to another manager, Ms Margaret Hill, who made a decision on the grievance without speaking to the Claimant. The Respondent acknowledged in its decision on the Claimant's grievance that the information that it had given about maternity pay had turned out to be inaccurate but said that that could not have been known at the time. The Respondent also acknowledged that there had been a delay in sending the Claimant the correct claim form for her maternity allowance. Apart from that, the Respondent dismissed the Claimant's grievance.
- The Claimant was unhappy with the outcome of the grievance. On 9 December 2013 she emailed the Respondent, seeking to appeal. The Respondent denied that it had received this email. The Claimant submitted a letter of resignation on 17 December 2013 giving two weeks' notice. The letter of resignation did not mention her grievance and gave various personal reasons for wanting to resign, including a desire to spend as much time as possible with her young son. She sent a letter to the Respondent on 13 January 2014 setting out the reasons for her appeal against the grievance. She did not respond to a request from the Respondent for further information made on 24 January, and as a result of that her grievance appeal was not decided by the Respondent.
- The way in which the Claimant put her case to the Tribunal is of some significance. I should therefore refer first of all to the Claimant's ET1. The Claimant ticked box 8.1, "I was unfairly dismissed (including constructive dismissal)", and she also ticked a box to say, "I was discriminated against on the grounds of pregnancy or maternity". She said that she was owed notice pay, holiday pay and arrears of pay. In box 8.2 on the ET1 the Claimant said that during the course of her employment she became pregnant and as a result suffered less favourable treatment. Following the word, in capitals, "Particulars", a number of complaints are set out, starting with her request to do afternoon shifts instead of morning shifts and being given three shifts instead of five without any reason despite more shifts being available. As a result, it was said, she suffered a substantial loss in her income. Further down the Particulars at 2.10 the ET1 says that throughout her employment "not being paid the correct rate of pay". The grievance is then referred to and the fact that it was not upheld. The ET1 says this:
"… On 31 December the Claimant terminated her employment with the Respondents [sic]. The said termination being a dismissal for the purpose of in accordance with section 95(1)(c) of the Employment Rights Act 1996 ["the 1996 Act"] which in all the circumstances was unfair. …"
- The Claimant, among other things, claimed damages for wrongful dismissal, damages for unfair dismissal and/or automatic dismissal under section 99 of the 1996 Act, and damages for discrimination.
- There are a number of passages in the ET's Decision that show how the ET understood that the Claimant was putting her case. The first is at paragraph 4 of the Decision, where the ET records that the Claimant relied on ordinary unfair dismissal pursuant to section 98 of the 1996 Act and contends that the Respondent was "in breach of the implied term of mutual trust and confidence by reason of the detrimental acts listed above, and that the claimant resigned in response to those alleged acts". The detrimental acts are those that are recorded higher up the page, at paragraph 1(1)-(8) of the ET's Decision. At paragraph 17 of its Decision the ET record that the Claimant took the view that the reduction in hours was "the first act of unfavourable treatment". They also record that no reason had been given for the reduction and that on the Claimant's case more shifts were available, her view was that she had just not been offered them and that this resulted in a large loss of income and affected her statutory maternity pay. At paragraph 24 the ET said in relation to the allegation that they were considering in that paragraph, "This allegation seems coupled with the fourth allegation". At paragraph 35 of the Decision the ET, having set out the contents of the Claimant's grievance letter dated 22 October 2013, said this:
"35. The letter concluded by saying that the campaign of discrimination and harassment constituted a continuing act which was ongoing and had caused their client to take early maternity leave and treatment for stress and depression while pregnant and to suffer financial loss."
- At paragraph 37 they referred to the fact that the Claimant was unhappy about the conduct of the grievance hearing, as she said that the people who conducted the hearing were "those two that had caused all of her complaints". At paragraph 54 of their Decision the ET recorded this passage from the Claimant's witness statement:
"By December 2013 I felt that I must resign and though I felt that I was constructively (dismissed). I decided to send a pleasant letter giving my notice in case I needed them to write me a reference."
- At paragraph 58 the ET recorded a submission made by the Claimant's then representative, Mr Broomhead, at the ET hearing in response to the ET having raised of its own motion the question of jurisdiction. The ET said that the Claimant's representative started his submissions:
"58. … by saying that he thought this point was so obvious that he did not need to mention it. There was, he submitted, a continuing act up to the claimant's resignation. It was a continuing act based on her pregnancy. The way in which the grievance was dealt with in 2013, if the allegations were asleep, woke them up. As to the delay, the claimant had her child and was more interested in the child. In simple terms, the claimant was in time and there was no problem. Time was resurrected by the grievance."**The ET's Decision in Outline**
- The ET set out the issues at paragraph 1 of its Decision, and it recorded that one of the detriments on which the Claimant relied was that throughout her employment (see the ET1) she had not been paid the correct rate of pay. The ET recorded that the Respondent had conceded that throughout her employment she had been paid 39p per hour less than her contractual rate. The Respondent said that that was a genuine administrative error and undertook to the ET to make this good (see paragraph 6 of the ET's Decision). Neither party was able to tell me at the hearing whether or not the Respondent had in fact complied with that undertaking made to the ET. The other complaints that are recorded in paragraph 1 of the ET's Decision, are the complaint that the Claimant had asked to be allocated shifts other than morning shifts and although she had been allocated them her hours had been reduced, although not below the contractual minimum of 18 hours per week, and the decision of the Respondent not to uphold the grievance dated 22 October 2013.
- The ET held that the reduction in shifts was discrimination on the grounds of pregnancy, but it also held that that claim was out of time and that it was not just and equitable to extend time for bringing that part of the claim. There is no appeal before me in relation to that aspect of the ET's Decision. The ET went on to reject the Claimant's claims that she had been unfairly dismissed.
- Section 18 of the Equality Act 2010 ("the 2010 Act") has effect for the purposes of the application of Part V (Work) to the protected characteristics of pregnancy and maternity. A person discriminates against a woman if during the protected period he treats her unfavourably because of her pregnancy or because of an illness related to it (section 18(2)). The protected period is defined in section 18(6). Section 39(2) makes it unlawful for a person to discriminate against an employee by dismissing her or by subjecting her to any other detriment. Dismissal includes constructive dismissal (section 39(7)(b)). Section 94(1) of the 1996 Act confers a right on an employee not to be unfairly dismissed. Section 95(1)(c) provides that dismissal includes constructive dismissal by providing:
"(c) the employee terminates the contract … (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct."
- There is no requirement in section 95 that the employee tell the employer that that is what he is doing. The effect of section 98 is that the employer must show what the reason for the dismissal was and that it is one of the reasons listed in section 92(2) or "some other substantial reason". If the employer discharges that burden, an ET has to consider whether the employer acted reasonably in all the circumstances in treating that reason as a sufficient reason for dismissing the employee having regard to equity and the substantial merits of the case (section 98(4)). As I have already explained, in the circumstances of this case, section 98 is of limited relevance.
- Section 99 was referred to by the ET in paragraphs 3, 69 and 88 of its Decision and, as I have mentioned, in the Claimant's ET1. It is headed "Leave for family reasons". Its effect is that a dismissal is automatically unfair if the reason or principal reason for it is of a proscribed kind or it takes place in prescribed circumstances. "Prescribed" for this purpose means prescribed in regulations made by the Secretary of State (see section 99(2)). The regulations made under section 99 relate to various types of leave for family connected purposes.
- I asked for help as to why the ET referred to section 99. I was told by Mr West that the Claimant had relied on it - and it is certainly true that she did so (see the ET1) - and that that was reflected in an Order made at a case management hearing. Nonetheless, as described by the ET, it is irrelevant to the issues in this case. It does not, contrary to the ET's apparent view as expressed in its Decision, confer a right on an employee not to be dismissed because she is pregnant. Its operation is tied to regulations made by the Secretary of State, and none are referred to by the ET in its Decision.
- I was referred to a number of relevant cases by the parties. The relevant principles were summarised by Dyson LJ, as he then was, in Omilaju v London Borough of Waltham Forest  EWCA Civ 1493,  ICR 481 at paragraph 14 in five propositions. The five propositions, reading from the judgment, are as follows:
"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  ICR 221.
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, Mahmud v Bank of Credit and Commerce International SA  ICR 606, 610E-611A (Lord Nicholls of Birkenhead), 620H-622C (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  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 [original emphasis].
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 Mahmud, at p 610H, 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 by Dyson LJ].
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 in Harvey on Industrial Relations and Employment Law, para DI:
"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." "
- At paragraph 16 Dyson LJ said this:
"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."
- At paragraph 19 he said:
"19. … The quality that the final straw must have is that it should be an act in a series whose cumulative effect is to amount to a breach of the implied term. I do not use the phrase "an act in a series" in a precise or technical sense. The act does not have to be of the same character as the earlier acts. Its essential quality is that, when taken in conjunction with the earlier acts on which the employee relies, it amounts to a breach of the implied term of trust and confidence. It must contribute something to that breach, although what it adds may be relatively insignificant."
- It is well known that the EAT's role in an appeal on a point of law is a very limited one. Where an ET has decided that conduct does not amount to a constructive dismissal - in other words, because there has not been any repudiation of the contract of employment - the EAT can only disturb that finding if there is an express misdirection or the decision is, in the technical sense of that term, perverse (see, for example, Woods, to which I have already referred). Mr West relied on those authorities in his submissions.
- In the Bournemouth case, the Court of Appeal held that if an employee repudiates the contract of employment he cannot cure that repudiation. In Jafri v Lincoln College  EWCA Civ 449,  ICR 920 the Court of Appeal considered the circumstances in which the EAT is obliged to remit a case to the ET. At paragraph 21 of the judgment Laws LJ, with whom the other members of the Court agreed, said:
"21. … It is not the task of the Employment Appeal Tribunal to decide what result is "right" on the merits. That decision is for the employment tribunal, the industrial jury. The appeal tribunal's function is (and is only) to see that the employment tribunals' decisions are lawfully made. If therefore the appeal tribunal detects a legal error by the employment tribunal, it must send the case back unless (a) it concludes that the error cannot have affected the result, for in that case the error will have been immaterial and the result as lawful as if it had not been made; or (b) without the error the result would have been different, but the appeal tribunal is able to conclude what it must have been. In neither case is the appeal tribunal to make any factual assessment for itself, nor make any judgment of its own as to the merits of the case; the result must flow from findings made by the employment tribunal, supplemented (if at all) only by undisputed or indisputable facts. Otherwise, there must be a remittal."**The ET's Reasoning About Constructive Dismissal**
- The ET set out the grievances raised in the Claimant's letter of 22 October 2013. One of the grievances that was relied on was that:
"Our client was promised more afternoon shifts due to her morning sickness. Our client's number of shifts per week were [sic] dropped without any reason causing a substantial loss in her income."
- The overall grievance was described as being that the Claimant had:
"… suffered less favourable treatment by reason of unlawful discrimination and harassment on grounds of pregnancy and maternity, contrary to equality and discrimination legislation. …"
- As I have already indicated, there was a grievance meeting between the Claimant and Ms Banks and a matron employed by the Respondent, who was not Liz Brotherton. What the Tribunal said about this was that, as I have already indicated, the Claimant (paragraph 37) "was obviously not happy with [it] as it was those two that had caused all of her complaints". As I have already indicated, the ET indicated at paragraph 40 of the Decision that the notes of the grievance meeting and other papers were gathered by Ms Banks and referred to Mrs Hill, who did not meet with the Claimant before considering the available information and writing to the Claimant with the outcome of the grievance.
- At paragraphs 42 to 50 of its Decision the ET set out in some detail the Respondent's decision on the grievance. At paragraph 42 the ET said this:
"42. As to the promise of more afternoon shifts and the number of shifts being dropped, Mrs Hill referred to the claimant being contracted for 18 hours a week. Matron allocated afternoon shifts as agreed. At no time throughout her employment were fewer than the contracted hours offered to the claimant."
- The ET recorded in paragraph 51 the following:
"51. The claimant, having received that letter [that is, the response to the grievance], was very unhappy with it because she felt that there were many things in it that were incorrect and some that had been made up. …"
- She then appealed, as the ET recorded in the remainder of paragraph 51. The ET found that the Claimant sent an appeal by email on 9 December 2013 and that this included the allegation that the grievance was not conducted in good faith and was not transparent. The ET went on to record at paragraph 53 that the Respondent did not accept that it had received that email, and the ET said in paragraph 54 that according to her witness statement the Claimant said:
"By December 2013 I felt that I must resign and though I felt that I was constructively (dismissed). I decided to send a pleasant letter giving my notice in case I needed them to write me a reference."
- It is clear from paragraph 55 that that resignation letter was written on 17 December 2013 and that in the letter of resignation the Claimant gave two weeks' notice. The ET went on to say in paragraph 57 of the Decision that the Claimant had submitted a letter on 13 January 2014 - that is after, on any view, the contract had come to an end - setting out reasons for her appeal and that that had been referred to a manager of the Respondent, who said that although it was six weeks outside of the timeframe he was prepared to hear an appeal. He wrote to the Claimant on 24 January 2014 asking for further information, but the Claimant did not supply any further documents, and as a result there was no decision on her appeal.
- In paragraphs 82 and following the ET considered what it described as the next issue, which related to "the decision of the respondent not to uphold a grievance on 5 December 2013". The ET said that the decision of the Respondent had been set out above and although the majority of issues were not upheld the Respondent did proffer two apologies, and on that basis the ET concluded that the Claimant's grievance had been partially upheld. The ET then asked itself the question (paragraph 83):
"83. Has the claimant satisfied us that the outcome of the grievance was unfavourable to her because of her pregnancy or because she was exercising the right to ordinary or additional maternity leave?"
- At paragraph 84 they answered that question. The ET said that the matters raised in the grievance obviously related to the Claimant's pregnancy and maternity leave but just because they so related did not mean that when finding that when the Respondent dismissed the grievance the Respondent was treating the Claimant unfavourably for the purposes of section 18. They then said this:
"84. … The procedure adopted by the respondent to deal with the grievance might have been better, and in particular someone other than Rachel Banks might have been involved in connection with the initial investigation, but we do not find that the claimant has proved facts from which we could decide that the respondent has treated the claimant unfavourably because of pregnancy or maternity in relation to the grievance procedure or its outcome."
- Having dealt with that aspect of the claim, the ET went on to consider a second aspect of the claim. In paragraph 85 of its Decision the ET said this:
"85. The next contention of the claimant is that the termination of her employment by resignation amounted to a constructive dismissal pursuant to section 95(1)(c) on the basis that she was compelled to resign because of discriminatory treatment related to her pregnancy."
- The ET went on to consider that aspect of the claim as analysed by the ET at paragraphs 86 and 87. The ET said this:
"86. Having reached the conclusion that we have in relation to the previous item concerning the failure to uphold the grievance, we are not satisfied that what occurred with regard to the grievance procedure amounted to circumstances in which the claimant was entitled to terminate the contract by reason of the employer's conduct. We have accepted that the respondent could have dealt with the grievance in a better manner. However, the claimant was offered the right of an appeal against the grievance outcome. She attempted to exercise it very shortly after the grievance was dealt with in an email that does not appear to have arrived with the respondent. Thereafter she resigned without awaiting the outcome of the appeal which she believed she had instigated. Further, if the claimant submits that she was compelled to resign because of discriminatory treatment related to her pregnancy, we have found that the discriminatory treatment that related to her pregnancy occurred in December 2012, January and February 2013, thus leading us to the conclusion that the claimant delayed too long before resigning in response to those matters in December 2012.
87. As to the subsequent decision by the respondent not to uphold the claimant's grievance appeal, we have found as a fact that the respondent did not reach any decision on the claimant's appeal in the absence of the claimant responding to a letter seeking further information about her appeal."
- The third aspect of the Claimant's claim that the ET considered was dealt with in paragraph 88 of its Decision. It said this:
"88. Turning now to look at automatically unfair dismissal under sections 99(1) and (3)(a) of [the 1996 Act], it is for the claimant to satisfy us that she was compelled to resign because of detriments which occurred in relation to her pregnancy. For the reasons set out above we do not find in favour of the claimant in connection with this. The claimant resigned following the grievance outcome. The alleged detriments themselves had occurred some months previously."
- At paragraph 89 the ET dealt with a fourth claim that it considered had been made by the Claimant. The ET said this:
"89. In the alternative the claimant relies on ordinary unfair dismissal on the basis of a breach of the implied term of mutual trust and confidence by means of the detrimental acts set out. The various findings that we have made already, and in particular in relation to automatically unfair dismissal, lead us to a finding that the actions of the respondent were not such as to be in breach of the implied term of mutual trust and confidence and/or that the claimant had delayed for too long before resigning in respect of the other matters complained of. The claimant may have resigned because she was not happy with the outcome of the grievance but this was prior to the respondent being given the opportunity to deal with the grievance appeal and was not reflected in her resignation."**Discussion**
- The framework for the ET's Decision on this issue is its finding that the reduction in shifts that the Claimant had suffered before she went on maternity leave amounted to discrimination on the grounds of pregnancy, that she had raised a grievance about this and that that grievance had been dismissed by her employer shortly before she resigned (see paragraphs 74, 34 and 42 of the Decision). In other words, the Claimant resigned after the employer wrongly rejected that grievance. The grievance was not trivial, as, on the ET's findings, the reduction in shifts affected the Claimant's income significantly and also meant that she did not qualify for statutory maternity pay. Wrongly to reject such a grievance is a significant matter. However, it features nowhere in the ET's analysis of the question whether there was a breach of the implied term of mutual trust and confidence. The background also included the fact that the Claimant had systematically and significantly been underpaid while employed, as the employer had conceded, to the extent of 39p per hour less than her contractual rate. The authorities suggest that such a breach of contract if persisted in can amount in and of itself to repudiation (see Cantor Fitzgerald International v Callaghan and Ors  ICR 639 CA). This background factor, other than being noted right at the beginning of the ET's Decision, features nowhere in the ET's analysis of whether there had been a repudiation of the implied term of mutual trust and confidence. As I have already recorded, the ET's understanding of the relevance of section 99 is mistaken. It is not relevant to the issue in this case, because it does not confer a right not to be unfairly dismissed on the grounds of pregnancy and maternity, and the fact that it was being relied on in the ET1 does not, in my judgment, excuse the error that the ET has made in suggesting that section 99 confers a right not to be unfairly dismissed on the grounds of pregnancy or maternity.
- The ET, as I have indicated, considered four claims, in the following order, whether: (1) the outcome of the grievance was discrimination on grounds of pregnancy or maternity; (2) the Claimant had been compelled to resign because of discriminatory treatment on those grounds; (3) she had been automatically unfairly dismissed pursuant to section 99; and (4) she had been constructively dismissed. The order in which the ET dealt with these issues was illogical. The first question, logically, was whether the Claimant had been constructively dismissed or not. If she had not been constructively dismissed, no question of a discriminatory dismissal could possibly arise. In my judgment, the ET fell into error by failing to deal with the questions in their proper logical order. It put the analytical cart before the horse. The consequence of that was that it confused questions of discrimination with questions of contract and did not separate them out. This led it to apply its reasoning in paragraphs 86 and 87 of its Decision to the logically anterior question that it tried to answer in paragraph 89 of its Decision. In paragraph 86 the ET linked its conclusion that the grievance outcome was not pregnancy-related discrimination to its conclusion that "what occurred with regard to the grievance procedure" did not amount to "circumstances in which the claimant was entitled to terminate the contact by reason of the employer's conduct".
- The ET accepted that the employer "could have dealt with the grievance in a better manner", but that was mitigated, it appears the ET thought, by the fact that the Respondent offered a right of appeal against the grievance outcome. The Claimant, the ET said, resigned without waiting for the outcome of that appeal. The ET dealt with her argument that she was compelled to resign because of discriminatory treatment by saying that that had occurred months before:
"86. … leading us to the conclusion that the claimant delayed too long before resigning in response to those matters in December 2012."
- In relation to the supposed section 99 claim, the ET repeated the point that the Claimant resigned following the grievance outcome but that the "alleged" detriments had occurred some months previously (see paragraph 88). At paragraph 89 the ET turned to what it referred to as "ordinary unfair dismissal" based on the breach of the implied term of trust and confidence. The various findings that they had already made led them to a decision that:
"89. … the actions of the respondent were not such as to be a breach of the implied term of mutual trust and confidence and/or that the claimant had delayed for too long before resigning in respect of the other matters complained of. The claimant may have resigned because she was not happy with the outcome of the grievance but this was prior to the respondent being given the opportunity to deal with the grievance appeal and was not reflected in her resignation."
- Five points in particular are clear from this approach. The first is that the ET entirely failed to appreciate the significance of its finding of discrimination in relation to the reduction in shifts for the soundness of the Respondent's decision on the grievance. It significantly understated the central flaw in the decision on the grievance by suggesting that it "could have been handled better". In my judgment, that is a potentially material error of law.
- The second point is that there is no reference anywhere in the Decision other than in the introductory paragraphs to the history of underpayment and to its significance to the contractual analysis. That too, in my judgment, is a potentially material error of law.
- The third is that the ET appears to have thought that the fact that no appeal was pursued and no decision made on an appeal was in some way relevant to the question of constructive dismissal. The ET referred to this point twice in its reasoning. As a matter of logic, that cannot be right. It is elementary that if there has been a repudiation of a contract, whether that repudiation consists of one act or whether it is the result of an accumulation of acts, that cannot be remedied by an appeal. The facts in relation to the appeal on which the ET relied happened after, on any view, the contract had come to an end; with the exception of the December appeal email, which the Respondent said it had not received. It is impossible to see how that could be relevant to the ET's analysis of whether or not the contract had been repudiated. That too is a potentially material error of law.
- The fourth factor is that the ET did not ask itself whether the grievance outcome coupled with what had happened before could have amounted to a repudiation of the contract of employment; in other words, whether the grievance outcome, even if it was not in and of itself a repudiatory breach, could have amounted to the last straw when coupled with the matters to which I have already referred. That too is a potentially material error of law.
- The fifth is that the ET thought that it was relevant that the Claimant had not mentioned the grievance outcome in her resignation letter. There is no such requirement. That too is irrelevant and a potentially material error of law.
- So, the ET's decision is flawed by five potentially material errors of law. The next question is: would the ET's decision have been the same if it had directed itself correctly in relation to those five matters? I have no confidence that it would. Quite apart from any other point, the ET has simply not factored into its reasoning its conclusion that the Claimant's complaint that she had suffered a detriment on grounds of pregnancy when her hours were reduced was a well founded complaint. The fact that the Respondent had rejected that well founded grievance might well, when taken with the discrimination that had occurred when the hours were reduced and with the history of significant underpayment, amount to a breach of the implied term of trust and confidence. I have no doubt that an ET on those facts would have certainly been entitled to make such a finding. I do not have to go further than this at this stage. It seems to me that the five potentially material errors of law that I have referred to are in fact material errors of law and that I must therefore allow this appeal.
- The next question is whether I should then remit the case to the ET for the ET to make further findings. Mr West submitted that it would be open to an ET properly directing itself in law to find that the contract of employment was not repudiated and, if that were wrong, it would be open to an ET properly directing itself in law to find that the Claimant did not resign in response to any such repudiation and that for either or both of those reasons the only proper course would be for the case to be remitted to the ET.
- I reject both submissions. I have already described the significance of the grievance to the relationship of the employer and employee as a whole. The discrimination that the ET found had very significant immediate effects on the Claimant's pay and the consequence that she did not qualify for statutory maternity pay. The Respondent had wrongly, on the ET's own findings, rejected that grievance, relying on its strict contractual rights. Against the background of the discrimination that the ET held had occurred and the history of underpayment, I do not consider that it would be open to any ET properly directing itself in law to hold that the Respondent had not repudiated the contract whether the grievance decision was a repudiation by itself or the last straw in a series of acts calculated to undermine the relationship of trust and confidence.
- Nor can I see how on the findings of this ET it would be open to an ET properly directing itself in law to hold that the Claimant did not resign in response to what was either itself a repudiation - that is, the decision on the grievance - or the last straw in a sequence of acts that cumulatively amounted to a repudiation of the contract. Mr West submitted that it would be open to the ET to find that the Claimant had resigned because her December appeal email had not been responded to. That is not what her witness statement said or what the ET appears to have found. The appeal that was received by the employer was not submitted until after the contract had come to an end so could not on any view be relevant.
- For those reasons, I hold that this is one of those rare cases where I am able on the ET's findings and on other undisputed facts to decide what the decision of the ET must have been if it had directed itself correctly in law. I therefore substitute for the decision that the Claimant was not constructively dismissed the finding that she was constructively dismissed and that that constructive dismissal was unfair. The case will be remitted to the ET for it to decide on the appropriate remedy. The sorts of considerations that might have applied if the case were being remitted to the Tribunal for it to reconsider issues about the substance of the claim do not arise if what is happening is that the case is being remitted to the Tribunal for the Tribunal to deal with remedy. So, I shall not order that it should go to any particular Tribunal or not go to any particular Tribunal; I shall just say that it should be remitted to the Employment Tribunal. If it is the same Tribunal so be it, and if it is not the same Tribunal, so be it.
Published: 04/07/2016 13:49