Appeal No. UKEAT/0361/08/MAA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 16 March 2009

Before
HIS HONOUR JUDGE McMULLEN QC
MR M CLANCY
MR B M WARMAN

MR E MUSCHETT	APPELLANT

PARKWOOD HEALTHCARE	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR E MUSCHETT
(The Appellant in Person)	
For the Respondent	MR RICHARD HIGNETT
(of Counsel)
Instructed by:
Messrs Weightmans LLP Solicitors
First Floor Peat House
1 Waterloo Way
Leicester  LE1 6LP	

SUMMARY
UNFAIR DISMISSAL:  Constructive dismissal
The Employment Tribunal did not approach the question of constructive unfair dismissal in a last straw case by reference to the steps in Omilaju.  To take an analytic approach and ask of each event whether the Claimant had proved a breach or fundamental breach of contract was an error. Appeal allowed.  Remitted to a fresh Employment Tribunal.  ACAS recommended.

HIS HONOUR JUDGE McMULLEN QC
1.	This case is about constructive unfair dismissal.  The judgment represents the views of all three Members.  We will refer to the parties as the Claimant and the Respondent.

Introduction
2.	It is an appeal by the Claimant in those proceedings against the judgment of an Employment Tribunal sitting at Watford over two days, registered with reasons on 28 January 2008 under the chairmanship of Employment Judge Mordsley.  The Claimant claimed that unauthorised deductions had been made from his wages and that he had been constructively unfairly dismissed.  The Respondent accepted in part the claim for unauthorised deductions prior to the hearing and resisted the allegation that the Claimant had been dismissed.  

3.	The essential issue was to determine the constructive dismissal point.  The Tribunal found against the Claimant on both heads.  The appeal of this case has gone through a number of case management handlings by judges in the EAT so that the issue as we have refined it, pursuant to a ruling we made earlier today, consists solely of an appeal against the adverse finding on constructive unfair dismissal.

The legal principles
4.	The Tribunal does not cite the relevant legislation which is section 95(1)(c) Employment Rights Act 1996:
“95	Circumstances in which an employee is dismissed
  (1)	For the purposes of this Part an employee is dismissed by his employer if …
(c)	the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer’s conduct.”

Nor does it cite the relevant parts of the judgment of Lord Denning MR in Western Excavating (ECC) Ltd v Sharp [1978] ICR 221, 226 which it alluded to.  Its adoption and restatement is in Lewis v Motorworld Garages Limited [1985] IRLR 465 (CA), where Glidewell LJ said this at para 37:
“If the employer is in breach of a contract of employment, of such seriousness that the employee would be justified in leaving and claiming constructive dismissal, but the employee does not leave and accepts the altered terms of employment; if subsequently a series of actions by the employer might constitute together a breach of the implied obligation of trust and confidence; is the employee then entitled to treat the original action by the employer which was a breach of the express terms of the contract as a part - the start - of the series of actions which, taken together with the employer's other actions, might cumulatively amount to a breach of the implied terms? In my judgment the answer to this question is clearly 'yes'.”

The authorities on the last straw doctrine in constructive dismissal were reviewed by HHJ Peter Clark and members in Gab Robins (UK) Ltd v Triggs UKEAT/0111/07 at paragraph 32, where this appears.  

“32.	We derive the following principles from Omilaju: ([2004] AER 129)
(1)	the final straw act need not be of the same quality as the previous acts relied on as cumulatively amounting to a breach of the implied term of trust and confidence, but it must, when taken in conjunction with the earlier acts, contribute something to that breach and be more than utterly trivial.
(2)	Where the employee, following a series of acts which amount to a breach of the term, does not accept the breach but continues in the employment, thus affirming the contract, he cannot subsequently rely on the earlier acts if the final straw is entirely innocuous.
(3)	The final straw, viewed alone, need not be unreasonable or blameworthy conduct on the part of the employer.  It need not itself amount to a breach of contract.  However, it will be an unusual case where the ‘final straw’ consists of conduct which viewed objectively as reasonable and justifiable satisfies the final straw test.
(4)	An entirely innocuous act on the part of the employer cannot be a final straw, even if the employee genuinely (and subjectively) but mistakenly interprets the employer’s act as destructive of the necessary trust and confidence.”

Although that case was the subject of attention by the Court of Appeal [2008] EWCA Civ 17, constructive dismissal was not considered and the above therefore remains good law.

The facts
5.	The Tribunal found the following facts: it has to be said that there are some errors in this judgment which we have not been able to resolve.  The first is an indication that this case has been the subject of “Various decisions in the Employment Appeal Tribunal”.  In fact it has been the subject of one, a judgment of HHJ Burke QC dismissing various other matters.  But there is no substantive judgment of the EAT on the subject of constructive unfair dismissal for if the Tribunal were referring to Judge Burke’s judgment that was pre-dismissal and therefore not relevant, save for certain aspects which occurred during the course of the employment.

6.	The second thing to note is that we have had to turn to the chronology provided by Mr Richard Hignett, who appears for the Respondent but who did not appear below, in order to understand the sequence of events.  The Tribunal has not in this case followed the sequence set out in Rule 30.  It is not an error not to do that but nor has it provided in a structured way a description of the relevant events.  In particular, the reference to a grievance which is cited many times in this judgment is, we have been told today, to do with a grievance brought by the Claimant about what he described as verbal assault.  But during the course of that grievance we are told other grievances arose to do with, so far as is relevant today, pay issues.  

7.	The grievance took some time to resolve but was resolved against the Claimant in January 2006.  And other issues which the Claimant had raised during the course of that grievance, or in parallel complaints were not resolved by the time the Claimant tendered his resignation letter dated 23 March 2006 following a meeting on that day.  It is important to refer to that letter since the Tribunal does not cite it:  
“I am tendering my resignation i.e. constructive dismissal as I feel I have come to the end of the line, with a substantial b reach of contract, in regard to terms of contract, pay issues and a breach of company policy, as well as minor health and safety issues.  I state that my position has become quite impossible with senior staff and line management making me out to be a liar.”

8.	The Respondent’s response post-employment is to say that the matters had not been raised earlier but the Claimant has drawn attention to the evidence put before the Tribunal when it is plain that issues did arise during the course of his grievance and it is accepted by Mr Hignett that pay issues were alive as early as December 2005.

9.	The Tribunal found that the reason for the Claimant leaving his job was dissatisfaction at the outcome of the grievance.  During the course of the grievance, which the Tribunal acknowledged had taken longer than was proper, but did not itself constitute a breach of contract, the Claimant’s “word had been doubted” and he took this matter seriously.

10.	The Tribunal took an analytic approach to six issues which the Claimant had put before it as constituting reasons for his leaving.  They are in summary: issues to do with overtime and other time not paid for; relocation; lack of consultation on relocation; the company vehicle and health and safety issues.  Mr Hignett acknowledges that at least in respect of one of those, the health and safety issue, the Tribunal has misdirected itself in law for it required the Claimant to establish that there was a fundamental breach of contract in this matter.  

11.	In other responses of the Tribunal a lower threshold was imposed but nevertheless Mr Hignett acknowledges that the Tribunal erred, for in respect of the location, consultation and vehicle points, the Tribunal has looked at whether there was a breach of contract and having found there was none took the matter no further.  

12.	As to what is broadly described as the “pay issues” the overtime points were found against the Claimant and these are no part of the appeal today. There were three separate days as to which the Tribunal made no particular finding; they relate to April and July 2005.  They were out of time.  The Tribunal does not consider whether or not those out of time matters could have constituted some substance towards the Claimant’s ultimate resignation on what he said was “a breakdown of mutual trust”.

13.	As to the other aspect of the pay issues, the Tribunal upholds the Claimant.  The Respondent had already given in to the Claimant’s claim about the November 2005 failures to pay for three days.  It acknowledges that it could possibly be a breach of contract, for there can be no more serious a breach than failure by an employer to pay wages. In the context it did not constitute a reason for the Claimant to take this as a fundamental breach of contract.  That on its own again is a misdirection, for the Tribunal was not looking to see whether there was a fundamental breach of contract in the pay issue alone, nor even a breach of contract. Yet here it did have a breach of contract and a breach of the statute.  

14.	The result of the Tribunal’s reasoning was that the principal reason for the Claimant’s decision to leave was the grievance going against him.  It is acknowledged that the Claimant did not say in his grievance letter a good deal about the pay issues, but the Tribunal comes to this conclusion: 

“8.	 Even in the resignation letter the Claimant says that one of the issues he is resigning relates to pay issues.  That is not very clear and it could mean a number of matters.  It is necessary in our view for that to have been specified and this was not done.”

15.	Again, very fairly, Mr Hignett, on behalf of the Respondent, accepts that that is a very difficult proposition for him to support.  There is no legal requirement for there to be a specification of the pay issues, particularly as the Respondent, shortly before the Employment Tribunal hearing, acknowledged the force of the Claimant’s claim in respect of the three unpaid days in November 2005 and made payment.  On the basis of those findings the Tribunal came to this overall conclusion: 
“10.	We do not think that the Respondent has done absolutely everything it could have done in this case as surely there were matters that could have been resolved more readily but ultimately we do not believe that it acted in such a way as to constitute a fundamental breach of contract and which would justify the employee, the Claimant, bringing a case of constructive dismissal.  In those circumstances the claim is dismissed.”

Submissions
16.	Mr Muschett represented himself, and as he did before HHJ Burke QC.  We acknowledge that he is a litigant in person albeit he is highly experienced in Employment Tribunal and EAT proceedings for at the present time there are on record at least seven appeals made by him which have until today all been dismissed by a sequence of nine judges and the Registrar, one of whom was me.

17.	What he contends is contained in a re-amended grounds of appeal drafted on his behalf by Counsel, who appeared at an earlier hearing before HHJ Birtles, and they are in three parts.  The first is that the Tribunal found a delay and that this should have constituted a breach.  The second, that the Tribunal wrongly characterised the grievance inasmuch as the letter of resignation cited also pay issues, and that the grievance should not have been dissociated so as to draw a distinction between the grievance and the way in which it was handled.

18.	Also the Tribunal failed to pay attention to the fact that there was a finding in respect of pay issues in the Claimant’s favour.  Finally, the Tribunal wrongly searched for breaches of contract when this is contrary to the finding of the Court of Appeal in Omilaju v Waltham Forest London Borough Council [2004] AER 129 to the effect that a prejudicial act which is not itself a breach of contract can support a final straw under a constructive dismissal claim.  

19.	On behalf of the Respondent it is contended that the issue of delay is a highly fact‑sensitive matter for the attention of the Employment Tribunal.  While acknowledging that there are errors of law in this judgment it is contended that it is unarguably right for the Tribunal has made a firm finding of fact as to the reason why the Claimant left, namely the outcome of the grievance hearing.  In all the circumstances the Tribunal reached the correct decision.

Considerations
20.	In our judgment this Employment Tribunal judgment has too many errors for us to uphold the submission that it is nevertheless unarguably right.  In at least four paragraphs the Tribunal searches in vain for a breach of contract. That is not the approach in Omilaju.  In certainly one of the events said to constitute a series leading to a final straw, and possibly two of them, the search for a fundamental breach of contract is fatally flawed.

21.	That casts doubt upon the simple question the Tribunal was required to answer which was: did the whole of the events, whether breaches of contract or something lesser, constitute in aggregate repudiation of the contract of employment?  We accept Mr Hignett’s submission that the issue of delay is fact sensitive and we would not allow the appeal on that basis because it made a permissible finding as to how long is a reasonable period.  But as to other issues, including the pay issues, having found they were not breaches of contract, the Tribunal did not, then, bring them back into the consideration overall as to whether or not there was a fundamental breach.  

22.	It is particularly important to bear in mind that the Respondent had conceded the unlawful deductions point in part.  This too was, as the Claimant said in his resignation letter, a pay issue which he was entitled to regard as promoting his own resignation.  

23.	This judgment cannot stand and therefore it will be set aside. We canvassed with the parties the disposal of this appeal.  Mr Muschett, understandably, says that this case has been through many judicial proceedings relating to his resignation almost three years ago and would like us to make the decision.  Sadly, there are insufficient findings of fact by this Employment Tribunal for us to do that.  We apply the principles in Sinclair Roche & Temperley v Heard Nos 1 & 2 [2004] IRLR 763 EAT to this case, which indicate that it will be exceptional for a case to go back to the same Employment Tribunal.  We consider that although the Tribunal could deal with this professionally, it is not in the interests of justice or proportionality that this case be reconsidered and so it will be remitted to a freshly constituted Tribunal.

24.	Given the amount of time which has passed the parties are directed now to consider Acas conciliation.  It will require the parties to have an open mind about the value of this claim and we were heartened to hear before we stopped him Mr Muschett indicating that he was prepared to put forward some proposals for settlement and those can now be revived.  These events are a long time ago.  The case is now only in respect of unfair dismissal, all the other parts have been dismissed already.