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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Simms v Sainsbury Supermarkets Ltd [2005] UKEAT 0548_04_0903 (9 March 2005) URL: http://www.bailii.org/uk/cases/UKEAT/2005/0548_04_0903.html Cite as: [2005] UKEAT 0548_04_0903, [2005] UKEAT 548_4_903

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SUMMARY

Employer repudiated contract of employment by not making payments due to employee – employee worked on after employer made it clear that payments due to employee would not be made – was this affirmation of contract of employment?


 


THE HONOURABLE MR JUSTICE SILBER

I Introduction

1. Ruth Simms ("the appellant") appeals against that part of the decision dated 11 May 2004 of the Employment Tribunal held at Central London, by which it held that she had not been unfairly dismissed by Sainsbury Supermarkets Ltd ("the respondents"). The Employment Tribunal also rejected the appellant's complaints of discrimination and victimisation under the Disability Discrimination Act 1995, but this appeal does not relate to these claims.
2. In reaching its decision on the claim by the appellant for unfair dismissal, the Employment Tribunal found that (i) the respondent had acted in breach of the contract of employment with the appellant by failing to pay her in full from 30 August 2002 and by making deductions from her pay on 13 December 2002, (ii) these breaches of contract were repudiatory, (iii) the appellant resigned by letter of 21 March 2003 and one of the reasons given by the appellant for her resignation was the unauthorised deductions by the respondent of sums from pay due to the appellant, but (iv) the prior failure by the appellant to resign within a reasonable period after the time when the breaches occurred "amounted to acceptance of the respondents' breach of contract" with the result that the appellant was not dismissed. The appellant only challenges finding (iv), which crucially led to her claim for unfair dismissal being dismissed and all counsel's submissions have related to that finding.
3. Mr. David McIlroy, counsel for the appellant contends that the Employment Tribunal reached a perverse decision and/or it erred in law when it held first that the appellant had not resigned within a reasonable period and second that her failure to do so amounted to an acceptance of the respondent's breach of contract. He submits that this case should be remitted to the Employment Tribunal.
4. Mr. Paul Epstein, counsel for the respondent contends that the issue of whether the appellant delayed for too long before purporting to accept a repudiatory breach of contract is a question of fact. He submits that the Employment Tribunal was entitled to reach the decision which it did and that its reasoning does not disclose any errors of law. He also contends that in any event, its reasoning and decision fall far short of reaching the high threshold required for a perversity finding by this Appeal Tribunal.

II The Background to the Claim

5. The appellant, who was born on 25 September 1953, is disabled. She commenced her employment with the respondents on 31 July 2000 and later that year, she was appointed as Senior Human Resources Officer. In January 2001, she was suspended on disciplinary grounds. The appellant was absent sick and in May 2001, she was dismissed for capability on medical grounds. On 2 November 2001 after a disciplinary hearing, the appellant was dismissed. Her subsequent internal appeal against dismissal on disciplinary grounds was rejected. She thereafter commenced proceedings in the Employment Tribunal in January 2002.
6. On 29 August 2002, the respondents' solicitors wrote to the appellant's solicitors putting forward an offer of settlement of the appellant's claims and it contained, among other matters, the following terms, namely that:-

"(1) Our client is offering your client the role of Senior HR Project Consultant. This is a Grade C 5 position and a description of the role is attached. Our client suggests that in relation to the particular roles your client would be assigned to, this would be something that is agreed mutually between them and that they would have a meeting to discuss this. We can confirm your client's existing salary would be unaffected and that she would receive the benefits package applicable to a Grade C 5 employee.

(2) We can confirm that our client will treat your client's employment as continuous from her date of first joining the company.

(3) Our client is prepared to offer £52,600 in settlement of loss of earnings and injury to feelings subject to relevant tax deductions ..".

7. The appellant's solicitors responded on 30 August 2002 unconditionally accepting the respondents' proposals and asking who the appellant should contact in order to arrange a meeting to discuss her new role and the commencement date.
8. There was a delay before the appellant was able to start working. In the week of 11 November 2002, Ms. Bolam, the line manager of the appellant, telephoned the appellant in order to inform her that she could return to work on 18 November 2002 initially on a part-time basis.
9. On 18 November 2002, the appellant started work again. She raised the issue of what her salary was to be. Mrs. Cropper, an employee of the respondent, noted these queries and passed them on to Ms. Bolam. In consequence, an e-mail was sent to the Central Salaries Department of the respondents noting that the appellant's pay was to start from the week commencing 30 September 2002 on reduced hours and then she would then be put on 37 hours working each week from the week commencing 4 November 2002. Ms. Bolam had considered that some of the delay in the appellant's return to work for the appellants was because of the acts of the appellants. Thus, Ms. Bolam decided that the appellant's pay should start from 30 September 2002, which at the time she wrongly thought was a day on which she had met the appellant. When the respondents had previously employed her prior to their decision to dismiss her, the appellant's salary had been £36,500 per annum, which was the salary which she was to receive on her return. The salary was paid five weeks in arrears every four weeks.
10. Moving on to the events which occurred after the appellant's return to work in November 2002, Ms. Bolam was absent from the office from 6 December 2002 until 27 December 2002. On 13 December 2002, when the appellant received her first pay slip, she found that a deduction of 134 hours had been made from it and this was described as "short-time". The appellant herself was on holiday between 19 and 27 December 2002.
11. On 10 January 2003, the appellant was paid for 148 hours, which was the correct number of full-time hours. In early January 2003, the appellant and Ms. Bolam discussed the appellant's claim that the respondents had improperly withheld sums due to her. During those discussions, Ms. Bolam said to the appellant that the advice which she had received was that the respondents had adopted the correct approach on payments to be made to the appellant and therefore, if the appellant was still dissatisfied, she would have to pursue the matter through external lawyers. On 15 January 2003, the appellant duly wrote to the respondents' solicitor asking him to arrange for payment to her of the outstanding sums. On 5 February 2003, the appellant sent a reminder letter to the respondents' solicitors asking for a response to her letter of 15 January 2003.
12. On 10 February 2003, the respondents' solicitor wrote to the appellant attaching a copy of their earlier reply of 31 January 2003, which the appellant had not received when it was originally sent. This earlier letter, which we will refer to by the date on which it was sent by the respondents' solicitor to the appellant, as "the 10 February 2003 letter", stated that "it is my view that no further moneys are owing to you by my client". This letter, which must have been received by the appellant shortly after it was sent, effectively ended any hope on the part of the appellant that the respondents would of their own volition pay her any of the sums, which she considered were due to her.
13. On 18 February 2003, the appellant was injured at work and she then went on sick leave. On 12 March 2003, the appellant presented her first originating application of 2003 to the Employment Tribunal complaining of disability discrimination, victimisation contrary to the 1995 Act and unauthorised deductions from wages. This application form indicated that the appellant considered that her employment with the respondents was continuing as she left a blank space in the box in which she was asked to state when her employment ended. Indeed, she did not then claim in that application that she had been dismissed, even though she lodged this application on 12 March 2003, which was more than a month after the date of the 10 February 2003 letter, in which the respondents had stated their final position.
14. On 21 March 2003, the appellant wrote a letter ("the letter of resignation") to the respondents resigning and in the letter of resignation, the appellant referred to a number of matters in which she had complained that she had been treated differently in that she had been subjected to further acts of discrimination and victimisation. On 27 March 2003, Ms. Bolam replied, expressing her regret and surprise when she had read the appellant's resignation letter. In her letter, she also enclosed a letter providing details of the appellant's 2003 salary. The appellant subsequently presented her second originating claim of 2003 to the Employment Tribunal in which she claimed that she had been unfairly dismissed and it is the Employment Tribunal's decision on that second originating claim which is the subject of the present appeal.

III The Findings on Repudiation and Affirmation

15. The Employment Tribunal found that there were wrongful deductions of salary on 18 October 2002 on 15 November 2002 and on 13 December 2002. In essence, the Employment Tribunal found that the respondents failed to pay the appellant what was due to her. It considered that these deductions were repudiatory and these conclusions are not challenged. The Employment Tribunal then proceeded to consider the submission of the respondents, which was that the appellant had not accepted the repudiation within a reasonable period with the result that she could not claim to have been unfairly dismissed. Therefore, it was submitted in front of the Employment Tribunal by the respondents that the claimant could not claim that she had been unfairly dismissed. The appellant disputed the respondents' submission in front of the Employment Tribunal.
16. In upholding the respondents' submission, the Employment Tribunal said that:-

"The matters on which the [appellant] was or may have been entitled to found an acceptance of the repudiation of her contract were known to her by early January, both in terms of the deductions from her pay, which occurred up to 13 December and were repudiatory breaches of contract, and the refusal of home working (if it was, contrary to the Tribunal's view above, a breach of contract). However, it was only when she was in pain from an injury she sustained at work on 18 February that she appears to have started to consider resignation, and she only resigned by letter of 21 March 2003, some ten weeks after the home working refusal and over four weeks after she started her sick leave absence. No satisfactory explanation has been put forward for the delay. It is not sufficient that the effect of the breaches of contract continue. The [appellant] should have resigned within a reasonable period and her failure to do so amounted to acceptance of the respondent's breach of contract. The [appellant] was therefore not dismissed" (paragraph 81).

IV The Appellant's Case

17. Mr. McIlroy contends that the appeal should be allowed and that this matter should be remitted to the Employment Tribunal because it should:-

(a) have considered, but in fact failed to consider, the delay between receipt by the appellant of the 10 February 2003 letter and her letter of resignation of 21 March 2003, in order to ascertain if that was a reasonable period;

(b) not have concluded that the steps taken by the appellant did not evince a clear intention on her part that she did not accept the respondents' breach of contract;

(c) not have held that mere delay by the appellant constituted an affirmation of contract or an acceptance of the repudiatory breach;

(d) have taken into account (but did not take into account) the fact that the appellant was off sick from 18 February 2003, which was a significant factor, explaining her delay thereafter.

18. Before dealing with these submissions, it is appropriate to bear in mind and to apply three helpful judicial comments to which counsel drew our attention. First, as was explained by Bingham LJ in Meek v. City of Birmingham District Council [1987] IRLR 250 at 251:-

"It has on a number of occasions been made plain that the decision of an [Employment] Tribunal is not required to be an elaborate formalistic produce of redefined legal draftsmanship, but it must contain an outline of the story which has given rise to the complaint and a summary of the Tribunal's basic factual conclusions and a statement of the reasons which led them to reach the conclusion which they do on those basic facts. The parties are entitled to be told why they have won or lost. There should be sufficient account of the facts and of the reasoning to enable the EAT or, on further appeal, this court to see whether any question of law arises; and it is highly desirable that the decision of an [Employment] Tribunal should give guidance to both employers and trade unions as to practices which should or should not be adopted".

19. More recently, that principle was applied by the Court of Appeal in High Table Ltd. v. Horst Jowett and Burley [1997] EWCA Civ 2000, in which Peter Gibson LJ in a judgment with which Hobhouse and Evans JJ agreed, applied the principle in Meek explaining in relation to the duty of the Employment Tribunal that -

"…whilst it must consider all that is relevant it need only deal with the points which were seen to be in controversy relating to those issues, and then only with the principal important controversial points …"

20. Finally, Mr. Epstein reminded us of the great difficulties confronting a party, who contends that a decision of the Employment Tribunal was perverse. Indeed, Mummery LJ (with whom Brooke LJ and Sir Christopher Slade agreed) explained in Yeboah v. Crofton [2002] IRLR 634 [93], with my italicisation added, in respect of claims in appeals that decisions of the Employment Tribunal were perverse, that:-

"Such an appeal ought only to succeed where an overwhelming case is made out that the Employment Tribunal reached a decision which no reasonable tribunal, on a proper appreciation of the evidence and the law, would have reached. Even in cases where the Appeal Tribunal has 'grave doubts' about the decision of the Employment Tribunal, it must proceed with 'great care': British Telecommunications Plc v. Sheridan [1990] IRLR 27 at paragraph 34".

V Discussion

21. Before dealing with the detailed submissions on each of these matters, we should explain that we do not accept Mr. Epstein's submissions that the issues raised by the appellant constitute errors of fact. In our view, these issues are mixed questions of fact and law.

(i) Ground (a)

22. Mr. McIlroy contends that the Employment Tribunal failed to consider the delay between receipt by the appellant of the 10 February 2003 letter and the letter of resignation of 21 March 2003 in order to ascertain if that was a reasonable period for the appellant to consider whether to resign or not. The appellant contends first that the Employment Tribunal was obliged to ascertain the "real point in time" at which the appellant had to make a decision and second that in this case, this period was only after receipt by the appellant of the 10 February 2003 letter, in which the respondents communicated to the appellant their final decision to reject her claim for non-payment and underpayment of her wages.
23. Mr. McIlroy seeks to derive assistance for this submission from the decision of this Appeal Tribunal in Post Office v. Roberts [1980] IRLR 347, in which it was said that the real point in time in which the employee had to make a decision whether to resign did not occur until it became clear that the employers had reached their final decision.
24. We are unable to agree that the decision in Roberts establishes that an Employment Tribunal is invariably required to ascertain the "real point of time". The true position is that it is a question of fact in each case where there has been affirmation and that affirmation will be regarded as having occurred if there has been a sufficient delay after the employer has made his final decision sufficiently clear. Indeed, in Roberts, the employee remained in her job for six weeks pending an investigation by her Union official into the motives of the employer in refusing to transfer her, but she was held not to have lost the right to claim for constructive dismissal because she acted promptly once the employer's behaviour had been clearly established. That case is very different from the present case in which there had been a delay of over five weeks between the time when the appellant would have received the 10 February 2003 letter, which contained the respondents' final and settled position, and the time when the appellant sent the letter of resignation of 21 March 2003.
25. In the passage which we have quoted in paragraph 16 above from paragraph 81 of the Employment Tribunal's Determination, it was pointed out that there was no satisfactory explanation put forward for the delay of over four weeks between the time when the appellant started her sick leave absence and the time when she resigned. The reasoning of the Employment Tribunal is not defective and it shows that the Employment Tribunal was focussing on the correct question before reaching a decision open to it on the facts, taking account of the delay of the appellant in resigning in the period between the date on which the appellant commenced sick leave, 18 February 2003, and the letter of resignation of 21 March 2003. We stress that the Employment Tribunal as the industrial jury was quite entitled to regard the appellant's delay in resigning after receipt of the letter of resignation as showing affirmation of the contract of employment. There is no error in the Employment Tribunal's reasoning. Thus ground (a) fails.

(ii) Ground (b)

26. Mr. McIlroy's contention is that the steps actually taken by the appellant evinced a clear intention on her part not to accept her employer's repudiation of contract. It is submitted by Mr. McIlroy that (i) the appellant did not affirm the breach by continuing to work because she maintained her stance as to entitlements to payment, (ii) she sought to resolve the matter internally and (iii) she resigned when it became clear that the respondent's position was a definite one. Thus, he contends that the appellant did not let matters rest but instead she chose to resolve the matters internally before resigning when it became clear that the respondent's position was a definitive one.
27. We are not persuaded that there is any force in any of the three matters relied on by Mr. McIlroy in order to show that the appellant evinced an intention not to accept the respondent's breach of contract. The appellant continued to work and was paid under the contract. The Lay Members of this Appeal Tribunal helpfully pointed out that if an employee, without somehow reserving her position, continues to work for more than a month after the employer has made clear its final decision on an issue in dispute with its employee, that employee will, according to the usage in industrial relations be regarded as having affirmed the contract. That is precisely what happened here because the appellant continued to be employed from receipt of the 10 February 2003 letter until she eventually sent the letter of resignation on 21 March 2003. By the time when the appellant sent the letter of resignation of 21 March 2003, she could not have been considered as working for only "a limited period".
28. It is not correct as is contended in (ii), that the appellant sought internal resolution after she had received the 10 February 2003 letter as there is no evidence to that effect. Finally, there is no validity in point (iii) because again, the appellant delayed resigning for the five-week period between the receipt of the 10 February 2003 letter and her letter of resignation of 21 March 2003.
29. Mr. McIlroy sought to derive some assistance from the decision of this Appeal Tribunal in Bashir v Brillo Manufacturing Company [1979] IRLR 295, in which this Appeal Tribunal held on the facts of that case that an employee had not waited so long from the date of the breach so as to be regarded as having affirmed the contract. It was held that it was not an affirmation because the employee, who was receiving sick pay, was receiving it at the same level as was payable in his old job, as well as the level which was payable for the alternative job, to which his employers had sought to transfer him. It is noteworthy that Slynn J (as he then was) giving the judgment of this Appeal Tribunal said that "…if [the employee] had gone back and had worked hard for a period without evincing his acceptance of the repudiation, then clearly it would have been too late for him to bring a claim for constructive dismissal" [15]. That was precisely the test that the Employment Tribunal considered in this case before coming to the decision that the appellant had delayed for too long without any satisfactory explanation before accepting the repudiation. Thus, ground (b) must fail.

(iii) Ground (c)

30. The appellant contends that mere delay in this case by the appellant did not constitute an affirmation of the contract or an acceptance of the repudiatory breach. Reliance is placed by Mr. McIlroy on the decision of this Employment Tribunal in W E Cox Toner (International) Limited v Crook [1981] IRLR 443, in which case this Appeal Tribunal held that the employee was precluded from claiming unfair dismissal because he had remained for four weeks after it had become clear that his grievance would not be remedied and consequently he was regarded as having affirmed the contract. The facts of that case bear a strong similarity to those of this present case, but Mr. McIlroy seeks to derive assistance from the statement by Browne-Wilkinson J (as he then was) giving the decision of this Appeal Tribunal who said that "…provided the employee makes clear his objection to what is being done, he is not to be taken to have affirmed the contract by continuing to work and draw pay for a limited period of time .." [15]. As we have explained, that is not the position that has occurred in this case because there had been the substantial delay between the receipt by the appellant of the 10 February 2003 letter and the time when she sent her letter of resignation on 21 March 2003 with no satisfactory explanation being put forward for the delay. Indeed, the decision in Cox Toner suggests that the Employment Tribunal was bound in the present case to conclude that the appellant had affirmed the contract. Thus ground (c) cannot be upheld.

(iv) Ground (d)

31. Mr. McIlroy submits that the Employment Tribunal ought to have taken account of, but did not take account of, the fact that the appellant was off sick from 18 February 2003 and that this explained her delay in accepting the respondent's repudiatory conduct as discharging her contract of employment. We are not persuaded that there is any force in that point at all because, as appears from the passage in the Determination, quoted in paragraph 16 above, the Employment Tribunal made specific findings about the sickness absence of the appellant in the same paragraph in which the Employment Tribunal explained its conclusions on affirmation. Thus, ground (d) cannot be upheld.

V Conclusion

32. Thus, we consider that there is no basis for finding that the Employment Tribunal erred in law or that its decision was perverse in any way. Indeed, if we had been in any doubt on the correctness of any of the grounds relied on by Mr. McIlroy, we would have reached the conclusion that the appellant had affirmed the contract of employment for another reason, namely that when on 12 March 2003 (which was about a month after the time when the appellant received the 10 February 2003 letter), she presented her first application of 2003 to the Employment Tribunal complaining of disability discrimination, victimisation and unauthorised deduction but significantly, the appellant did not claim that she had been dismissed. She also indicated on that application that she was still employed by the respondent as she left a blank space in the box in which she was asked to state when her employment ended. These matters individually or cumulatively indicated that the appellant had not then on 12 March 2003, accepted the respondent's repudiatory contract as determining her contract of employment, but that the appellant considered herself as still employed by the respondent.
33. The main reason why this appeal fails is that the Employment Tribunal was quite entitled to regard the delay without any satisfactory explanation from the receipt of the 10 February 2003 letter until 21 March 2003, when she sent the letter of resignation, by the appellant as affirmation of the contract of explanation. It is arguable that any contrary decision might be perverse.
34. For those reasons, this appeal must be dismissed.