B e f o r e :
LORD JUSTICE THORPE
LORD JUSTICE KEENE
MR JUSTICE BENNETT
|| Nottinghamshire County Council
||- and -
(Transcript of the Handed Down Judgment of
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Mr J Cavanagh Q.C. and Mr S Jones (instructed by County Solicitor, Nottingham County Council)
for the Appellant
Mr B F Langstaff Q.C. and Mr D Massarella (instructed by Disability Rights Commission, Manchester M4 3AQ ) for the Respondent
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Lord Justice Keene:
- This appeal raises a number of issues involving employment and discrimination law. These can be summarised as whether the respondent established that she had been constructively dismissed by her employer, the appellant; whether constructive dismissal amounts to a "dismissal" within the meaning of the Disability Discrimination Act 1995 ("the DDA"); and whether the reduction in the respondent's sick pay by fifty per cent after one hundred days absence from work could amount to and did amount to discrimination under the DDA.
- On each of these issues the Employment Tribunal ("the tribunal") found for the employer, but was reversed by the Employment Appeal Tribunal. ("the EAT"). The employer, Nottingham County Council ("NCC"), now appeals from that decision. As I shall describe, the employee, Mrs Gaynor Meikle, was successful before the tribunal on a large number of complaints which she brought against the NCC of unlawful discrimination under the DDA, and those were not the subject of an appeal to the EAT.
The Main Facts:
- Mrs Meikle began working for the NCC in 1982 as a part-time teacher, becoming full-time in 1990. Since 1985 she worked at Gedling School. In about January 1993 she began to suffer from a deteriorating visual condition, and as a result she lost the sight of one eye and her eyesight in the other eye deteriorated. That meant that reading made her feel tired, but she found it easier to read if the printed word was enlarged.
- She found that she had a particular problem at the school with a document produced each morning showing which teachers were required to cover other teachers' classes. This daily cover timetable was printed in very small print. From about May 1993 she explained to the Head Teacher, Mr Lamb, that she needed an enlarged copy of this daily timetable but no arrangements were ever successfully made over following years for her to be provided with an enlarged copy.
- Some other steps were taken to assist her, but because of noise and other problems it was suggested in March 1998 that her textile teaching (one of four subjects she taught) should be moved to a room designated as DT6. That was located at the other end of the school from another classroom where she regularly taught. She asked that her timetable be adjusted so as to allow for the problems created by this physical separation, but no adjustments were made even though, as the tribunal found, "it would have been practicable to do so".
- The tribunal also found as a fact that the NCC did not consider her needs when drawing up the 1998/1999 timetable. One of the adjustments she sought to her working arrangements was an increase in what were called "non-contact" periods, essentially periods when the teaching of pupils did not take place, so that she could do more of the necessary preparation and other work during daylight hours rather than after dark. The tribunal found that she was given fewer such non-contact periods than could have been achieved.
- Because of her eye-strain, Mrs Meikle had a number of absences from work. In particular she started a period of absence on 13 June 1999. In a report to the NCC in August 1999, a Consultant Occupational Health Physician, Dr Thompson, referred to her distress "as a result of continuing delays and difficulties in implementing the advice given to facilitate her continuing duties" and added that
"the main problem in the past has been her visual impairment but in view of the factors noted above, the effects the situation has had on her general health now appears to be a significant concern."
By now Mrs Meikle had instructed solicitors to act on her behalf, and on 23 July 1999 she presented the first of her two originating applications, alleging disability discrimination.
- On 10 September 1999 Mrs Meikle was told by an officer of the NCC that she was suspended because of her absence. This was done under the terms of a Department for Education Circular which had in fact been superseded in May of that year. The new Circular in force at the time of the suspension provided that such a step should only be carried out on the advice of an appropriately qualified medical adviser. In due course the tribunal found that this suspension was irrational and unjustified.
- Mrs Meikle was put onto half-pay as from 17 December 1999. This was the result of a policy of the NCC whereby an absence from work for more than one hundred days resulted in a reduction of sickness benefit. She did not apply for the NCC to exercise its discretion against making such a reduction.
- Various negotiations then took place during the early months of 2000. A further Consultant Occupational Health Physician, Dr Platts, reported on 29 February 2000 that Mrs Meikle had quite good distance vision, so that she would have no great difficulty in seeing pupils in her classes, but that it took her much longer than her colleagues to carry out routine reading, preparation of coursework and marking pupils' work.
- On receipt of that report, her solicitors wrote on 8 March 2000 to the NCC, setting out "the main reasonable adjustments requested by our client". There were eight adjustments requested, including
"1. enlargement of all written materials, especially the daily cover timetable and notices for departmental meetings", and
"9. (sic) additional non-contact time to allow our client to mark work during daylight hours at school and to do less marking at home in the evenings."
In its response the NCC commented that it would be difficult to reduce her contact time further but that the enlargement of written materials was "not a difficult issue". Mrs Meikle's solicitors replied to this by letter dated 15 May 2000, in which they went through each of the eight items in detail, dealing with the comments made by the NCC in its response. On the issue of non-contact time, it was said by her solicitors that there was another member of staff, not disabled, who had more non-contact time than she did, and they did not agree that more non-contact time could not be made available if the NCC wished.
- By a second letter of the same date to the same officer of the NCC, her solicitors referred to a meeting which had taken place to assess what reasonable adjustments were required to enable Mrs Meikle to return to work. The letter continued:
"For the sake of clarity we confirm that the reasonable adjustments our client is seeking are as set out in our letter to the County Council dated the 8th March 2000 (copy enclosed).
If our client is able to return to teaching textiles in the old Textiles Room, only the reasonable adjustments numbered 1 and 9 in our letter dated the 8th March 2000 will need to be made."
- The letter then stated that Mrs Meikle had been suffering from disability discrimination since 1993 and had been asking for "the other reasonable adjustments outlined above" since 1996. It then went on as follows:
"If the reasonable adjustments she has been seeking are made, she will be fit to return to work immediately. Because of the vast length of time over which our client has been discriminated against, and the loss of income she has suffered and will continue to suffer as a result (since her pay was cut to half pay from the 17th December 1999) our client will require the County Council's agreement to the following conditions before she returns to work:-
1 That she is allowed to return to work on a part time basis for a term (to allow her to adjust to returning to work after being absent since the 17th June 1999) before resuming her full time duties;
2 That she is compensated for her loss of pay since the 18th December 1999 when she went on to half pay. This will need to include compensation for loss of pay as a result of our client returning to work on a part time basis;
3 That she is compensated for her injury to feelings (an amount will need to be agreed before our client returns to work).
4 That Malcolm Lamb and Jenny Coleman are sent on a course to learn about disability discrimination in the workplace and how to treat disabled people fairly. This is particularly important to our client as she considers that at present neither Malcolm Lamb nor Jenny Coleman understand what their legal obligations are and she does not feel that she can return to work until they have this understanding.
Our client is also concerned that this matter should not drag on indefinitely. For this reason, she requires the Council's agreement to the above terms in principle within 2 weeks with the compensation figures and details of the course Malcolm Lamb and Jenny Coleman will attend, being finalised within 4 weeks thereafter.
If agreement in this matter cannot be reached within the time scale proposed, our client will have no alternative but to conclude that there has been a complete breakdown of mutual trust and confidence between her and her employer, leaving her with no alternative but to resign from her position with immediate effect."
- The solicitor for NCC replied on 22 May to both letters. He made some observations on points 1 to 4 in the second letter of 15 May and then did the same in respect of the items referred to in the first letter of that date. On point 1 in that letter, the enlargement of written materials, he commented that using existing staff at the school to do this had some difficulties but raised the possibility of a support technician doing this.
- Before any further correspondence was received by her solicitors, Mrs Meikle resigned by a letter both posted and faxed to the head teacher, Mr Lamb, on 30 May 2000. The letter stated:
"Please accept this letter as written confirmation that I am treating your actions as both a breach of the implied contractual term of mutual trust and confidence and unlawful disability discrimination in response to which I am tendering my resignation with immediate effect."
- The following day her solicitors wrote and sent by fax a letter to the NCC solicitor. This stated:
"In our letter dated 15th May 2000 we indicated that if our client is able to return to teaching Textiles in the old Textiles Room, only the reasonable adjustments numbered 1 and 9 in our letter dated the 8th March 2000 will need to be made. As you are aware, our client cannot return to teaching in the old Textiles Room unless reasonable adjustments are made to this room first. The purpose of the meeting on the 11th May 2000 was to assess what reasonable adjustments are required to enable Mrs Meikle to return to work in this room.
In our letter of the 15th May 2000, we also indicated that our client will require the County Council's agreement to the following conditions before she returns to work:"
The letter then set out the four additional conditions contained in the second letter of 15 May 2000 and commented on NCC's response or lack of response to each of them. It then mentioned:
"In short, the Council have not agreed to the reasonable terms laid down by our client for her return to work.
Under the circumstances, our client has no alternative but to conclude that there has been a complete breakdown of mutual trust and confidence between her and her employer, leaving her with no alternative but to resign from her position with immediate effect."
I have set this final correspondence out in some detail, because one of the issues in this appeal is whether Mrs Meikle resigned in response to a fundamental breach of contract by NCC.
- On 4 July 2000 she presented her second originating application, claiming disability discrimination and constructive dismissal.
The Employment Tribunal's findings and conclusions:
- As indicated earlier, the tribunal found that Mrs Meikle had been unlawfully discriminated against in a number of respects in breach of the DDA. Eleven of her complaints of such discrimination were upheld. For example, the tribunal found that she was placed at a substantial disadvantage with regard to the arrangements about the cover timetable, it requiring no great effort to make a suitably enlarged copy for her. By 1 October 1998 NCC was aware that she needed to have all documents enlarged but this was never done. The tribunal found that the provision of an enlarged timetable and other documents were reasonable adjustments within the meaning of section 6 of the DDA.
- It concluded also that she had been placed at a substantial disadvantage because of the distance between her relocated classroom DT6 and her other classes, that a reasonable adjustment would have been to amend the timetable so as to reduce the number of such journeys she had to make and that the NCC could have taken this step but failed to consider her needs. The tribunal also held in her favour on the complaint about "non-contact" time, finding that NCC had not given any proper consideration to this matter. On another complaint, it found that between October 1998 and June 1999 she worked under lighting conditions in DT6 which (from 1 February 1999) were substantially less than those required at law for a sighted person. It commented:
"The Tribunal was at a loss to understand how the first respondent [NCC] could comply with its duty without an informed understanding of what were the applicant's needs. No consideration was given to what level was required for the applicant". (paragraph 43)
- Of some importance, the tribunal also found that she had been discriminated against between the date of her first originating application in July 1999 and her resignation in May 2000, because NCC had continued to send her documents which were not enlarged and because she was still not assigned any more non-contact time. In dealing with the correspondence in late May 2000, it stated that
"The applicant was right to conclude that on her return there would be little, if any, difference, in the arrangements for cover,"
needed to provide more free time (paragraph 71).
- There is no need to set out details of other complaints held to be well- founded, but I do note that the tribunal concluded that the suspension of Mrs Meikle from duty in September 1999 was less favourable treatment which was unjustified and irrational.
- However, the tribunal also found that some of Mrs Meikle's complaints were not well-founded. It concluded that she had not been constructively dismissed within the meaning of section 95(1)(c) of the Employment Rights Act 1996, the provision which defines "dismissal" for the purpose of the unfair dismissal part of that Act as including the situation where
"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."
Not only was there therefore no unfair dismissal but, since there was no dismissal, the claim for wrongful dismissal was also rejected. The tribunal also concluded that a constructive dismissal was not a dismissal for the purpose of section 4(2)(d) of the DDA. Section 4(2) makes it unlawful for an employer to discriminate against a disabled person whom he employs
"(d) by dismissing him or subjecting him to any other detriment."
- Finally, amongst the discrimination claims under the DDA dismissed by the tribunal was one which complained that the putting of Mrs Meikle on half pay was less favourable treatment for a disability related reason. This was conceded by NCC but their defence of justification was upheld by the tribunal. It is these three matters which were the subject of Mrs Meikle's successful appeal to the EAT. It is convenient to take each of them separately and to deal with the reasoning of the tribunal and the EAT under each separate heading.
- The tribunal's reasoning on this issue requires to be set out in full. The first two of the three crucial paragraphs in the Extended Reasons summarise counsel's submissions, with paragraph 100 setting out the tribunal's conclusions.
"98. [Counsel for the applicant] submitted that there was a course of conduct amounting to a fundamental breach of contract. He relied in particular on the decision to suspend the applicant, and the failure to address her concerns. The failure to respond adequately and/or positively to the letters from her representatives dated 8 and 31 March and 15 May 2000 and the first respondent's actions amounted to the "last straw".
99. [Counsel for NCC] submitted that the applicant did not maintain that she had lost trust and confidence in the first respondent. In any event there was no breach.
100. The Tribunal found that the applicant resigned because of the first respondent's failure to agree to terms which her solicitors stated had to be met before she would return to work. These were set out in their letter dated 15 May 2000. That failure did not constitute a breach of contract. Even when it considered the course of events from 1993 the Tribunal did not decide that the first respondent's actions were such that the applicant was entitled to resign from her employment without notice. In reaching that conclusion the Tribunal rejected [her counsel]'s submission that the implied term may be broken even if subjectively the employee's trust and confidence was not undermined in fact. Almost immediately after her resignation the applicant successfully applied to re-enter the first respondent's employment. In her originating application she asked for re-engagement. These matters demonstrated that the relationship of trust and confidence still subsisted. It was her relationship with the second respondent [Head Teacher] which had broken down. He was not her employer. She did not resign as a result of the first respondent's conduct. It could not, therefore, be said that she had been constructively dismissed under the provisions of sections 95(1)(c) of the 1996 Act. Accordingly, the Tribunal decided to dismiss the complaint."
- The EAT accepted a number of criticisms of paragraph 100 advanced on behalf of Mrs Meikle. They concluded, following the House of Lords decision in Malik and Mahmud –v- Bank of Credit and Commerce International  AC 20, that the test in such cases is not whether the employee has subjectively lost confidence in the employer but whether, objectively speaking, the employer's conduct is likely to destroy or seriously damage the trust and confidence which an employee is entitled to have in his employer. Thus the tribunal had been wrong to apply a subjective test. On the issue of whether Mrs Meikle had resigned in response to the employer's breach, the EAT noted that, while her solicitors were imposing certain additional conditions, such as the payment of compensation, they
"were still requiring confirmation that appropriate adjustments would be made to deal with the issue of enlargement of materials and additional non-contract time."
In this connection the EAT drew attention to paragraph 71 of the tribunal's decision, where there is the finding that Mrs Meikle was right to conclude that on her return to work there would be little, if any, difference in the arrangements for cover.
- The EAT also took the view that, in the light of the finding that Mrs Meikle's relationship with the Headteacher, Mr Lamb, had broken down, the tribunal should have found that NCC had breached the implied term of trust and confidence because of those breaches by the Headteacher. The EAT concluded that, if Mrs Meikle resigned in response to his conduct, she was as a matter of law resigning in response to the Council's conduct. This conclusion was influenced by the fact that, early on in the proceedings, the claims against Mr Lamb, who had been the second respondent to the originating applications, were withdrawn because NCC accepted that they were vicariously liable for him. That acceptance was expressly recorded in correspondence. The EAT recognised that an employer would not always or automatically be in breach of the implied term of trust and confidence as a result of the actions of a manager or senior employee, but they concluded that in this case that must be seen as the consequence.
- In any event, the EAT held, NCC had itself been in fundamental breach because of the accumulation of acts by it, a series of actions over a period of time. They placed particular emphasis on the unjustified suspension of Mrs Meikle, as well as NCC's continuing failure to deal with the two outstanding areas of discrimination. The latter, said the EAT, were sufficient to amount to the "last straw" and to find otherwise was perverse. Consequently the EAT concluded that Mrs Meikle had been constructively dismissed, and therefore wrongfully dismissed as well.
- That analysis is now challenged by NCC. On its behalf, Mr Cavanagh QC, puts at the forefront of his case the submission that the EAT misconstrued paragraph 100 of the tribunal's decision. It is argued that the tribunal found that the reason for Mrs Meikle's resignation was NCC's failure to agree to the four new requirements added in the second letter dated 15 May 2000 from her solicitors. That was a finding of fact, and a finding which was not perverse. The tribunal was entitled to conclude that that failure to accept those four requirements was not a breach of the implied duty of trust and confidence. Yet it is well established that, in order for there to be a constructive dismissal, the employee must leave in response to the fundamental breach of contract by the employer: Western Excavating (ECC) Limited –v- Sharp  QB 761;  IRLR 27. Consequently Mrs Meikle did not leave her employment in response to any breach of that term.
- Mr Cavanagh emphasises that this is an argument about causation. It is not enough that the employer is in breach of the implied term of trust and confidence and that the employee resigns: the two events must be causally linked. It is accepted by NCC that, in the later part of paragraph 100, the tribunal went on to apply the wrong test when asking whether that implied term had been broken. Mr Cavanagh acknowledges that the test is an objective one, as appears from the House of Lords decision in Malik and Mahmund, and that the tribunal went wrong in saying that the term cannot be broken unless the employee's trust and confidence has in fact been undermined. But it is contended that that does not matter, if the tribunal was right in the opening part of that paragraph to find that Mrs Meikle resigned in response to something which was not a breach of contract. That crucial paragraph should be seen as having two parts to it and the first is not vitiated by the error in the second part.
- I entirely accept that it is a question of fact why Mrs Meikle resigned. Moreover, it is not in issue that, for a constructive dismissal to arise, the employee must resign in response to a fundamental breach of contract. That is demonstrated not only by Western Excavating (ECC) Limited –v- Sharp but also by Lewis –v- Motorworld Garages Limited  ICR 157, where Glidewell LJ spoke of the employee having to show that he left "as the result of a breach of contract by his employer" (page 169).
- Where I part company from Mr Cavanagh on his main submission is over his interpretation of the tribunal's finding. The tribunal in those opening sentences of paragraph 100 does not find that Mrs Meikle resigned because of NCC's failure to agree to the four numbered items in the second letter of 15 May 2000. It found that she resigned because of NCC's failure
"to agree to terms which her solicitors stated had to be met before she would return to work. These were set out in their letter dated 15 May 2000."
When one turns to that letter, which is presumably the second letter of that date, one finds that her solicitors were setting out a number of matters which would have to be dealt with before she could return to work. Those certainly included the four numbered matters to which NCC's argument relates, but they also included several of the longer-standing reasonable adjustments she had been seeking. The letter expressly makes her return to work conditional on those reasonable adjustments:
"If those reasonable adjustments she has been seeking are made she will be fit to return to work immediately."
That is a reference to the earlier passage in the letter where the solicitors identified those adjustments as being the ones set out in their letter dated 8 March 2000, of which they enclosed a further copy. They also made the point that, of those, only those numbered 1 and 9, the enlargement of written materials and the additional non-contact time, would be required if she could revert to using the old textiles room. Those were clearly still terms which the solicitors were setting out in the letter of 15 May 2000 which had to be met before she would return to work. They were not met at the date of Mrs Meikle's resignation. I can see no justification for so interpreting the tribunal's reference to "terms" as to exclude those items.
- Moreover, like the EAT, I find support for this interpretation of the tribunal's finding in their earlier findings in paragraph 71 about whether arrangements were, at the end of May 2000, going to be made to assure her of more free time. The tribunal was critical of an offer made by NCC in a letter dated 25 May 2000 and it found that
"the applicant was right to conclude that on her return there would be little, if any, difference, in the arrangements for cover."
What is significant about this finding is not merely that in fact there would be little if any difference, but that Mrs Meikle concluded that that would be so. In other words, at this critical time around the date of her resignation, she had been applying her mind to that particular "reasonable adjustment" and had concluded that it would not be made. In those circumstances it would be remarkable if the tribunal intended to confine her reason for resignation solely to the additional four terms set out later in the letter of 15 May 2000. Nor does her own letter of resignation provide any justification for such a restricted interpretation: she indicates no such limitation. The later letter from her solicitors likewise imports no such limit. It seems to me, therefore, that the EAT was right to emphasise that the terms she wanted to be met embraced those reasonable adjustments as well.
- It has been held by the EAT in Jones –v- Sirl and Son (Furnishers) Limited  IRLR 493 that in constructive dismissal cases the repudiatory breach by the employer need not be the sole cause of the employee's resignation. The EAT there pointed out that there may well be concurrent causes operating on the mind of an employee whose employer has committed fundamental breaches of contract and that the employee may leave because of both those breaches and another factor, such as the availability of another job. It suggested that the test to be applied was whether the breach or breaches were the "effective cause" of the resignation. I see the attractions of that approach, but there are dangers in getting drawn too far into questions about the employee's motives. It must be remembered that we are dealing here with a contractual relationship, and constructive dismissal is a form of termination of contract by a repudiation by one party which is accepted by the other: see the Western Excavating case. The proper approach, therefore, once a repudiation of the contract by the employer has been established, is to ask whether the employee has accepted that repudiation by treating the contract of employment as at an end. It must be in response to the repudiation, but the fact that the employee also objected to the other actions or inactions of the employer, not amounting to a breach of contract, would not vitiate the acceptance of the repudiation. It follows that, in the present case, it was enough that the employee resigned in response, at least in part, to fundamental breaches of contract by NCC.
- It was not really argued before us that the persistent failure of NCC to carry out those reasonable adjustments did not amount to a fundamental breach. The tribunal found that they amounted to unlawful discrimination and, given the duration of them and the finding that, even at the time of her resignation, there would have been little improvement in cover if Mrs Meikle had returned to work, it seems to me to be clear that NCC was in breach of its obligation to maintain the trust and confidence of its employee. There are many cases where similar or lesser failures in respect of discrimination have been held to breach that implied term, such as Bracebridge Engineering Limited –v- Darby  IRLR 3, where the EAT held that the failure by an employer to treat an allegation of sexual harassment seriously was a breach of that implied term, which entitled the employee to treat the contract as having been repudiated.
- Consequently the tribunal erred in law in concluding that NCC's failure to agree to the conditions set out by Mrs Meikle's solicitors did not constitute a breach of contract. Their failure was not merely a breach but sufficiently fundamental as to amount to repudiation of the contract. Moreover, the tribunal found that the relationship between Mrs Meikle and the Headteacher, Mr Lamb, had broken down and implicitly that she had resigned, in part, because of that. I accept that not every piece of adverse conduct on the part of one employee towards another will cause a breach of the implied term of trust and confidence between employer and the second of those employees. But Mr Lamb was the Headteacher at the school in which Mrs Meikle had taught since 1985. She had been experiencing problems about the enlargement of materials at the school since 1993, and neither Mr Lamb nor NCC had dealt adequately with those problems, any more than they had dealt with the problem of free time and cover. It would be remarkable indeed if Mr Lamb's failure did not amount to a breach by NCC of its duty of maintaining trust and confidence on Mrs Meikle's part.
- But even if the tribunal had been right that the matters which led to her resignation were not in themselves a breach of contract, that would not have been the end of the story. Such a finding would not have necessarily produced the conclusion that there was no constructive dismissal. In cases where a course of conduct or a series of events leads to a breach of the implied term, the final event which brings about the employee's resignation need not itself amount to a breach of contract. That was so held in Wood –v- W.M. Car Services (Peterborough) Limited  I.C.R. 666, a decision which was approved by this court in Lewis –v- Motorworld Garages Limited, where Glidewell LJ said at page 169:
"(3) The breach of this implied obligation of trust and confidence may consist of a series of actions on the part of the employer which cumulatively amount to a breach of the term, though each individual incident may not do so. In particular in such a case the last action of the employer which leads to the employee leaving need not itself be a breach of contract; the question is, does the cumulative series of acts taken together amount to a breach of the implied term? (See Woods v. W. M. Car Services (Peterborough) Ltd  I.C.R. 666.) This is the "last straw" situation."
This is the very reason why the tribunal here went on to consider whether the course of events from 1993 onwards amounted to such a breach. In the light of its earlier view that the trigger for the resignation was not a breach of contract, it had to consider that issue.
- However, it patently erred when it did so. It rejected the "last straw" argument because it applied the subjective test of asking whether the employee's trust and confidence had in fact been undermined. Even if that had been the appropriate approach, the conclusion that Mrs Meikle's trust and confidence remained despite her relationship with the Head teacher having broken down is an unsustainable one. But the test itself is wrong in law. As Lord Nicholls said in Malik and Mahmud (page 35 E):
"Proof of a subjective loss of confidence in the employer is not an essential element of the breach."
As I have already noted, the appellant does not now seek to argue to the contrary. It follows that the tribunal fell into error when it considered, as it had to, the "last straw" argument, and the EAT was right in so concluding.
- It is contended by the appellant that, having reached that conclusion, the EAT should have remitted the case to the tribunal below for it to reconsider the issue of constructive dismissal and wrongful dismissal. Mr Cavanagh argues that the situation in which Mrs Meikle found herself was improving by May 2000. It cannot be said that the only conclusion which could be reached on the primary facts was that she had been dismissed rather than that she had resigned.
- I disagree. Once it is clear that the NCC was in fundamental breach, as it patently was, the only question is whether Mrs Meikle resigned in response to the conduct which constituted that breach. I have concluded already that that was the finding of the tribunal. In those circumstances there could be only one outcome, namely that she had been constructively dismissed. The EAT was entitled therefore to substitute such a finding.
The meaning of "dismissal" in section 4(2)(d) of the DDA
- The issue here is whether a constructive dismissal amounts to a "dismissal" within the meaning of section 4(2)(d) of the DDA. Section 4(2)provides as follows:
"(2) it is unlawful for an employer to discriminate against a disabled person whom he employs –
(a) in the terms of employment which he affords him;
(b) in the opportunities which he affords him for promotion, a transfer, training or receiving any other benefit;
(c) by refusing to afford him, or deliberately not affording him, any such opportunity; or
(d) by dismissing him, or subjecting him to any other detriment."
- The tribunal, following the EAT decision in Commissioner of Police of the Metropolis –v- Harley  ICR 927, held that a constructive dismissal did not fall within the scope of the word "dismissal" in section 4(2)(d), and was therefore not in itself a discriminatory act. It dismissed her complaint brought under the DDA. By the time the case got to the EAT, there was a further decision of the EAT available, Catherall –v- Michelin Tyres plc  ICR 28, in which Harley had not been followed, the EAT preferring the reasoning in an earlier EAT decision, Derby Specialist Fabrication Limited –v- Burton  ICR 833. The EAT in the present case gave lengthy consideration to this conflict of authorities and to the issue arising, and it concluded that Catherall was to be preferred. It therefore reversed the decision of the tribunal and made a finding that the constructive dismissal of Mrs Meikle was a discriminatory act within the meaning of the DDA.
- The appellant contends that the EAT went wrong in so deciding. Mr Cavanagh, like the EAT in Harley, relies upon the legislative history of the provisions in the various statutes dealing with employment and discrimination. He points out that, although the Sex Discrimination Act 1975, like the DDA, did not contain any definition of "dismissal", it was amended by Parliament in 1986 by the Sex Discrimination Act of that year so as to include constructive dismissal within the meaning of the word. Yet when the DDA was passed, no extended definition of "dismissal" was included. That must be seen as indicating that the term was not intended to include a constructive dismissal in the DDA, any more than in the Race Relations Act, 1976.
- Attention is also drawn by the appellant to the wording of Schedule 3, paragraph 3(1) of the DDA, which states:
"An employment tribunal shall not consider a complaint under section 8 unless it is presented before the end of the period of three months beginning when the act complained of was done."
Mr Cavanagh submits that that concept of an act complained of is difficult to reconcile with constructive dismissal, if treated as happening when the contract of employment is terminated by the employee's acceptance of the employer's repudiation of the conduct. Dismissal in ordinary language is an act by an employer.
- This submission is linked to Mr Cavanagh's other main argument on this topic, namely that a purposive construction of section 4(2)(d) is unnecessary, because the repudiatory act or acts of the employer are already covered by the reference in that provision to "subjecting him to any other detriment". Consequently the employee can in any event bring a complaint about the employer's discriminatory conduct. It is said that this has no effect on the date from which the three months for bringing a complaint would run: even if constructive dismissal were to be regarded as within the meaning of "dismissal", time would still run from the date of the repudiatory act or acts, and not from the termination of employment. For this proposition, Mr Cavanagh relies on a passage from the judgment of Auld LJ in Cast –v- Croydon College  ICR 500, 515. Therefore it makes no difference whether or not the "dismissal" is interpreted in the way adopted by the EAT in the present case.
- I am conscious that I presided over the EAT which made the decision in Derby Specialist Fabrication Limited –v- Burton that the similar provision in the Race Relations Act 1976 did include a constructive dismissal. I have therefore sought to consider this matter afresh, particularly as there have been the subsequent EAT decisions in Harley and in Catherall. It was regrettable that the Derby case was not cited to the EAT in Harley. Nonetheless, the reasoning in that latter decision, largely adopted by the present appellant, deserves careful consideration. Both Harley and Catherall were DDA cases, but it is not suggested that any distinction is to be drawn for this purpose between the DDA and the Race Relations Act 1976, with which the Derby case was dealing. In Catherall, the EAT, presided over by Nelson J., relied on the reasoning in the Derby case as the basis for not following the decision in Harley.
- I remain unpersuaded by the argument based on the legislative history of the various statutes. The amendment to the Sex Discrimination Act 1975 was made apparently in response to the decision of the European Court of Justice in Marshall –v- Southampton and South-West Hampshire Area Health Authority  IRLR 140, where the court had said the word "dismissed" in the 1975 Act should be given a "wide meaning" (paragraph 31). It is right that Parliament did not then or since amend the Race Relations Act 1976 to make the same express inclusion of constructive dismissal, nor did it include any definition of "dismissal" in the DDA, wide or narrow. But that omission on Parliament's part in those two latter cases cannot be regarded as imposing a narrow meaning on the word when used in those two statutes: the amendment to the Sex Discrimination Act 1975 may well have been made out of an abundance of caution to demonstrate clear compliance with Community law.
- Other statutes affecting the area of employment law have been interpreted as including a constructive dismissal within the concept of a dismissal without any express wording to that effect. The most obvious example is the Industrial Relations Act 1971, which when dealing with unfair dismissal made no reference to constructive dismissal. Yet in Sutcliffe –v- Hawker Siddley Aviation Limited  ICR 560 the National Industrial Relations Court, presided over by Sir John Donaldson, held that nonetheless there could be an unfair dismissal deriving from a constructive dismissal. An argument that the converse interpretation should be adopted because earlier legislation in the shape of the Redundancy Payments Act 1965 had in section 3(1)(c) defined dismissal expressly so as to include constructive dismissal was roundly rejected (page 564):
"That comparison points, it is said, to Parliament having intended that there should be no room for an 'unfair constructive dismissal'. We entirely reject that contention. We consider that the omission arose solely because the draftsman thought it unnecessary to include the subsection. We have no doubt that there can be constructive unfair dismissals and that any amendment of the 1971 Act to include a subsection (c) equivalent to that contained in the 1965 Act would have no effect other than to dispose of a misconstruction of the Act."
Thus by 1973 the concept of a dismissal in employment law was being given this meaning, despite the fact that constructive dismissal had been expressly included within the concept in another statute.
- As Mr Langstaff Q.C. submitted on behalf of Mrs Meikle, the courts should avoid attaching too much significance to form instead of substance. Whether there is a dismissal cannot depend on whether an employer says to an employee "get out" or alternatively drives him out. In the Derby case, after dealing with the arguments based on the history of the various statutes, the EAT said:
"Whether the employer deliberately dismisses the employee on racial grounds or he so acts as to repudiate the contract by racially discriminatory conduct, which repudiation the employee accepts, the end result is the same, namely the loss of employment by the employee. Why should Parliament be taken to have distinguished between these two situations?"
- The argument about Schedule 3, paragraph 3(1) of the DDA is bound up with Mr Cavanagh's submission that the employee's position is no worse if he cannot treat his constructive dismissal as a dismissal but has to rely on the employer's repudiatory act or conduct as "any other detriment" in section 4(2)(d). I can see that the employee could formulate his complaint in that way, but it could be disadvantageous to him in terms of the running of time. Certainly, that was the way in which the EAT approached the matter in Harley: the very reason it dealt with this issue of whether constructive dismissal was a dismissal was because the complaint was out of time if it was not, but it was in time if the constructive dismissal was itself an act of discrimination. There are relatively short limitation periods operating in discrimination law, normally three months from the act complained of, and on the face of it there could be great significance attaching to whether the act is the dismissal, with time running from the termination of employment by resignation, or the employer's earlier discriminatory act.
- The appellant's response to this is to say that, in any event, time would run from the employer's repudiatory act, even if dismissed were construed as covering a constructive dismissal. For this proposition reliance is placed on a passage in Cast –v-Croydon College. The passage appears at page 515 D – H, and was clearly obiter, since the employee's appeal had already been allowed on other grounds: see 515 C. It is right that in the passage in question, Auld LJ does appear to suggest that in a sex discrimination case, where there has been constructive dismissal, time runs from the employer's breach and not from the date of the employee's resignation.
- I regret to say that I do not find the reasoning in that passage persuasive. It is important to observe that it was a case brought under the sex discrimination legislation, with the result that there was no doubt that a constructive dismissal amounted to a dismissal. Section 82(1A) of the Sex Discrimination Act 1975, as amended by the 1986 Act, provided that that was so: that subsection states that dismissal includes:
"the termination of that person's employment … by any act of his (including the giving of notice) in circumstances such that he is entitled to terminate it without notice by reason of the conduct of the employer …"
By section 6(2) of that Act,
"It is unlawful for a person, in the case of a woman employed by him at an establishment in Great Britain, to discriminate against her –
(b) by dismissing her or subjecting her to any other detriment."
The three months time limit on bringing a complaint runs from
"when the act complained of was done": section 63
- When those provisions are read as a whole it seems clear to me that "the act complained" of in such a case of constructive dismissal is the unlawful dismissal (section 6(2)(b)), which is constituted by the termination of the employee's employment by her act in circumstances where she was entitled to terminate it (section 82 (1A)). In other words, the act complained of is the constructive dismissal which takes place when she accepts the repudiation by her employer. That is scarcely a surprising result: what would have been the point in deliberately and clearly including constructive dismissal within the definition of dismissal, which is the act of discrimination complained of, if that were not the outcome? The employee could have been left to rely on treating the repudiatory conduct as "any other detriment". While an employee faced with repudiatory conduct by his or her employer must act in sufficient time to avoid a finding that the breach has been waived, there may nonetheless be some interval between breach and acceptance, as in Bliss –v- South East Thames Regional Health Authority  IRLR 308, 315. To hold that time runs from the breach rather than the termination of the contract of employment could negate the clear inclusion of constructive dismissal within "dismissal" in sex discrimination cases.
- I therefore find myself unable to agree with the view expressed obiter by Auld LJ in the Cast case. It follows that it can make a significant difference whether or not "dismissal" includes constructive dismissal in these discrimination cases, including those brought under the DDA. When one arrives at that position, an interpretation which acknowledges that not merely has the employer acted in a discriminatory way but also that this has led to the employee's loss of his or her job is appropriate. For all these reasons I conclude that the EAT was right to regard the constructive dismissal of Mrs Meikle as being in itself a discriminatory act under the DDA.
The Sick Pay Issue
- In dealing with this issue, it is necessary to begin by setting out the relevant parts of sections 5 and 6 of the DDA, because discrimination under the DDA can take two forms. Section 5 provides, insofar as material for present purposes:
"(1) For the purposes of this Part, an employer discriminates against a disabled person if –
(a) for a reason which relates to the disabled person's disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply; and
(b) he cannot show that the treatment in question is justified.
(2) For the purposes of this Part, an employer also discriminates against a disabled person if –
(a) he fails to comply with a section 6 duty imposed on him in relation to the disabled person; and
(b) he cannot show that his failure to comply with that duty is justified.
(5) If, in a case falling within subsection (1), the employer is under a section 6 duty in relation to the disabled person but fails without justification to comply with that duty, his treatment of that person cannot be justified under subsection (3) unless it would have been justified even if he had complied with the section 6 duty …"
Section 6 then provides:
"(1) Where –
(a) any arrangements made by or on behalf of an employer, or
(b) any physical feature of premises occupied by the employer,
place the disabled person concerned at a substantial disadvantage in comparison with persons who are not disabled, it is the duty of the employer to take such steps as it is reasonable, in all the circumstances of the case, for him to have to take in order to prevent the arrangements or feature having that effect.
(2) Subsection (1) (a) applies only in relation to –
(a) arrangements for determining to whom employment should be offered;
(b) any term, condition or arrangements on which employment, promotion, a transfer, training or any other benefit is offered or afforded.
(3) The following are examples of steps which an employer may have to take in relation to a disabled person in order to comply with subsection (1) –
(a) making adjustments to premises;
(b) allocating some of the disabled person's duties to another person;
(c) transferring him to fill an existing vacancy;
(d) altering his working hours;
(e) assigning him to a different place of work;
(f) allowing him to be absent during working hours for rehabilitation, assessment or treatment;
(g) giving him, or arranging for him to be given, training;
(h) acquiring or modifying equipment;
(i) modifying instructions or reference manuals;
(j) modifying procedures for testing or assessment;
(k) providing a reader or interpreter;
(l) providing supervision.
(11) This section does not apply in relation to any benefit under an occupational pension scheme or any other benefit payable in money or money's worth under a scheme or arrangement for the benefit of employees in respect of –
(a) termination of service;
(b) retirement, old age or death;
(c) accident, injury, sickness or invalidity; or
(d) any other prescribed matter."
Thus it can be seen that unlawful discrimination under the DDA can take the form of less favourable treatment for a reason related to disability, if it is not shown that the treatment is justified (section 5(1) discrimination); or it can take the form of an unjustified failure to comply with a section 6 duty to make reasonable adjustments to prevent the disabled person being at a substantial disadvantage compared to those who are not disabled (section 5(2) discrimination).
- In the present case Mrs Meikle claimed that the reduction in sickness benefit to half-pay because of her absence from work amounted to both forms of disability discrimination. The cause of her absence from work was NCC's failure to make reasonable adjustments and the placing of her on half-pay put her at a substantial disadvantage. A reasonable adjustment then would have been to retain her on full pay, by way of sickness benefit, but the NCC failed to comply with its section 6 duty and made no such adjustments. That was unjustified and so there was section 5(2) type discrimination. In addition, there was "direct" section 5(1) discrimination, in that putting her on half-pay was less favourable treatment for a disability related reason, and this was unjustified.
- The tribunal rejected both these arguments. On the first of them, it accepted the NCC's submission that there was no section 6 duty to pay Mrs Meikle full-pay sickness benefit, because such a payment fell within the terms of section 6(11) and was therefore excluded from the duty. As for the complaint of "direct" section 5(1) discrimination, it was conceded by NCC that putting her on half-pay was less favourable treatment for a disability related reason, but a submission that this was justified under section 5(1)(b) was upheld by the tribunal. It took the view that the decision to put her on half-pay reflected NCC's policy towards those who were absent from work for over one hundred days because of sickness.
- The EAT reversed both those decisions. Relying on the earlier EAT decision in London Clubs Management Limited –v- Hood  IRLR 719, it held that section 6(11) did not apply. The sickness payments were made under the terms of the contract of employment between employer and employee, and were paid directly to her, rather than "under a scheme or arrangement for the benefit of employees". The EAT said that
"When one combines section 6(11) with sections 17 and 18 the purpose was clearly to exclude occupational pension schemes and benefits provided under third party insurance services from the employer's duty to make adjustments under section 6 and to replace them with obligations imposed under sections 17 and 18, but not to exclude contractual payment of sick pay by employers."
Contractual sick pay was to be distinguished from third party insurance arrangements. The EAT was satisfied that NCC had failed to make reasonable adjustments and had not shown that that failure was justified.
- As for the section 5(1) claim, the EAT concluded that the tribunal had failed to apply section 5(5) properly or at all. The employer had failed without justification to comply with its section 6 duty, as they had found, which meant that the less favourable treatment of Mrs Meikle could not be justified under section 5.
- I shall take each of these two aspects of the sick pay issue in turn. On the section 5(2) claim, the main issue concerns the interpretation of section 6(11), the exclusion section set out in paragraph 54 of this judgment. Mr Cavanagh argues that the London Clubs case was wrongly decided and that, on the ordinary meaning of the words, sick pay paid by an employer to an employee comes within the words "any other benefit payable … under a scheme or arrangement for the benefit of employees". He points to the fact that section 6 clearly includes terms of the employment contract within the meaning of "arrangements" in section 6(1), and arrangements for direct payments by the employer to employee can be described as being "for the benefit of" the employee. No injustice is caused by excluding sick-pay arrangements from the section 6 duty, because an employee can in appropriate circumstances rely on section 5(1) if he or she has been less favourably treated by the employer.
- In the London Clubs case, the EAT, presided over by Miss Recorder Slade, QC, held that section 6 applied to monetary benefits, for otherwise there would have been no need for section 6(11). As to the meaning of that subsection itself, the EAT said this:
"In our judgment, the natural meaning of 'scheme or arrangement for the benefit of employees' does not include payment of sick pay by an employer to an employee under a contract of employment. Such payments are made by the employer to rather than 'for the benefit' of the employee. Further, they are made pursuant to the contract of employment, an expression used in s. 4(3) rather that 'under an arrangement', the expression used in s 6(11)."
In my view, that construction is supported by the presence in the DDA of sections 17 and 18, relied on by the EAT in the present case. Section 17 inserts a statutory "non-discrimination rule" into operational pension schemes, and requires trustees or managers of such a scheme to refrain from any act or omission which, if done by an employer, would amount to unlawful discrimination under the DDA. Section 18 deals with insurance services, which are defined as services for the provision of benefits in respect of
"(a) termination of service;
(b) retirement, old age or death;
(c) accident, injury, sickness or invalidity; or
(d) any other prescribed matter."
It will be observed that these matters, which may give rise to the payment of benefits, are identical to those which appear in section 6(11). Section 18 then imposes certain liabilities on the insurer providing these insurance services to employees under arrangements with their employer, if the insurer discriminates.
- It seems to me that sections 17 and 18 are to be seen as the counterpart of section 6(11). The duty on an employer as to making reasonable arrangements to avoid placing a disabled employee at a substantial disadvantage in respect of occupational pension schemes or insurance services can be disapplied by section 6(11) because the employee is protected by sections 17 and 18. That makes practical sense since, as Mr Langstaff submitted, the employer will often not be in a position to make adjustments to an employees' pension scheme and insurance schemes. Such duties as there need to be fall more appropriately on those administering the schemes. But no such reason could exist for excluding direct payment of sick-pay by an employer to an employee, in respect of which the employer does have control. No equivalent to section 17 or 18 exists in such a situation, nor does it need to.
- Moreover, I find the point made by the EAT in the London Clubs case persuasive. The wording of section 6(11) needs to be read as a whole and not by extracting individual words and phrases like "arrangement" and "for the benefit of". When the subsection is read as a whole, the wording seems inappropriate to cover payments made directly by an employer to an employee. If that had been intended by Parliament, one would have expected to see it spelt out more clearly. Consequently I agree with the EAT that the tribunal fell into error in ruling that section 6(11) excluded the section 6 duty on NCC to make a reasonable adjustment to overcome the disadvantage of being on half-pay. Mr Cavanagh had a fall-back position in that event, namely that the EAT should have remitted the matter for the tribunal to reconsider it. Because of the conclusion I have reached on the other issue about the sick-pay claim, no purpose would have been served by such a remission.
- I turn to that issue, which concerns the claim under section 5(1). It will be remembered that NCC conceded that the reduction in Mrs Meikle's sick-pay to a half-rate amounted to less favourable treatment for a reason relating to her disability. The dispute was over whether this was justified. The flaw identified by the EAT in the tribunal's reasoning was that it had failed to apply section 5(5) of the DDA, which operates in section 5(1) cases where the employer is also under a section 6 duty but has unjustifiably failed to comply with that duty.
- Mr Cavanagh points out that the omission of any reference to section 5(5) in the tribunal's reasoning on this issue does not mean that it was unaware of it, because reference is made in those crucial paragraphs of the extended reasons to paragraph 4.8 of the Code of Practice issued by the Secretary of State under section 53 of the DDA, and paragraph 4.8 does refer to section 5(5). That is undoubtedly right. On the other hand, that still leaves open the question of whether the tribunal actually applied section 5(5).
- The EAT is criticised by NCC for having regarded section 5(5) as requiring the tribunal to consider what the position would have been if the reasonable adjustments had been made. That, Mr Cavanagh submits, is wrong: the subsection requires the tribunal to consider whether the employer would have been justified in reducing the employee's pay if she had been absent because of sickness where her absence had nothing to do with a failure to make reasonable adjustments. In the present case any employee absent through sickness for more than 100 days would have had their sick pay reduced as Mrs Meikle did. Consequently NCC could make out a case of justification.
- For my part, I cannot accept this line of argument. As this court said in Collins –v- Royal National Theatre Board Limited  EWCA Civ 144, at paragraph 24:
"The clear purpose of s.5(5) is to deny to an employer who has treated a disabled employee less favourably than others any defence of justification which depends directly or indirectly on a breach by the employer of his s.6 duty to make adjustments."
A tribunal does have to consider what the position would have been if the employer had complied with his section 6 duty. That is what the final part of the subsection indicates by the words "even if he had complied with the section 6 duty.". In the present case, it is clear from the findings of the tribunal that NCC had failed in a number of respects to comply with that duty, in particular (though not solely) in regard to enlargement of written materials and the provision of more non-contact time for Mrs Meikle. The proper approach was to ask whether NCC had shown that, if all the reasonable adjustments required by section 6 to her working conditions had been made, Mrs Meikle would have been absent for over 100 days and thereby liable to the reduction in sickness payment.
- The tribunal did not expressly apply its mind to that question. The EAT concluded that, had it done so, it could not have reached the conclusion that justification could have been shown. I agree. The burden was on NCC to establish such justification, but it made no submission to the tribunal that it met the test described at the end of the previous paragraph of this judgment. Moreover, the medical evidence referred to in paragraph 7 above strongly suggests that, even if NCC had raised the argument in the appropriate terms, it would have failed. That evidence pointed towards her lengthy absence being the consequence of the prolonged failure of NCC to take appropriate steps to cope with her disability. There is, on the evidence, no reason to believe that she would have been absent from work, certainly for more than 100 days, if the requisite adjustments had been made. The EAT was entitled to decline to remit the matter. Its conclusion that NCC could not have met the applicable legal test under section 5(5) was an appropriate one.
- The EAT was, therefore, correct in its decision on this aspect of the case. The tribunal had failed to apply section 5(5) as it should have done. Had it done so, it could not have avoided making a finding of unlawful discrimination under section 5(1) in respect of the decision to put Mrs Meikle on half-pay.
- I conclude that the EAT reached the right conclusion on each of the issues raised. I would therefore dismiss this appeal.
Mr Justice Bennett:
- I agree.
Lord Justice Thorpe:
- I also agree.