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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Chambers v Hartwell Services Ltd [2000] UKEAT 936_98_1102 (11 February 2000) URL: http://www.bailii.org/uk/cases/UKEAT/2000/936_98_1102.html Cite as: [2000] UKEAT 936_98_1102

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APPEARANCES

 

For the Appellant	MR ANDREW HOGARTH (of Counsel) Messrs Knowles Benning Solicitors 24 West Street Dunstable Bedfordshire LU6 1SN
For the Respondents	MR PRITCHARD (of Counsel) Instructed by: Ms C George Assistant Company Solicitor Hartwell Services Ltd Seacourt Tower West Way Oxford OX2 0JG


 


JUDGE PUGSLEY: This is an appeal from a decision, promulgated on 5th June 1998, in which the Industrial Tribunal, sitting at Reading, dismissed the applicant's claim for unfair dismissal.

1. The respondent company employed Mr Chambers, the appellant, as a business manager from 5th March 1995 until 18th July 1997 when he resigned in circumstances which he claimed amounted to constructive dismissal. If this appeal was to succeed there could be no question of this tribunal substituting a finding of unfair dismissal because all the tribunal found was that the applicant was not dismissed. Even if a tribunal were to find that he resigned in circumstances that constituted constructive dismissal it might very well be a live issue as to whether this was an unfair dismissal.
2. The factual background to this case is set out in the extended reasons from paragraph 5 onwards. The respondent company are motor dealers operating at various distributorships from a number of sites. They had first employed the appellant as a sales executive in their Botley Road Depot in Oxford in 1994. He had been successful as a salesman before he left the company but subsequently rejoined them in March 1995 as a business manager at their Cowley premises. In January 1997 he was offered a position as business manager at the Botley Road premises in Oxford. As a business manager the appellant's duties were to explain financial options to potential customers and to draw to their attention the advantages and drawbacks on any particular plan whether hire purchase, conditional sale or leasing agreement. By the mid-Summer of 1997 the respondent's senior management began to entertain concerns as to the performance of the Botley Road depot and in particular the appellant's performance as a business manager. There has been complaints from customers in the earlier part of 1997 that the applicant did not appear to have fully explained matters to the customers. Although the appellant's attention had been drawn to that no formal disciplinary action was ever instituted against him in respect of those matters. In paragraph 6 of the decision the tribunal made the finding that the respondents did have concerns about the appellant's performance but they did not reach any decision as to whether those concerns were well-founded.
3. The same company had employed a Mr Marcus Briggs as a business manager but he went to work for a rival dealership in January 1997. Mr Briggs had become disillusioned with his new employers and he was on friendly personal terms with Mr Robert Law a senior manager of the respondent company. Mr Law indicated to Mr Briggs that his company would always welcome him back since he was held in high esteem by them. In due course Mr Briggs indicated that he did wish to return to the employment of the respondent company and an offer was made to him of a post as business manager at Botley Road. Although he was required to give four weeks' notice, he was released after some three weeks and started with the respondents on 7th July 1997. [There seems to be a typing error in the original decision but we think that it is common ground he was required to give four weeks' notice and was released after three weeks not four weeks as stated in the decision.] The tribunal note at the end of paragraph 7 that Mr Briggs returned to the respondents as a business manager at Botley Road and, in the event, took the place "vacated by the applicant".
4. Although the tribunal use those words "vacated by the applicant", the position was rather more complicated than the use of those words would suggest.
5. The subsequent issues, which arise, are best dealt with by quoting on the original decision:

"8 On Friday 3 July 1997 the applicant was due to start a fortnight's holiday. During the afternoon of 3 July he attended a meeting with Mr Hutchby, then the Sales Manager at Botley Road, Mr Law, the Group Finance & Insurance Manager, and Peter Whitton. There is a dispute between the parties as to whether the applicant had been told on 19 June that he would be required to attend the meeting. The respondents' case is that Mr Hutchby told him this on the instruction of Mr Whitton. The applicant denied having been told. We preferred the respondent's version and we are satisfied that he had prior knowledge of the meeting. The meeting was in two parts. The first half of the meeting which started at about 3.30 pm lasted roughly three quarters of an hour to an hour. During the course of that, there was discussion of the applicant's sales figures and his future role in the company. The applicant was told that the respondents were not entirely happy with his performance as Business Manager and wished him to revert to the post of Sales Executive. It was proposed that he should return to that post in the respondents' dealership at Luton. The applicant lived in Dunstable and had been travelling over 100 miles a day to and from work. A post at Luton would have involved significantly less travelling. The applicant was aware that salesmen received a comparatively low salary and relied on commission to bring their earnings up to a satisfactory level. There is a dispute between the parties as to whether any discussion took place between them as to the level of remuneration that the applicant might be expected to receive. The applicant's case is that he was told that the salary would probably be of the order of £3,000 per annum as opposed to his basic salary of £8,000 per annum as a Business Manager plus commission. He estimated that he would lose about £1,000 per month in commission earnings. The respondents' case is that whilst they proposed the job at Luton to him there was discussion of salary. The Tribunal's view is that it is inherently improbable that a married man with a small family when discussing the possibility of a new job would not immediately enquire as to the likely level or remuneration, whether by way of salary or commission or both. This would be a crucial piece of information in deciding whether or not to accept the proposal. We prefer the applicant's evidence and find that the salary was mentioned. It is clear, however, and we find as a fact, that the applicant did not view the proposal at all well and emphatically indicated that he was prepared to accept. The meeting adjourned when the applicant was invited to return to his office and think about the situation for half and hour or so. When it reconvened he was still of the same view and indicated that he would not be prepared to accept the proposal.

9 After some further short discussion the applicant, together with Mr Law and Mr Hutchby, left Mr Whitton's office to go to the applicant's office. Mr Law, as the Group Finance & Insurance Manager, wished to inspect the applicant's paper work and records. The applicant, being about to go on holiday, had done a "hand over" to a colleague earlier in the day to ensure that all pending deals were continued satisfactorily to conclusion. Mr Law stated, we are satisfied, that as the Group Finance & Insurance Manager he wished to ensure that a proper handover had been done and that the applicant's paper work and records were in satisfactory order. There is a dispute between the parties as to the manner in which the three men left Mr Whitton's office to go the applicant's office. The applicant's case is that he was virtually "frog marched" by the other two down the stairs and into his office. He did not suggest that they physically propelled or dragged him into the office, but that they walked with him in very close proximity in a brisk and determined fashion to that no onlooker could have been in any doubt that he was, in reality, being taken by the others to his office. The respondents' version of the incident was that whilst the applicant was agitated during the second meeting this appeared to be due to annoyance rather than any apprehension of his part. Mr Law stated that he wished to go and inspect the applicant's paper work to which the applicant agreed. The three men then walked to his office and although they did so in fairly close proximity they denied that he had been "frog marched" as he suggested. We have considered this issue and, being in mind that it is for the applicant to prove the matters that he alleges, we are not satisfied that he was "frog marched". We accept that the three went to the applicant's office, but this was not done in any intimidatory or overbearing way.

10 Whilst in the applicant's office Mr Hutchby and Mr Law inspected the applicant's paper work and records. Again, there was a dispute between the parties as to precisely what happened. The applicant alleged that the two Managers were obviously looking for faults in the records and paper work with which to tax the applicant. In particular he claimed that Mr law remarked to the effect, when looking at one piece of paper work "scrub that, we can't use that". This, he said, gave rise to the inference that the respondents were actively seeking to cause him trouble. The respondents denied this. Mr Law denied making the remarks attributed to him. Although Mr Chambers submitted that it was strange that Mr Law, who was extremely busy, should have visited Botley Road on the day the applicant was going on holiday and having inspected his paper work, Mr Law stated that he was unaware that the applicant was going on holiday and that as the Group Finance & Insurance Manager it was part of his remit to inspect people's paper work and record keeping and that he was doing no more than this without any wish actively to look for problems.

11 We are not satisfied that the respondents were actively seeking reasons to discipline the applicant.

12 The meeting on 3 July was left on the footing that the applicant would go on holiday and was invited to consider the position whilst he was away. On 11 July 1997 the respondents wrote to the applicant, who was still then on holiday. The letter was brief and merely directed him to report to Mr Law at 9 am on 21 July, on his return from holiday, to the first floor, Seacourt Tower. The applicant took legal advice and through his solicitors indicated that he would not be attending the meeting, but resigned with immediate effect alleging that the respondents had breached his contract. The respondents' stated in evidence to us that they intended that the applicant should consider matters whilst he was on holiday. The proposal was that he should go to Luton as a Sales Executive, but if he did not do so and wished to return to the depot at Botley Road, he might face disciplinary action for poor performance. The respondents also stated that they had re-employed Mr Briggs with the intention that he should be a Business Manager. It was their intention to replace the applicant with him, but that he would be employed as a Business Manager as the same site as the applicant. It had been their practice on previous occasions to have as many as four Business Managers at any particular site and there was no guarantee that the applicant was always going to be the only Business Manager at Botley Road. They had not told the applicant that Mr Briggs was to be returned to Botley Road and he was unaware of this at the time.

13 The above are the facts of this matter. We received lengthy written submissions form the parties to which detailed reference can be made.

14 On behalf of the applicant it was submitted that we should prefer the applicant's version of events. It was clear, it was submitted, that the applicant was being demoted and would earn substantially less in terms of salary. It was submitted that the incident of "frog marching" the applicant through the office and the searching of his office amounted to breaches of the duty to maintain trust and confidence between employer and employee. It was further submitted that on the basis of the evidence the allegations of poor performance were unsubstantiated and amounted to a form of harassment, which was in itself a further breach of that duty. It was submitted that the real reason for the respondents' actions was to restore Mr Briggs, who was a friend of Mr Law's, to the post that the applicant occupied and that in reality the applicant was being moved sideways and downwards, whether he liked it or not.

15 On behalf of the respondents it was submitted that what had happened on 3 July was no more than a discussion at which proposals had been put forward. We were referred to the case of Forester –v- Charcon Products Ltd [1974] IRLR 308 in which it was held that the mere making of proposals to an employee for consideration, however unpalatable they might be, did not amount to a breach of the contract of employment. In this case the respondents entertained doubts as to the applicant's suitability for the post of Manager. He had proved to be an effective Sales Executive and they put to him a proposal that he should return to that capacity at a different depot. He was invited to go on holiday and consider the matter, although his initial reaction was most unfavourable. Had he persisted in that view, he could well have returned to his duties as Business Manager at Botley Road whether Mr Briggs would also by that stage be employed. If the applicant's performance did not improve there was the prospect of disciplinary action against him, although that was not a course which the respondents favoured as an initial solution to the problem. On the issues as to "frog marching" and searching the applicant's office, we were invited to prefer the respondents' evidence."

6. The tribunal set out their directions of law by reference to the leading case of Western Excavating (ECC) Ltd v Sharp [1978] IRLR 27 CA. They then direct themselves:

"16 … We bear in mind that a breach of contract may arise as a result of one isolated incident or as a result of the cumulative effect of a number of instances which may not, taken separately, amount to individual breaches. We bear in mind that the respondents' intentions are immaterial; if their conduct, however well intentioned, results in a breach of the applicant's contract, he may well be able to resign claiming that he has been constructively dismissed."

7. The tribunal sum up their conclusions in paragraph 17 of the decision. It was their unanimous view that the respondents entertained concerns as to the appellant's performance, although those concerns may not have been wholly well-founded and in, at least, the tribunal found in one instance there was evidence that they were not. The tribunal were satisfied that the respondents' view was that the appellant's skills and talents would be better employed as a sales executive in that he was not wholly successful as a business manager. The tribunal went on to say in paragraph 17:

"… On 3 July 1997 they made their views known to him and put a proposal he should move to Luton as a Sales Executive. On 11 July they wrote a terse letter to him instructing him to report to Mr Law at 9 am on his return from holiday. The letter did not set out any of the nature of the discussion that had been held, nor did it say what would happen on 21 July. It was the respondents' intention, we find, to discuss the matter further with the applicant and we are sure that, if he had insisted on returning to his existing post at Botley Road, pressure would have been brought to bear on him to rectify perceived shortcomings in his performance. It is tempting to accept the applicant's proposition that he was being moved out of the Botley Road depot to make way for Mr Briggs who is a friend of Mr Law's and who had previously shown himself to be a successful Business Manager. It is tempting also to speculate, in the applicant's favour, that had he met Mr Law on 21 July and refused to move to Luton that he would have been told in plain terms that he was required to move there as a Sales Executive and the option of remaining at Botley Road as Business Manager was no longer available to him. Had he met Mr Law on 21 July and been told that, his position would have been immeasurably stronger if he had resigned as a consequence. It may be that the applicant's better course would have been to have waited to see what Mr Law had said, if they had met. They did not meet and we must resist the temptation to speculate too much as to what might have happened being satisfied that as at 3 July the matter had been put to the applicant as a proposal for his consideration."

8. The decision went on to say that the unanimous view of the tribunal was that, whilst the respondents might have handled the situation more sensitively in particular by writing to him and confirming the discussion that they had had and the proposal that was put forward, the respondents' conduct, taken as a whole, did not amount to a breach of the appellant's contract of employment.
9. Mr Hogarth has argued the appellant's case with a vigorous attack on the decision but also a restraint about the consequences of allowing this appeal. Mr Hogarth has accepted that there can be no question of this tribunal substituting a finding of unfair dismissal, since all the tribunal found was that there was no dismissal. Moreover, this tribunal is acutely aware that even if the appellant was, on its true construction, found to have been dismissed, then that by no means follows that the constructive dismissal was unfair. This is not a matter that, for obvious reasons, the Employment Tribunal analyse in this decision.
10. The submissions of Mr Hogarth are certainly audacious: It is his submission that the Industrial Tribunal became hopelessly confused as a result of being persuaded to consider the wrong contractual term and then to consider whether there had been an actual breach of that contractual term or whether it was simply a proposal by the employer to breach to the appellant's contract of employment. This position would not have arisen, says Mr Hogarth, if the tribunal had concentrated on the correct contractual term, namely that the employer was in breach of its implied duty that the employer shall not "without reasonable and proper course conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee". See Woods v W M Car Services (Peterborough) Ltd [1981] ICR 666 at 670, Browne-Wilkinson J.
11. The breach of the implied term of mutual trust and confidence is one that has received considerable attention from tribunals and courts since the seminal judgment of Browne-Wilkinson in Woods. In a whole range of cases in Malik v BCCI [1997] 3WLR 95; Lewis v Motorworld Garages Ltd [1986] ICR 157; Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] ICR 524 and in a plethora of other cases, this doctrine has become well-established. On the admittedly anecdotal evidence of the experienced members of this tribunal, in cases of constructive dismissal the breach of this term is probably the most frequently relied on as the basis for justifying the constructive dismissal.
12. Mr Hogarth's central submission is that the tribunal at no stage had properly directed themselves as to the breach of this term so that they failed to appreciate that merely describing something as a proposal did not preclude it as being a breach of the implied term of mutual trust and confidence. Clearly in paragraph 16, where the tribunal says:

"We bear in mind that a breach of contract may arise as a result of one isolated incident or as a result of the cumulative effect of a number of instances which may not, taken separately, amount to individual breaches."

suggest that the tribunal had in mind that they had to consider the breach of the implied trust and confidence. But that direction, though accurate does not seem inadequate and to have been properly applied, says Mr Hogarth, in this case. Since in paragraph 17, says Mr Hogarth, the tribunal is in terms precluding themselves from considering what the appellant's case was by only considering matters as though they were proposals and thus could not be a present and actual breach of the implied term of mutual trust and confidence.

13. Mr Pritchard has argued strenuously that, in effect, the appellant is seeking to raise a point of appeal that was never contended for before. He points out that the appellant's written submissions are summarised at paragraph 14 of the extended reasons, that there was an implied term of trust and confidence which had been breached in only two respects: the incident of "frog marching" which failed on its own facts, and the allegations that poor performance were made in faith in the form of harassment which again failed on the facts. It is suggested that the recruitment of Marcus Briggs was put before the tribunal as an explanatory theory of what caused and motivated the respondents' actions, but was never put that in itself it was a breach of the implied term of mutual trust and confidence and a duty to act in good faith.
14. Mr Pritchard has referred us to the case of Jones v Governing Body of Burdett Coutts School [1998] IRLR 521. At paragraph 19 of the judgment Robert Walker LJ said this:

"There is a good deal of authority, much of which Miss Morgan cited in this court, to the effect that the Employment Appeal Tribunal does not and should not normally allow an appellant to raise a point of law not raised (or raised but conceded) before the industrial tribunal, and indeed that leave to do so should be given only in exceptional circumstances. …"

After reviewing the various authorities Robert Walker LJ went on to say at paragraph 20:

"There authorities show that although the Employment Appeal Tribunal has a discretion to allow a new point of law to be raised (or a conceded point to be reopened) the discretion should only be exercised only in exceptional circumstances, especially if the result would be to open up fresh issues of face which (because the point was not in issue) were not sufficiently investigated before the industrial tribunal. …"

15. It is not necessary for us to analyse those cases, which set out that principle, since Mr Hogarth concedes that he does not have the option of arguing new points of law. It is his case that the matter was already clearly before a tribunal.
16. We accept that general proposition that it is for the parties to call all relevant evidence and it is not for the tribunal to do so even when one of the parties is not legally represented. See Mensah v East Hertfordshire NHS Trust [1998] IRLR 531. Moreover, we accept that the obligation of putting forward the case is upon the party and it is not the duty of the tribunal to find a case for a party. See Derby County Council v Marshall [1979] ICR 731.
17. What perturbs us about this case is that the tribunal did not, in terms, other than the reference in paragraph 16, saying that the breach may be as a result of the cumulative effect of a number of instances which may not taken separately amount to individual breaches, clearly set out the test laid down by Browne-Wilkinson J in Woods at page 670, namely that the employer shall not without a reasonable and a proper course conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. Mr Pritchard did not cite Woods to the tribunal, nor did Mrs Harris, a solicitor appearing for the appellant below.
18. In a solicitor's letter dated 18th July 1997 solicitors acting on behalf of the appellant wrote to the respondent company saying that their client resigned forthwith. They set out the various matters, which are relied upon by their client, and then say this:

"We understand that Marcus Briggs has been doing our client's job since Monday 7th July. We are informed that Mr Briggs formerly left that position to move to other employment but that being a personal friend of Mr Law has been moved back into our client's position in direct contravention of our client's rights.

We have set out the incident in great detail because it is indicative not only of a breach of an expressed term of the contract i.e., reduction in salary and status but also, a breach of the implied term of mutual trust and confidence and the search of the office could be deemed harassment."

19. In the appellant's Originating Application the final two paragraphs read thus:

"I therefore resigned with effect from 18th July, on the grounds that my contract of employment had been breached. I believe the situation arose because Marcus Briggs who had been the previous Business Manager wanted his job back. He left the company in January 1997 because the budget was too high and he would therefore had had a lower income than before. He is a personal friend of Rob Law and he returned to the Botley Road site in my position on Monday 6th July, while I was on holiday. He is still in the same job having benefited from all the commission that I would have been due in August.

I believe that the action of Mr Whitton, Mr Hutchby and Mr Law constituted a breach of contract in offering me an inferior position at a lower salary. Their behaviour on frog-marching me through the office was a breach of the implied terms of mutual trust and confidence and may even be termed harassment."

20. It is clear from the Notice of Appearance entered by the respondents that they clearly appreciated that there was an allegation of breach of the implied term of mutual trust and confidence, since they plead to that contention specifically in their answer.
21. It is quite true to say that in the Originating Application the appellant does not set out in terms the allegation that the recruitment of Mr Marcus Briggs was, in itself, a breach of the implied term of mutual trust and confidence, but it is clear from the passage already cited in the Originating Application that he put the whole basis of his case on the recruitment of Mr Briggs.
22. In his skeleton argument Mr Pritchard put it this way at paragraph 36:

"Were management wrong not to inform Mr Chambers before he went on holiday that Mr Briggs would be starting in his absence? It might on one analysis have been kinder. It might, on another, just have rubbed his nose in the matter and added to the upset he obviously felt. Had he come back after reflection and accepted the Luton/Dunstable proposal, then management might have been glad they had not aggravated things further before he went away. There are pros and cons. This far from being a breach of contract however."

23. In her submissions to the Employment Tribunal on behalf of the appellant, Mrs Harris put at paragraph 4 that the central reason for the appellant being ousted from his position as business manager at Botley Road was because Mr Briggs, who has left the company in January 1997, wished to return and that Mr Briggs was a personal friend of Mr Law.
24. We would totally deprecate the suggestion that Employment Tribunal decisions have to set out citations from particular cases and the failure to do so is a misdirection of law, that would be contrary to a stream of authority which has pointed out that there is no requirement on a tribunal to set out in a decision in formal legal language. There are decisions which have deprecated the citation of an excessive amount of case law. See Anandarajah v Lord Chancellor's Department [1984] IRLR 131.
25. Nevertheless we consider that if the Wood's case had been cited the tribunal would have appreciated the growth in the concept of breach of the implied term of mutual trust and confidence and would perhaps have thought that case rather more relevant to their consideration than the citation of B C Forester v Charcon Products Ltd [1974] IRLR 318 dating back to 1974 and which was a decision of an Industrial Tribunal. It is true that part of the documentation suggested that the implied term of mutual trust and confidence was breached in two respects, namely the "frog marching" and the complaints that the allegation of poor performance were made in bad faith and were a form of harassment, were allegations which failed on the facts. Nevertheless, the central allegation that Mr Briggs was recruited to take the appellant's place was at all times, on any view of the matter, the central issue of the case. We consider the suggestion that it was just put forward as an explanatory theory of what caused and motivated the respondents actions, is a facile semantic point which does not accord with the reality of this case. In paragraph 17 the tribunal say:

"It is tempting also to accept the applicant's proposition that he was being moved out of the Botley Road depot to make way for Mr Briggs who was a friend of Mr Law's and who had previously shown himself to be a successful Business Manager."

We accept that if the tribunal had properly directed itself as to the implied term of mutual trust and confidence, it would have found that the phrase "conducted itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee" would have required the tribunal to make a finding whether that was the case rather than merely state that it was "tempting" to accept the appellant's proposition that he was moved out of Botley Road depot to make way for Mr Briggs.

26. We have come to the decision that this case must be remitted to a differently constituted tribunal in order that this matter could be determined afresh. We accept that the appellant's contention that this is a case where there was a material misdirection by the tribunal which was inadequate as to the true test of breach of the implied trust and confidence term.
27. Courts and tribunals are entitled to receive as much help as they can from advocates as to propositions of law, but in the final analysis, the responsibility for the directions on law rest with the tribunal. It is to be regretted that neither advocate cited the case of Woods. Had they done so, we consider the tribunal would have appreciated that it was required to make findings in the light of that decision, rather than their cryptic reference in paragraphs 16 and 17.
28. We therefore allow the appeal. We make a Legal Aid Assessment Order in respect of the appellant's costs.