The claimant claimed that he been constructively dismissed, the circumstances of which included a failure by the respondent in dealing with his grievance. The claimant’s proposed retirement was postponed pending the outcome of his grievance and he was off sick until he resigned several months later. The Tribunal concluded that the respondent had breached their target in respect of dealing with the grievance within the time limit but it was not a fundamental breach of the procedure. Even though the delay in dealing with the grievance was unsatisfactory, it did not amount to a breach of the implied term of mutual trust, the finding of which required a very significant breach (Claridge v Daler Rowney Ltd applied). The claimant appealed.

At the EAT, counsel for the claimant submitted that the Tribunal had incorrectly applied the approach taken by Elias J in Claridge because it had been expressly disapproved by the Court of Appeal in Buckland. The EAT agreed; the ET had misdirected themselves in law by reference to the former President’s approach in Claridge.

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Appeal No. UKEAT/0518/10/JOJ

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 7 April 2011

Before

HIS HONOUR JUDGE PETER CLARK

MR J D EVANS CBE

DR B V FITZGERALD MBE LLD FRSA

MR C PRICE (APPELLANT)

COMMISSIONERS FOR REVENUE & CUSTOMS (RESPONDENT)

Transcript of Proceedings

JUDGMENT

For the Appellant
MR GORDON MENZIES (of Counsel)
Instructed by:
Messrs Baileyfields Solicitors
Thorne Estate Business Park
Forge Hill
Bethersden
TN26 3AF

For the Respondent
MR TARIQ SADIQ (of Counsel)
Instructed by:
HM Revenue and Customs Solicitor's Office
Commercial & Employment Team
Rm 2C/16
100 Parliament Street
London
SW1A 2BQ

UNFAIR DISMISSAL – Constructive dismissal

Constructive Dismissal – implied term of trust and confidence. Employment Tribunal having been referred to Buckland (CA), nevertheless applied Claridge approach (Elias P), disapproved in Buckland – Appealed allowed and case remitted to the same Employment Tribunal for reconsideration

1. The principal issue in this appeal is whether the Ashford Employment Tribunal (Employment Judge Wallis, Mrs J Alderton and Ms J Diamond) failed to apply the correct legal test to the facts of this constructive unfair dismissal claim brought by Mr Price (the Claimant) against his former employer, the Commissioners for Revenue and Customs (the Respondent). The Tribunal dismissed that claim by a reserved judgment with reasons promulgated on 19 August 2010. Against that judgment the Claimant now appeals.

1. The Claimant commenced his employment with the Respondent on 10 November 1975. That employment ended with his resignation effective on 14 September 2009. The Claimant contended that he resigned in circumstances amounting to constructive dismissal. The circumstances said to amount to a repudiatory breach by the employer of the implied term of mutual trust and confidence in response to which the Claimant contended he had resigned were as follows:

(1) delay in dealing with the Claimant's grievances (the grievance delay),

(2) failure to consider the Claimant's welfare in respect of excessive working hours,

(3) job-share pressure and (4) cessation of his sick pay in September 2009.

1. As a matter of fact, the Tribunal rejected the last three complaints, leaving only the grievance delay. As to that, the Tribunal found the following facts.

(1) The Claimant sent a written grievance by email to his line manager, Stephen Clement, dated 23 February 2009.

(2) His proposed retirement date, 2 March 2009, at age 60 was postponed pending the outcome of his grievance. He was at all relevant times absent from work by reason of ill health.

(3) The Respondent's target period for determining grievances, excluding any subsequent internal appeal, was 55 days. The target date, 20 May 2009, was not met (reasons, paragraph 64).

(4) An investigation into his grievance was carried out by Ms Lemon and Mr McMillan. Their report was sent to the decision-maker, Mr Martin, on 5 June 2009. He received the report in the middle of June. Before he could meet with the Claimant, his mother was taken very ill. As a result, he took leave to be with her in late July and early August. No complaint is made by the Claimant of that short period of delay. Mr Martin took a fortnight's holiday from 17 August and, following his return to work, became absorbed in other work and did not write to the Claimant to introduce himself until 18 September 2009. By then the Claimant had resigned.

1. Against that factual background, the Tribunal reached the following conclusions at paragraphs 106 and 114. At paragraph 106 the Tribunal concluded that the breach of the target timetable in respect of the grievance procedure was not a fundamental breach of that procedure and although it was unsatisfactory, particularly because the Claimant was not kept informed of developments (or lack of them), it did not amount to a breach of the implied term of mutual trust. The Tribunal noted that any breach of that implied term is fundamental.

1. At paragraph 114, the Tribunal concluded that it could not say that the Respondent had without reasonable and proper cause conducted itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between the Respondent and the Claimant. In respect of the four issues, there was reasonable and proper cause for the Claimant's working hours which were not excessive, for the deferral of the Claimant's application for part-time work/job-share and for the cessation of statutory sick pay. In respect of the delay in the grievance process, the Tribunal concluded that there was no reasonable and proper cause for that delay. Nevertheless, the Tribunal concluded that the delay that had taken place by the time the Claimant resigned was not conduct which was calculated or likely to destroy or seriously damage the relationship of confidence and trust. The Claimant himself accepts that Mr Martin had reasonable and proper cause for the delay in respect of the emergency leave he took to attend to a seriously ill mother. If that period of time is removed from the equation, the Tribunal concluded that the remaining delay, whilst no doubt irritating and frustrating, did not:

"... fall so far below that which it considers reasonable that it entitles the employee to say that he should not be required to remain in employment. To reach that finding requires a very significant breach (Claridge above)."

1. The curious feature of this case is the Tribunal's approach to the law of constructive dismissal. At paragraph 9 they said:

"The Tribunal also had a skeleton argument from Mr Sadiq on behalf of the respondent. With that skeleton argument he produced copies of the following cases: Malik & Anr v BCCI SA (in liquidation) [1997] ICR 606, Claridge v Daler Rowney Ltd [2008] ICR 1267, Buckland v Bournemouth University Higher Education Corporation [2010] IRLR 445, Western Excavating (ECC) Ltd v Sharp [1978] IRLR 27, Abbey National plc v Fairbrother [2007] IRLR 320 and Omilaju v Waltham Forest London Borough Council [2005] ICR 481."

1. Mr Sadiq, appearing on behalf of the Respondent before us as he did below, has produced a copy of his written skeleton argument which he submitted to the Employment Tribunal. At paragraphs 5 to 8 under a heading "The legal principles", he correctly referred to the implied term of trust and confidence test approved by the House of Lords in Malik v BCCI. He also correctly pointed out that the range of reasonable responses espoused by the EAT (Lady Smith presiding) in Abbey National v Fairbrother had been rejected by the Court of Appeal in Buckland. He did not at that point in the written argument also point out that the approach of Elias J (President) in Claridge, specifically at paragraph 30 of the President's judgment in that case, had also been expressly disapproved by the Court of Appeal in Buckland per Sedley LJ at paragraph 27. Later at paragraph 20 of his written submissions, Mr Sadiq cited paragraphs 54 and 59 of the President's judgment in Claridge, setting out paragraph 54 in full.

1. When setting out the law to be applied (paragraphs 96 to 102 of their reasons), for reasons which are not immediately apparent to us, the Tribunal refer at paragraph 99 to my judgment in Buckland [2009] IRLR 606 (EAT/0492/08), but not to the Court of Appeal decision in Buckland to which Mr Sadiq very properly referred them, as recorded at paragraph 9 of their reasons. Although the EAT's statement of the law at paragraphs 24 to 46 is material simply because it was endorsed by the Court of Appeal (paragraph 22 per Sedley LJ), the EAT decision is otherwise superseded by that of the Court of Appeal.

1. Put shortly, Mr Menzies, who also appeared below, submits on behalf of the Claimant that at paragraph 114 of their reasons the Tribunal incorrectly applied the approach taken by Elias J in Claridge (paragraph 30, the passage cited by the Tribunal at the end of paragraph 114 of their reasons) because it has been expressly disapproved by the Court of Appeal in Buckland (see paragraph 27 per Sedley LJ).

1. Mr Sadiq has sought to persuade us that, looked at overall, the Tribunal has not fallen into error but has applied the unvarnished BCCI test, as I characterised it in Buckland, approved by the Court of Appeal (see paragraph 22 per Sedley LJ). On the question as to whether the Tribunal were wrong in law to adopt the passage in Claridge (paragraph 30) at paragraph 114 of their reasons, Mr Sadiq submits that perhaps Sedley LJ made an error in referring to paragraph 30 of Claridge and really meant to refer to paragraph 31 of Claridge.

1. We cannot accept that submission. Whilst the concept of reasonableness is relevant to the breach of the trust and confidence term issue, as Sedley LJ made clear at paragraph 28 of Buckland, its relevance is limited to the question of whether the employer had reasonable and proper cause for the conduct complained of by the employee, not to the further question as to whether, absent reasonable and proper cause, the conduct was calculated or likely to destroy or seriously damage the relationship of trust and confidence.

1. We prefer the submission of Mr Menzies. It is quiet clear to us that this Tribunal put the test for breach of the implied term of trust and confidence too high. They followed the approach in Claridge (paragraph 30) disapproved, we are satisfied, by the Court of Appeal in Buckland (paragraph 27). The correct approach was for the Tribunal to determine, applying the BCCI test, whether this employer without reasonable and proper cause conducted itself in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence between employer and employee. In altering the word "and" in Lord Stein's formulation in BCCI to "or", I adhere to what I said in Baldwin v Brighton and Hove City Council [2007] ICR 680 and endorse this Tribunal's disjoinder of the expressions "calculated" and "likely" at paragraph 100 of their reasons.

1. At paragraph 114 the Tribunal answered the first part of the Malik question in favour of the Claimant: there was no reasonable and proper cause for the delay in dealing with his grievance. The second part of the question is whether the delay between 23 February and 14 September 2009, excluding the short period of time in late July and early August when Mr Martin was attending his sick mother, was conduct by the employer calculated or likely to destroy or seriously damage the relationship of trust and confidence between the parties. That question is not to be answered by reference to the standard of the reasonable employer (compare Claridge and Fairbrother).

1. A further issue is raised before us as to the factual extent of the delay. We obtained the Employment Judge's relevant notes of evidence at short notice, for which we are grateful. It appears to have been the Claimant's evidence that he complained of delay from May (presumably 5 May when the investigation report was sent to Mr Martin) until late July when he took compassionate leave to be with his mother and from early August when that reason for delay ended until the Claimant's resignation on 14 September. However, it is for the Employment Tribunal to evaluate the evidence and reach its findings of fact, not the EAT.

1. We have concluded that on the face of the Tribunal's reasoning at paragraph 114 they have misdirected themselves in law by reference to the former President's approach at paragraph 30 of Claridge. In these circumstances, the appeal is allowed.

1. Mr Menzies asks us to substitute a finding of constructive dismissal and then remit the matter to a fresh Tribunal for remedy, no question of a fair dismissal having been raised by the Respondent in their form ET3. We decline to take that course. We agree with Mr Sadiq that a factual question remains in relation to the grievance issue only: whether the Respondent's conduct in that respect breached the Malik term. Even if it did, there is a further question as to whether the breach was a cause, not necessarily the sole cause, of the Claimant leaving his employment. If constructive unfair dismissal is found, questions then arise as to remedy, including the Polkey question, which are for the Employment Tribunal.

1. A further issue arises as to whether the case on this basis ought to be remitted to the same or different Tribunal. Mr Menzies submitted that it should go to a fresh Tribunal, the Wallis Tribunal having made firm findings of fact against the Claimant elsewhere in their judgment. However, we prefer the submissions of Mr Sadiq that the case should return to the same Tribunal. There are no complaints of apparent bias in this appeal. That Tribunal is seized of the facts, having heard the evidence in July last year, and it would be proportionate for the matter to return to that Tribunal in these circumstances.

1. Accordingly, the appeal is allowed and the matter remitted to the same Tribunal for reconsideration in the light of our judgment. Because the case is being remitted, we will direct that there should be a transcript of our judgment.