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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Dring v. Newbridge Networks Ltd [1999] UKEAT 315_99_1606 (16 June 1999) URL: http://www.bailii.org/uk/cases/UKEAT/1999/315_99_1606.html Cite as: [1999] UKEAT 315_99_1606

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APPEARANCES

 

For the Appellant	MR P O'BRIEN (of Counsel) 1 Stonecross St Albans Herts AL1 4AA


 


MR JUSTICE CHARLES: This appeal comes before us on the ex-parte procedure for us to consider whether or not the appeal raises a reasonably arguable point of law.

1. The appeal is by a Mr Dring against the finding of the Employment Tribunal sitting in Reading on 8 and 16 December, that he was not constructively dismissed. We think that the second date was a sitting for reaching their decision rather than a further hearing. The Respondents to the appeal are Newbridge Networks Ltd.
2. The Extended Reasons were sent to the parties on 7 January 1999. The decision was a reserved decision and was a unanimous one.
3. Before the Employment Tribunal the Appellant was represented by Mr O'Brien of Counsel and he has represented the Appellant before us today and placed before us a helpful skeleton argument which he has added to in oral submission. The Respondent company was represented by a Solicitor before the Employment Tribunal.
4. An understanding of the relevant background facts can be gained from paragraphs 4 to 8 of the Extended Reasons. They are in the following terms:

"4 The facts of this matter, as we find them or as they are admitted to be, are that the applicant commenced his employment with Tandem Computers in 1989. He had a degree and a Higher National Diploma in Civil Engineering. He commenced work as a Systems Analyst and developed expertise in relation to Local Area Networks ('LAN'). These are networks of computer terminals which communicate with each other within a clearly defined location, eg. a particular firm or building. The applicant developed project management skills in relation to the installation, implementation and consultancy in relation to such networks, together with the appropriate products and services. When the applicant became an employee of UB Networks, he was given and accepted formal terms of employment in which the respondents reserved the right to change 'the location, responsibilities and reporting structure at its discretion according to business needs'. These terms subsequently transferred to the present respondents with effect that the applicant became an employee of the present respondents with effect from 1 May 1997. In late 1996 the applicant was working as a consultant in the Network Solutions Group ('NSG') under the management of Mr Phillip Ryder. He regarded himself as the Team Leader, although he was not specifically so designated. Following the transfer in May 1997 the group in which the applicant was working was restructured and named Vivid PSG. This dealt with all former UB Network LAN projects. Prior to the acquisition of UB Networks, Newbridge Networks was also active in the electronics industry and had particular emphasis on Wide Area Networks (WAN). Such networks involved the linking of computer terminals over a wide area with the links spanning different buildings, companies or even countries. Whilst there were differences in technology between LAN and WAN, there were equally similarities and an engineer who understood one would certainly understand elements of the other. When acquiring UB Networks the respondents wished to consolidate their position as a market leader in WAN systems. There was, however, a continuing need, albeit somewhat reduced, for expertise in LAN systems in order to support existing customers and augment the WAN aspects of the business.

5 Following the acquisition of UB Networks, the NSG in which the applicant worked was reorganised and re-named Vivid PSG. The applicant worked under the management of Mr Ryder. There was a reduction in the amount of LAN project work and also a reduction in the consultancy that such work generated and which the applicant had formally undertaken. On two occasions, following the transfer, the applicant was sent to Canada to explain and define his role and that of the group to the Canadian parent company. The proposals he put forward for the role within the company were not acceptable and he asked for further clarification from his Manager. Mr Ryder was unable to give such clarification, however. By the autumn of 1997 the applicant was involved in only one project management at the Houses of Parliament. This was subsequently removed from him. In December 1997 the Vivid unit was restructured and re-named Network Analysis and Consulting (NAC). This concentrated predominantly on WAN with little LAN requirement. In December 1997 the applicant had asked his Manager, Mr Ryder, if the company would support and sponsor him to undertake a course of study for an MBA degree. Mr Ryder said he would pass this request to the training department, but we find that he gave no further commitment beyond this, either on behalf of himself or the company. In the spring of 1998 the applicant was informed that the company would not be prepared to support his request since it contained no element of commercial benefit for them. In-house training was available for the applicant if he required it on projects and topics germane to the respondents' business. At this stage as well Mr Riddiford, who had been seconded to the group, was redeployed elsewhere without reference to the applicant.

6 In January 1998 the applicant was briefly allowed to undertake some project management work on a Swiss project, but this ceased when other Project Managers were deployed by the respondents with the result that from approximately March onwards the applicant undertook no project management work. In the early part of 1998 the respondents had announced that they were entering into alliance with another company, 3COM Corporation. The objective of this was stated in terms to be that each company had products and services which were complementary and that a commercial partnership of this nature would benefit both companies and their existing customers. The applicant perceived that 3COM Corporation had substantial project management skills and resources and considered that the opportunities for him to undertake project management work would be further diminished.

7 The applicant was also dissatisfied in May 1988 with a pay review. In September 1995 his salary was £36,000 per annum basic plus target incentives of up to £8,000. In December 1996 his basic salary was increased to £37,800 with a review promised at the beginning of October 1997. Following the acquisition of UB Networks by the respondents his salary was reviewed and increased in July 1997. His basic salary was increased to £42,800 with a commission target of £3,000 to bring the total, on target earnings, to £45,800. His salary was further reviewed in October 1997 to reduce his basic salary to £44,000, total on target earnings of £47,000. He was promised there would be a further review in May 1998. On that date his basic salary was increased to £45,000, total on target earnings of £48,000. The applicant regarded this as being an increase below the rate of inflation. We do not find this to be the case.

8 On 15 May 1998 the applicant contacted his Manager by E:mail to express his concerns about his position, particularly in the light of the pay increase which he regarded as disappointing. Meetings took place between the applicant and his Manager on 18 May and 26 May. At the first meeting the applicant explained his concerns in more detail. Mr Edwards pointed out that whilst LAN products and services were not the company's main focus they were nevertheless an important feature of their activities and that his skills and commitment to the company were held in high regard. It was agreed that they should talk to the Enterprise Solutions Group in order that the applicant could have a better idea of the strategy of the company. A further meeting took place on 26 May with a Mr Vant of the Enterprise Solutions Group at (sic) present. During this Mr Edwards explained to the applicant that there was work available for him to do and his services were needed. It was explained that there would probably be very little project management work in the future, but that there was still a need for the services and skills he had to offer the company. On 29 May 1998 the applicant wrote to his Manager and Mr Gwatkin tendering his resignation by giving one month's notice. He had already been in touch with a firm of 'head hunters' who had approached him with regard to a job with a competitor. The applicant gave evidence that he regarded the disappointing pay rise as the 'last straw' and that although he had a very good idea that he would be offered a job he did not have a definitive job offer when he resigned. The offer was, however, forthcoming very quickly after his resignation and he joined his present employers immediately after his resignation became effective on 29 June. After the applicant had notified the respondents that he wished to resign, Mr Edwards contacted him again to try and resolve the outstanding concerns, but requested a copy of the applicant's job description. The applicant replied to the effect that he was not prepared to supply this, although, in reality, he had never received a formal job description. This effectively frustrated the efforts that Mr Edwards was making, although he wrote at length to the applicant on 4 June reiterating that the respondents still have a need for the applicant's services."

5. Paragraphs 9 and 10 of the Extended Reasons set out the arguments of the parties. Paragraph 11 contains a description of the approach taken by the Employment Tribunal to the issue whether or not there has been a constructive dismissal and this approach has not been criticised. Paragraphs 12 and 13 of the Extended Reasons contain the reasoning and the decision which together with the facts relating to Mr Dring's position as a team leader contained in paragraph 4 of the Extended Reasons, and the facts contained in that paragraph relating to a letter dated 22 September 1995, are the paragraphs that the Appellant asserts show that the Employment Tribunal erred in law or for present purposes, that it is reasonably arguable that the Employment Tribunal erred in law. Paragraphs 12 and 13 are in the following terms:

"12 A significant feature of this case is that in the contract of employment which the applicant signed with UB Networks in September 1995 the employers indicated that they reserved the right to change the location, responsibilities and reporting structure according to its business needs. Apart from this there was no formal job description, but the applicant conceded in his evidence that the nature of his job would evolve and change in time as technology developed. He acknowledged that there was a need to be flexible and adaptable. LAN and WAN are both systems for the electronic transmission of information and the applicant accepted in his evidence that an understanding of one system would give an understanding of, at least, elements of the other. Whilst there are dissimilarities, there are, in our judgment, considerable areas of similarity representing two facets of the same generic sphere of activity. Following the take over of UB Networks, we are satisfied that the applicant's job content changed in that he was no longer to undertake project management and worked in a different corporate structure. We are not satisfied, however, that he was, in truth, the leader of the group in which he had been working beforehand and we see no reduction in his status in this respect. We do not accept that the failure to define the applicant's role in clear terms was a failure to give adequate support to him in the overall context of his job content. We do not accept that the salary increase in May 1998 was a matter in respect of which the applicant could have legitimate complaint. As has been pointed out to him in cross-examination he had received an increase earlier in the year and over the previous year the total of his pay rise was some 4.8%. Furthermore, we are satisfied that when the applicant raised the concerns he had with his Manager, for the first time, as we are satisfied, in May 1998, Mr Edwards took immediate steps to try and reassure the applicant. If, as the applicant has suggested to us in this case, he was becoming surplus to requirements it is inconceivable that his salary would have been increased at all immediately beforehand or that Mr Edwards would have made diligent efforts as he did to try and set the applicant's mind at rest. We are not satisfied that it has been established that there was a redundancy situation so far as the applicant was concerned.

13 Having reviewed the totality of the evidence and considered carefully the applicant's complaints about his treatment we would certainly accept that the nature of his job had changed, but we do not regard that change as being of great significance. It did not, as we find, amount to a breach of the applicant's contract of employment, whether fundamental or otherwise. It must follow, therefore, that in resigning as he did the applicant did not do so in circumstances which amounted to a constructive dismissal either for the purposes of Section 95 or Section 136. That finding must be fatal to the applicant's claim. We have considered whether or not we took the view that the applicant's motive in resigning was in reality to take advantage of a prospective job offer. In the event it is not necessary for us to reach any firm conclusion on this point since, having decided that there had been no fundamental breach by his employers, we have concluded that the applicant resigned and was not dismissed. It is unnecessary for us to reach a conclusion as to his motives."

6. We turn now to consider the grounds of appeal. The first ground is that the Tribunal erred in law in its interpretation of the term of the employment contract of September 1995, whereby the employer purported to reserve the right to change the location responsibilities and reporting structure at its discretion according to business needs. In support of that ground of appeal it is argued that the Tribunal concluded that that phrase was a term of the contract and it is argued that it is not, as we understand it, on the basis that it is too unclear to constitute a term. Alternatively, it is argued that it contains ambiguities and as a whole is ambiguous and therefore should be construed in the most favourable way for Mr Dring.
7. The difficulty we have with this argument is that, in our judgment, when one reads paragraph 12 of the Extended Reasons in its context and, in particular, the first three sentences of it up to the references to the LAN and WAN systems, the platform for this argument, namely that the Tribunal in their reasoning relied on the ability given by the contract of employment at their discretion to vary its terms is not made out. It seems to us that a proper reading of paragraph 12, albeit that in it the Employment Tribunal refer to the contract of employment as a significant feature, is that the Employment Tribunal (a) look at the totality of the evidence they have which includes the letter, no formal job description and the acknowledgement by the Applicant in his evidence, as recorded in paragraph 12, that the nature of his job would evolve and change, and (b) consider against that background whether or not the changes which they find occurred constituted a fundamental breach of contract, either as to the nature of the work that was to be performed, or the implied term of trust and confidence, and find that they do not.
8. For those reasons, which are based on our analysis of the Extended Reasons, we have concluded that there is no reasonably arguable point of law raised by the first ground of appeal.
9. We would add that, in our judgment, in its context the phrase in the September 1995 letter and is not unclear or ambiguous. It seems to us that it is a term which, in the context of this type of business has sufficient clarity to become enforceable in an identified business situation. However, as we have said, that is not the foundation of our decision in this case. That decision is based upon our analysis of the reasoning of the Employment Tribunal and our rejection of the assertion made on behalf of Mr Dring that, in effect, the predominant feature of the reasoning was that the employers were unilaterally exercising as a matter of entitlement a term of the contract.
10. The second ground of appeal is that no reasonable Tribunal, properly directing themselves, could have concluded as this Tribunal did at paragraph 12 of its Extended Reasons that the Appellant was not leader of the PSG, later the Vivid group and that there was therefore no loss of status. In support of that in the grounds of appeal and in the skeleton the following point was made:

"... There was no evidence whatsoever before the Tribunal to support that conclusion from either of the 2 witnesses of the respondent whereas the appellant and another witness supported by affidavit evidence gave clear evidence that the appellant had indeed been leader of the PSG / VIVID group.

This significant finding of fact was wholly unsupported by any evidence and is, therefore, perverse."

11. The position, as we understand it, and indeed as was confirmed by Mr O'Brien in oral submission, was that the Respondent company was not in a position to give detailed evidence or probably any evidence as to the precise nature of the work done by Mr Dring before the transfer. The position therefore was that Mr Dring and others on his behalf gave evidence as to what he was doing, it being common ground that there was no formal job description, or formal appointment, describing Mr Dring as team leader (or as project manager as Mr O'Brien submitted to us today was his position).
12. In those circumstances it seems to us that the function of the Employment Tribunal is to assess the evidence that is given to them in the description of Mr Dring's job and to reach conclusions based thereon. The fact that they do not accept everything that a witness says about that job, its nature or his description of it, does not entail them disbelieving that witness. Here, no doubt, the witnesses expressed their views and opinions truthfully. But the function of the Employment Tribunal in the circumstances, particularly having regard to the expertise of its lay members, was to reach an assessment as to the extent of the responsibilities of the employee and thus the nature and extent of his job. In our judgment this is plainly what the Employment Tribunal did in this case. In the two important paragraphs for this purpose in the Extended Reasons, namely paragraph 4 where the Employment Tribunal say:

"He, (Mr Dring), regarded himself as the Team Leader, although he was not specifically so designated."

and then in paragraph 12, which is the passage which is more severely criticised by Mr O'Brien, where they say:

"... We are not satisfied, however, that he was, in truth, the leader of the group in which he had been working beforehand and we see no reduction in his status in this respect ..."

The issue was as to change or reduction in status and, in our judgment, there was plainly evidence before the Employment Tribunal on which they could reach that conclusion. In our judgment it is not reasonably arguable that they had no evidence upon which they could properly base this conclusion, or that their conclusion is perverse.

13. The Grounds 3 and 4 can be taken together. Ground 3 is that are that in determining whether there had been a fundamental breach by the Respondent of the Appellant's employment contract and whether such breach was by reason of redundancy, the Tribunal took into account the following irrelevant factors at paragraph 12 of the Extended Reasons, namely (a) that the manager, Mr Edwards, tried to reassure the Applicant, and (b) the Applicant's salary had been increased (the proper test being that set out in section 139 of the Employment Rights Act 1996), and that the weight the Tribunal gave to the irrelevant consideration set out amounts to an error of law. Ground 4 is that no reasonable Tribunal, properly directing themselves, could have concluded, as the Tribunal did at paragraph 12, that there was not a redundancy situation as far as the Applicant was concerned in circumstances where the Respondent's witness, the manager, Mr Edwards, admitted in his evidence that it was expected there would be a reduction in the need for the Applicant's particular kind of work, namely project management, and thus that the Tribunal's finding, in the light of the Respondent's own evidence, is either perverse or a failure to correctly apply section 139.
14. Naturally we agree that the proper test for the Employment Tribunal is that set out in section 139 of the Employment Rights Act. However we fail to see how the points referred to in Ground 3 are irrelevant and are matters which the Tribunal were not entitled to take into account. That does not mean that we do not agree with Mr O'Brien that they do not necessarily point to the fact that the employee is not being made redundant, or that a redundancy situation does not exist. Again, this is a matter very much within the ambit of the fact finding duty of the Employment Tribunal, albeit, of course, section 139 raises points of law. It is not asserted that the Employment Tribunal did not direct their minds to section 139. The application of that section is something which is very much a matter for the "the industrial jury" referred to by Mr O'Brien and others as describing the Employment Tribunal in such a situation.
15. In our judgment this Tribunal heard a substantial body of evidence as to the changes in the work carried out by the Respondent company, and the changes in the work carried out individually by Mr Dring. This is reflected clearly in their findings in paragraph 12. On that evidence, in our judgment, it was well within the range of decision that they could make that there was not a redundancy situation and we do not see that there is any point that is reasonably arguable that they erred in law in reaching that conclusion.
16. For the above reasons we will dismiss this appeal.