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United Kingdom Employment Appeal Tribunal


You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Aberdeen City Council v McNeill [2009] UKEAT 0037_08_1011 (10 November 2009)
URL: http://www.bailii.org/uk/cases/UKEAT/2009/0037_08_1011.html
Cite as: [2010] IRLR 374, [2009] UKEAT 0037_08_1011, [2009] UKEAT 37_8_1011

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BAILII case number: [2009] UKEAT 0037_08_1011
Appeal No. UKEATS/0037/08

EMPLOYMENT APPEAL TRIBUNAL
52 MELVILLE STREET, EDINBURGH, EH3 7HF
             At the Tribunal
             On 10 and 11 November 2009

Before

THE HONOURABLE LADY SMITH

MISS J GASKELL

MRS A E HIBBERD



ABERDEEN CITY COUNCIL APPELLANT

MR TOM MCNEILL RESPONDENT


Transcript of Proceedings

JUDGMENT

© Copyright 2009


    APPEARANCES

     

    For the Appellant MS M KEARNS
    (Solicitor)
    Messrs Brodies LLP Solicitors
    15 Atholl Crescent
    Edinburgh
    EH3 8HA
    For the Respondent MS A L STOBART
    (ADVOCATE)
    Instructed by:
    Quantum Claims Solicitors
    Employment Division
    70 Carden Place
    Queen's Cross
    Aberdeen
    AB10 1UL


     

    SUMMARY

    Duty of trust and confidence. Mutuality of obligation. Circumstances in which Employment Tribunal had erred in failing to find that the claimant was in prior repudiatory breach of contract and so not entitled to claim that he had been constructively dismissed.


     

    THE HONOURABLE LADY SMITH

    INTRODUCTION

  1. This is an appeal by a local authority employer against a judgment of an Employment Tribunal sitting at Aberdeen, Employment Judge, Mr I McFatridge, holding that the claimant was unfairly constructively dismissed and entitled to a monetary award of £26,028.92.
  2. The claimant resigned before the completion of an investigation into allegations that had been made about his conduct, in the circumstances referred to below.
  3. We propose to continue referring to parties as claimant and respondents.
  4. The first ground of appeal was that the Tribunal had erred in failing to conclude that the claimant was in prior repudiatory breach of contract such that his resignation could not constitute constructive dismissal. The respondents' case was that the Tribunal had misapplied the relevant law and, further, that their decision on that matter was a perverse one.
  5. Separately, and secondly, the respondents' case was that the Tribunal's decision was, overall, a perverse one.
  6. The third ground of appeal was advanced under reference to the respondents' alternative case that any "dismissal" was in fact a fair one, the respondents' not having acted in breach of the implied term of trust and confidence (see Malik v BCCI [1997] IRLR 462 HL at para 54). Their case was that the Tribunal had erred in its application of the test for breach of the implied term, it had reached a perverse decision and had, furthermore, engaged in impermissible substitution of its own views when reaching its decision.
  7. The fourth ground of appeal concerned the respondents' alternative case that if there had been a dismissal, any failures on their part had been procedural failures and had those failures not occurred, the claimant would probably have been dismissed in any event, which failing there was a chance that he would have been dismissed (s.98A (2) of the Employment Rights Act 1996).
  8. The fifth ground of appeal was made under reference to the overriding objective and concerned lack of fair notice of the claimant's case, the fact that the claimant's solicitor had previously represented Mr Woodcock in his disciplinary proceedings and appeared to have previously advised GP, apparently in connection with her position in relation to the respondents (in circumstances where she was a witness for the respondents and a challenge to her credibility was being raised by him on behalf of the claimant) and also under reference to the Tribunal having, of their own motion, raised a criticism of the respondents' conduct regarding the claimant's suspension which was not complained of by him, all presenting an impression of their being prepared to overstate matters in relation to the respondents' conduct.
  9. BACKGROUND

    Events Leading up to the Claimant's Resignation

  10. The background facts of these events can be summarised as follows. Where the dates are at variance with the Tribunal's findings that is because we have specified the dates given in the agreed chronology with which we were provided.
  11. The claimant was employed by the respondents over a period of some 21 years between 1985 and 2006, in their Leisure Department. He began as a Baths Manager, was promoted to the office of Principal Recreation Officer, in charge of various sports centres in the town, and had by the mid 1990's, been promoted to the post of Sport and Recreation Manager, which meant that he worked for what the Tribunal refer to as a 'quasi autonomous unit' known as Aberdeen Leisure. In that post he worked from an office situated beside the Beach Ballroom in Aberdeen, which was part of a leisure complex. He was the senior employee in that office. In 2003, the claimant was appointed to the post of Sport and Recreation Manager (North) which involved him in having responsibility for about 500 members of staff at various locations. In that post, he was a third tier manager and there were a number of tiers below him.
  12. When in the post of Sport and Recreation Manager, the claimant reported to a Mr Gordon and to the Director of Neighbourhood Services (North), who was Mr Woodcock.
  13. The claimant alleged that on a Bank Holiday in April/ May 2004, he had attended the respondents' Exhibition Centre alone and witnessed Mr Woodcock and a marketing manager, referred to by the Tribunal as GP, engaged in a sexual act. No-one else was present. Mr Woodcock and GP have consistently denied the allegation.
  14. The claimant alleged that on another occasion a few weeks later, he had been in the same area of the Exhibition Centre with a junior colleague (Mrs Pat Fraser) and had heard noises of a sexual nature coming from behind a partition. He said that they believed the sounds to be those of Mr Woodcock and GP having sexual intercourse. Neither of them saw who was there, however, or what they were doing.
  15. On neither of the above occasions did the claimant report the matter, make further enquiries or take any disciplinary action. He was GP's line manager.
  16. In February 2005, Mr Woodcock was suspended from office on account of allegations of financial and other misconduct. Mr Parker, Director of Personnel was instructed to carry out an investigation.
  17. In about February 2005, the claimant told the respondents' Chief Executive, informally, that if he was asked to give any information to Mr Parker's investigation, he would require to disclose the above two matters concerning sexual conduct between Mr Woodcock and GP.
  18. In May or June 2005, the claimant discussed with Les Mackie, junior manager, what people were going to be telling Mr Parker in his investigation. He related his allegation of the sexual conduct to which we have referred. Mr Muir, the claimant's line manager was also present and considered that the way in which the claimant discussed these matters was inappropriate.
  19. On 29 June 2005, GP wrote to Mr Muir making numerous allegations that she was being bullied and harassed by the claimant. Mr Muir took no action.
  20. On 8 July 2005, the claimant gave a taped witness statement to Mr Parker. He was provided with a transcript which he amended and signed. It was headed "CONFIDENTIAL". It included the allegations of sexual conduct to which we have referred.
  21. On 15 August 2005, the claimant, in conversation with Mr Muir and in the presence of David Sharman, a employee who was junior to the claimant, told them he had received the copy of his statement to Mr Parker and notwithstanding it being of a confidential nature and clearly marked "CONFIDENTIAL", he discussed the contents of it with them, including the allegations of sexual conduct. Again, Mr Muir considered that the claimant's discussions were inappropriate.
  22. Also on 15 August 2005, Mr Muir consulted personnel and decided to issue the claimant with a precautionary suspension pending a disciplinary investigation. He wrote to the claimant by letter dated 17 August 2005 in terms which included:
  23. "….this is a precautionary suspension, without prejudice or assumption of guilt, pending investigation into the following allegations which have been made against you:
    1. That you breached the confidentiality of an investigation interview where you were interviewed as a witness.
    2. That you made remarks amongst colleagues that were defamatory and undermined the position of a female colleague."
  24. Mr Towns, Assistant to the Chief Executive, who had had a distinguished career with the respondents, was appointed to investigate the allegations against the claimant.
  25. On 30 August 2005, Mr Towns interviewed GP. She complained of harassment, sexual harassment and bullying, all by the claimant. Her complaints were not only about treatment that she had received but were also about the way that he had treated colleagues.
  26. Thereafter, various witnesses made allegations of sexual harassment by the claimant and of misconduct by the claimant. Mr Towns interviewed witnesses and made investigations over a period of about three months and ascertained whether or not there was corroboration for the allegations made. One set of allegations of sexual harassment emanated from a female referred by the Tribunal as LK.
  27. By letter dated 9 November 2005, Mr Towns wrote to the claimant advising him of four further allegations that were now being covered by his investigation in addition to the original two allegations. They were of:
  28. - bullying, intimidating, harassing and threatening including sexual harassment of female employees
    - failures to procure supplies properly and in the best interests of the respondents
    - being under the influence of drink on many occasions in the workplace
    - being uncooperative in matters which required cross departmental and cross service working.

  29. The letter advised that the list had not been finalised; it may yet be added to or subtracted from. Mr Towns hoped to have finalised it by the New Year and would then meet with the claimant.
  30. By letter dated 25 November 2005, the claimant wrote to Mr Towns listing eleven matters he wanted actioned and stating that he felt he was being subjected to a "witch hunt", an allegation which the Tribunal did not find to have been well-founded. In response, by letter of 29 November 2005, Mr Towns refuted that suggestion and dealt with various other matters. He stated that he considered he was carrying out a proper investigation of matters relating to the claimant's alleged conduct as a manager and that his investigation was not yet complete. Various further letters passed between them.
  31. By letter dated 3 February 2006, Mr Towns invited the claimant to an investigatory meeting and enclosed a statement in respect of the allegations made against him, namely the six allegations to which we have already referred together with a further allegation relating to the exercise of his management duties.
  32. On 20 February 2006, there was a meeting between the claimant, his union representative, Mr Towns and Hazel Dunlop, of the respondents' Human Resources department. The meeting did not finish. A continuation date of 27 February was agreed. That meeting was rearranged for 17 March 2006 at the request of the claimant. They met on 17 March but again did not finish and a continued meeting was arranged for 29 March. The claimant was unwell and it was rearranged for 21 April 2006.
  33. The claimant called off the meeting for 21 April and wrote to Mr Towns in, again, critical terms, on 24 April. By that time, both the claimant and Mr Towns were extremely hostile to each other. Mr Towns was offended that his probity was being called into question by the claimant and considered that the claimant's criticisms of him were unfair. He explained his feelings in evidence:
  34. "It would have been a response of saintliness not to have been offended by what he was coming out with."

  35. On 11 May 2006, Mr Towns received a report from occupational health advising that the claimant was fit to attend investigation meetings and he wrote to suggest a meeting on 23 May. The meeting was fixed for 26 May at the request of the claimant, took place on that date and various matters were discussed including matters raised by the claimant. After that meeting there were still points raised which Mr Towns considered required to be resolved.
  36. Other further correspondence passed between them.
  37. On 14 June 2006, the claimant and Mr Towns met again to discuss unfinished business and correspondence between them continued.
  38. By letter dated 28 June 2006, Mr Towns wrote to the claimant and sent him a lengthy document which set out the allegations, extracts from witness statements and other interview records on which the allegations were based together with his record of how he put the various allegations to the claimant and how he responded.
  39. By letter dated 4 July 2006 the claimant wrote to Mr Towns requesting further time to consider the document. The claimant wished to communicate with various employees in connection with the allegations and he was asked, by letter of 7 July, to provide a list of those employees by 11 July. He objected to being given only four days to do so.
  40. By letter dated 27 July 2006, the claimant tendered his resignation giving the following as his reasons for doing so:
  41. "1. I have no trust in the Council as my employer.
    2. The unfair way I have been treated.
    3. The damage to my health and well being.
    4. The irreversible damage done to my career, integrity and reputation.
    5. The breach of Council procedures.
    6. Lack of information about and the process regarding assimilation."

  42. The respondents' Mr John Tomlinson, Corporate Director, wrote to the claimant advising that that letter would be treated as a grievance. The claimant was asked to contact him to discuss whether he would like it to be dealt with in writing or by way of a grievance meeting. The claimant responded indicating that he would be responding in writing in relation "to his grievance and resignation…" but he never did so.
  43. The Claimant's Misconduct

  44. The Tribunal found as fact that the claimant had been guilty of misconduct in several respects. The background facts regarding the claimant's misconduct summarised in this section are drawn from the facts as found in the Tribunal's judgment but also from those that emerge from a consideration of the Employment's Judge's note of evidence given by witnesses who were found by the Tribunal to be credible (provided in response to an order from this Tribunal dated 29 September 2008).
  45. Breaching confidentiality of Mr Parker's investigation

  46. The Tribunal found, at paragraph 189, that the claimant had discussed the matters referred to in his confidential statement to Mr Parker with Mr Muir on two occasions, one in May/June 2005 and one on 15 August 2005. The Tribunal commented:
  47. " …even although Mr McNeill had not been specifically warned to keep the terms of his discussions with Mr Parker confidential, as a senior official of the respondents he ought to have known of the obligation of confidentiality, he therefore did breach this obligation."

    Sexual Harassment

  48. LK was accepted by the Tribunal as being a credible witness (paragraph 333). They did not reject any of her evidence. It was, according to the Employment Judge's notes, as follows.
  49. LK was a female who began working for the respondents in 1990 when she was in her 20s. It was her first permanent job. She worked for the claimant. Between 1995 and 2003, he had a practice of calling her "Big Boobs". He also, on occasion, called her "Big Tits". The expression "Big Boobs" was used by him of and in front of her sporadically. It was not an everyday occurrence. However, it occurred at senior management meetings when she was present. There was also "a laugh" involving speculating about LK donning a wet t-shirt and cheering up the other senior managers. These occasions of her being called "Big Boobs" and there being reference to wet t-shirts would happen at meetings over a couple of weeks, then there would be no mention of it for a while. The wet t-shirt theme persisted for a period which could have been as much as six months. A fellow employee had claimed, successfully, in respect of sexual harassment when remarks had been made about the size of her chest. The claimant would refer to the matter and say he wondered how much LK would get if he made comments regarding the size of her chest and said that they should "go halves".
  50. LK had a specific recollection (as opposed to her recollection of the generality to which we have referred) of the expression "Big Boobs" being used and also two specific recollections of the expression "Big Tits" being used by the claimant, one when she came into the room when he was on the telephone and told the person on the other end of the call that it was "Big Tits" who had arrived.
  51. LK also witnessed the claimant regularly referring to women as being "two pinters" or "six pinters" depending on how attractive they were; the more attractive, the less pints of beer a man would require to consume before he would be able to face sleeping with her.
  52. LK explained that she felt demeaned and embarrassed by the claimant's conduct. She did not complain because she had her career to think of, because she felt that it would jeopardise her career if she raised it, because senior management were very close-knit and she did not feel any confidence that they would back her up. She felt that she would not be believed.
  53. LK was asked in cross examination about whether or not she had the occasional drink with the claimant and said that they would have drinks together "but not socially." That was when there were drinks in the office; she did not, she said, want to be there. She was also asked whether she had herself used expressions such as "two pinter" etc but denied having engaged in such talk.
  54. On LK's evidence, it was also clear that sexual terminology continued to be used by the claimant and others and what can perhaps best be described as a "laddish" culture tolerated by him, unchecked, after 2003 and up until the date of his suspension.
  55. We would, at this point, draw attention to conflicts between LK's evidence, which the Tribunal said they accepted, and the references to the claimant's conduct in relation to her that appear in the judgment. At paragraph 199, the tribunal refer to the claimant:
  56. "…….over a period Mr McNeill had himself called LK "big boobs" on two or three occasions all of which were prior to 2000."

  57. The Tribunal refer to the use of sexual terminology as having been "sexual banter" and add:
  58. "Much of the banter appears to have taken place amongst individuals who socialised with each other off duty as well as having contact with each other in the workplace."

  59. At paragraph 419, they refer to LK having socialised with the claimant outwith the office and also to her having herself engaged in sexual banter.
  60. At paragraph 410, the Tribunal refer to the allegation about sexual harassment of LK being:
  61. "That on two occasions (the last of which was at least more than two years previously) Mr McNeill had used the expression "big boobs" in respect of LK."
  62. At paragraph 419, the Tribunal, under reference to the discussion in the case of Insitu Cleaning Company ltd & Another v Head [1995] IRLR 4 about whether or not a single act of verbal sexual harassment would be sufficient to found a complaint of gross misconduct, comment that Mr McNeill's conduct was "clearly wrong"; the paragraph gives the impression that, at that point, the Tribunal may have had it in mind that the claimant had only been guilty of a single act of verbal sexual harassment towards LK. At paragraph 416, the Tribunal refer to the claimant having carried out only "one" act of harassment.
  63. Accordingly, it would appear that the Tribunal approached their considerations of the extent and severity of this aspect of the claimant's misconduct on the basis either that the claimant only called LK "big boobs" on two or three occasions, or that he did so on two occasions, or that it only happened once, that it stopped prior to 2000, that LK herself engaged in sexual banter and that LK socialised with the claimant outwith the office, all of which are contrary to LK's evidence which they state they accepted as credible. There was no basis in the evidence for them approaching matters in that way. LK's evidence presented a quite different and much more worrying picture, as can be seen from the summary that we have set out above.
  64. There was no suggestion of the claimant's treatment of LK having been brought to the respondents' attention prior to Mr Towns' investigation uncovering it.
  65. Failing to curb the culture

  66. The Tribunal accepted that in the workplace for which the claimant was responsible there was an inappropriate culture of sexual remarks being made, as a generality. The claimant participated in doing so. Remarks about women being three or four pinters were made and there was a standing "joke" that when a male member of staff wore a blue shirt to work that meant he had had sexual intercourse the previous night. Others also used the expression "big boobs" about LK and there was a laddish culture ongoing, up to the time of his suspension.
  67. At paragraph 420, the Tribunal state:
  68. "With regard to whether Mr McNeill should have done more to curb banter and the use of inappropriate language, and the making of inappropriate comments by other staff in the workplace, the tribunal again felt that Mr McNeill was in the wrong."

  69. Again, there was no suggestion that the respondents had knowledge of this prior to Mr Towns carrying out his investigation.
  70. Telephone incident

  71. The Tribunal found, at paragraph 240, that on a Friday afternoon prior to 2002, the claimant was becoming frustrated with a telephone in his office which was malfunctioning. A junior member of staff, Mr Boal, was present at the time. The claimant cut the telephone wire with a pair of scissors and handed it to Mr Boal. The Tribunal describe this conduct as a "wholly improper act of vandalism" (paragraph 241).
  72. At paragraph 410, despite having found the facts of the incident to have been prior to 2002, the Tribunal state that the allegation was that:
  73. "..at some point in the 1990's Mr McNeill had become frustrated with a telephone instrument and cut the cable with a pair of scissors before handing it to N Boal and asking him to fix it."

  74. At paragraph 418, the Tribunal state that the claimant
  75. "had absolutely no recollection of the incident" and that
    " It is open to speculation, however, that if the incident had been raised at the time Mr McNeill may well have had an explanation for this."

  76. At paragraph 241 the Tribunal state:
  77. "…had the matter been raised at the time it may well have been the case that Mr McNeill had a logical explanation for this act and that due to the lapse of time he was unable to remember it."

  78. However, in evidence before the Tribunal, according to the Employment Judge's notes, when the claimant was asked about the incident his position was not that he could not remember the incident. Rather he denied it. He said:
  79. "I have never done this."

    Intoxicated in the workplace

  80. Mr Towns had received a number of reports of the claimant having been under the influence of drink when in the workplace from fellow employees. At paragraph 312, under reference to his evidence to them, the Tribunal comment that the claimant:
  81. "……appeared to go further in his admissions ….. than he had when first confronted by Mr Towns."

  82. At paragraph 313, the Tribunal explain that, in his evidence, the claimant:
  83. "…made admissions particularly relating to his drinking which must have been embarrassing and difficult for him to make."

  84. At paragraph 276, they referred to the claimant having accepted that over the years he had probably on occasions drunk more than he should have. The position was that on numerous occasions (paragraph 266) the claimant had:
  85. "…attended leaving parties and other functions where he had something to drink, and might have appeared to others to have been intoxicated. …With regard to staff leaving parties Mr McNeill had also occasionally drunk to excess over the years and been seen in an intoxicated condition by other members of staff. This had continued up to the point when Mr McNeill had been told by Mr Gerrie that this should cease and thereafter the tribunal accepted the evidence of Mr McNeill and indeed all of the other witnesses who gave evidence to Mr Towns to the effect that all this seems to have ceased when Mr McNeill moved to Balgownie 1, in or about 2002."

  86. However, there was another occasion of relevance after 2002. On 4 August 2005 the claimant left work at lunchtime and met a friend at a public house, The Tribunal states that the claimant accepted in evidence that he consumed several glasses of wine there. His friend wished, thereafter, to contact his wife to ask her to come and collect him, did not have a mobile telephone with him and he and the claimant went into the Bon Accord Baths, workplace premises of the claimant's, to ask for someone there to make the telephone call. The claimant accompanied him. The friend was being difficult about extinguishing a cigar and he and the claimant were asked by the employee in charge to wait in the management office. Other employees who came across the claimant there on that occasion were aware that he had been drinking.
  87. There is no suggestion that the respondents were aware of the incident on 4 August 2005.
  88. Untruthfulness to Mr Towns

  89. Mr Towns interviewed the claimant. He asked him if he had used the expression "big boobs" about LK in front of her and others. The claimant's response to Mr Towns was:
  90. "I have never done that…….I wish to bring L K as a witness that this allegation against me is not true."

  91. He continued with his response so as to blame a junior colleague for having done so. It was not until he was giving evidence before the Tribunal that he accepted that he had used the expression of and to her.
  92. He was also asked by Mr Towns whether he had used the expression "3 – pinters" and "4- pinters" to describe women, in front of female members of staff but he denied having done so. The Tribunal, as we have noted, accepted LK's evidence that he did make these comments.
  93. The claimant also denied to Mr Towns that he had initiated the conversations about his allegations that Mr Woodcock and GP had been guilty of sexual misconduct in the workplace but his evidence to the Tribunal, according to the Employment Judge's note reads so as to indicate that he did volunteer to other employees who would be interviewed that he would be telling Mr Parker that he had caught GP and Mr Woodcock, if asked. Also, separately, his line seemed to be not that he had not initiated such discussions but that it was not a problem because the story about Mr Woodcock's was already known about.
  94. The Tribunal's Considerations of the Claimant's Misconduct

  95. We have referred to those places where there is inconsistency between the facts relied on by the Tribunal and the evidence accepted by them. We turn now to the Tribunal's discussions of the claimant's acts of misconduct.
  96. As above noted, by the end of their judgment the Tribunal appear to have in mind that the claimant committed only one act of verbal sexual misconduct, which is simply not right and gives the impression of the accepted evidence having been "watered down" by the time it came to applying the facts to the law. However, there are other matters of concern. At paragraph 312, the Tribunal refer to the claimant having no recollection of using the words "big boobs" to LK yet he told Mr Towns that he had not used the words, the Employment Judge's notes show that the claimant did accept in evidence that he had done so and at paragraph 199 the Tribunal refer to the claimant's position having been that he used the expression but it was part of an "ongoing joke". None of that amounts to his position being that he could not remember using them. Then, at paragraph 312, the Tribunal enter into their own speculation by way, it seems, of providing some degree of excuse for the claimant. They state:
  97. "Whilst it could no doubt be argued that Mr McNeill was under a duty to be extremely frank with Mr Towns, the tribunal did find it understandable that if one is challenged in the way that Mr McNeill was, it is highly likely that even the most honest employee is going to initially downplay the extent of the issue."

  98. At paragraph 199, with regard to the sexual harassment of LK they state;
  99. "In mitigation, however, Mr McNeill was not the only person who indulged in sexual banter. Much of the banter appears to have taken place amongst individuals who socialised with each other off duty as well as having contact with each other in the workplace. No objection had been taken to the sexual banter by any of the individuals involved and female members of staff as well as male members of staff appear to have indulged in equally inappropriate conduct. That having been said Mr McNeill as manager bore some responsibility for this."

  100. In similar vein, at paragraphs 419, they state:
  101. "…whilst Mr McNeill's conduct is clearly wrong and to be regretted there are a number of mitigating factors. The first is that there were no complaints from LK at the time and indeed on the evidence of Mr McNeill she engaged in sexual banter. Mr McNeill and LK were friendly, they socialised outwith the office. Sexual banter amongst friends is something that happens. Mr McNeill should clearly had had in mind that in many cases a female subordinate will not object to banter which she finds offensive because she does not feel able to. Mr McNeill was clearly in the wrong in not bearing this possibility in mind and was clearly in the wrong to use the words he did towards LK within the workplace, however those matters do amount to significant mitigation."

  102. The import of these remarks is that the Tribunal appears to seek to play down the sexual harassment that occurred by relying on (a) their assertion that sexual banter amongst friends is something that happens, (b) lack of complaint by the victim at the time (c) participation by the victim in the making of improper remarks. We cannot accept that it was appropriate for the Tribunal do so. Even if there are friendships which involve sexual banter (and we do not accept that such banter is an inherent feature of all friendships, as the Tribunal seems to suggest), that does not make verbal sexual harassment in the workplace any less serious. Nor does the fact that the victim does not complain at the time. Nor, we consider, would the fact that a victim herself engaged in the banter where the employee perpetrating it was a senior manager who ought to be able to be relied on to set appropriate behavioural standards. In any event, as above noted, LK did not in fact accept that she had done so.
  103. As regards the failure to curb the laddish culture that remained prevalent, at paragraph 420, the Tribunal states:
  104. "…In mitigation, however, was the fact that the matters now complained of extended over a significant period of time and what is acceptable and unacceptable is subject to a degree of change over time. The tribunal were, however, of the view that even in the mid-90's the language which appeared to be used within Aberdeen Leisure was unacceptable albeit the claimant may have had greater grounds for not believing this to be the case in the early part of the period. The tribunal also considered that Mr McNeill would be able to state in mitigation that he had never received any training from the respondents on this issue. He would also be able to state that the very wide-spreadedness of the culture meant that other managers must have heard these expressions being used and also decided to take no action. These matters do not exculpate Mr McNeill but do amount to significant mitigation."

  105. Again, we cannot accept that the Tribunal was entitled so to conclude. As regards what other managers may or may not have heard over the years, the Tribunal made no findings in fact about that. So far as the lack of training is concerned, we cannot see its relevance to the issue of mitigation. The claimant knew from the terms of the respondents' "Bullying and Harassment at Work Policy" that, in his position, he was responsible for the maintenance of a high standard of professional conduct amongst all employees under his authority and that failure to do so would be regarded as a failure to fulfil all the responsibilities of his position (see: para 5.3 of that policy). On no view can it have been thought acceptable, even in the 1990's, to allow a laddish culture such as existed in Aberdeen Leisure to persist unchecked. The matter was not a training issue; the Tribunal do not suggest what sort of training could have made a difference so far as Mr McNeill's fulfilment of the responsibilities of which he must have been well aware was concerned.
  106. Turning to the matter of the telephone, we have already referred to the Tribunal seeking to deal with it on the basis that the claimant could not remember what happened and maybe he would have been able to give an answer if he had been asked closer to the event. That was, as we have explained, not the claimant's position; his position was to flatly deny that it had happened. The Tribunal's speculative approach is simply not justified and again gives the impression that they are minded to minimise the seriousness of the claimant's misconduct.
  107. Regarding the claimant's drinking, the Tribunal speculates at paragraph 270, as follows:
  108. "Generally speaking the issue of intoxication is one which is highly subjective to the observer. A person may appear drunk to one person and not to another. Other physical conditions such as over-exertion, tiredness and stress can mimic symptoms of drunkenness."

    That speculation, to the effect that there may have been reasons for the claimant appearing intoxicated other than that he had been drinking to excess, had no basis in the evidence.

  109. The idea that the question of whether or not a person is drunk is a subjective one and a person who seems drunk to one person may be:
  110. " displaying mere exuberance"

    is repeated at paragraph 413, where the Tribunal refer to the drink allegations as being "few". The latter does not accord with the picture presented at paragraph 313 of the claimant having made admissions in evidence about his drinking which went further than those made to Mr Towns and which must have been embarrassing and of there having been numerous occasions on which he was intoxicated in the workplace over the years.

  111. Again, the Tribunal give the impression that they are seeking minimise the claimant's misconduct.
  112. Regarding the claimant not having told the truth to Mr Towns, we would refer again to the Tribunal stating in paragraph 312 that if a person is challenged about allegations such as those which arose in this case it is understandable that he will "initially downplay" them. The claimant did not just "downplay" the matters referred to under this head, however. He specifically denied them. Even if the Tribunal's approach was legitimate in a case where an employee seeks to present the truth in a less serious light that was not what happened here.
  113. Repudiatory Breach

  114. The claimant was found to have resigned on account of conduct by the respondents which was calculated to destroy any relationship of trust and confidence (paragraph 399). Put shortly, the conduct in question was, according to the Tribunal, that the investigatory procedure carried out by the respondents was oppressive.
  115. The respondents submitted to the Tribunal and to us that, on the facts, the claimant was in prior repudiatory breach of contract when he resigned and was not, accordingly, dismissed.
  116. Section 95(1)(c) of the Employment Rights Act 1996 provides:
  117. "(1) For the purposes of this Part an employee is dismissed by his employer if …
    (c) the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employers' conduct."

  118. As was clearly and carefully submitted by Mrs Kearns for the respondents, the circumstances which entitle an employee to terminate the contract by reason of his employers' conduct are not defined in the Act but are to be judged according to the relevant principles of common law: Western Excavating v Sharp [1978] IRLR 27.
  119. The claimant's contract of employment was a mutual onerous contract and that meant that both parties were, under the common law of Scotland, obliged to perform their part of the bargain. If a party to such a contract is in material breach of one of his obligations he cannot insist that the other party perform a reciprocal term. He cannot demand fulfilment of the obligations in which he is creditor unless he has performed or is prepared to perform the obligations which he has himself undertaken and in which he is debtor ( see: Gloag : The Law of Contract, 2nd edition p.407; Thorneloe v McDonald & Co [1892] 29 SLR 409; Ramsay & Son v Brand [1895] 25R 1212, 6SLT 114; Alexander Graham & Co v United Turkey Red Co Ltd [1922] SC 533, 1922 SLT 406; Stair 1,10,16;Erskine 111,3,86 ;Steel v Young [1907] SC 360; General Billposting Co Ltd v Atkinson [1909] AC 118, HL). As it was put by Lord President Robertson in Ramsay at p.1214:
  120. "…when contractors do not stick to their contracts they ….unmoor themselves from their contract rights…."

  121. In Turnbull at p.739, Lord Benholme referred to:
  122. "… the well – established rule of Scotch law that in mutual contracts there is no ground for separating the parts of the contract into independent obligements so that one party can refuse to perform his part of the contract and yet insist upon the other performing his part. The unity of the contract must be respected."

  123. In Steel, at p.366, Lord Low referred to:
  124. "…..the strict rule of law that a person who has broken a contract cannot sue upon it…."

    although he also, at p.365, allowed for a degree of flexibility to the extent that if the prior breach was "merely in a matter of detail" then the court would not "throw out" an action on the contract. Hence the resolution of the principle into the formulation expressed above, that is, so as to exclude the commission of trivial breaches from its operation (see also McBryde, The Law of Contract in Scotland 3rd edition para 20 -104).

  125. Whilst it may be possible to show that the parties to a contract intended to create not a mutual contract but a series of independent obligations ( e.g. as in Donaldson v Dodds [1996 ]GWD 29 – 1723 where the parts of a contract which covered on the one hand the sale of a business but on the other hand, loans by the buyer to the seller, were regarded as separate independent obligations; and as in Macari v Celtic Football and Athletic Co Ltd [1999] SC 628 where, on a proper analysis of a complex contract, it was shown that the employee was dismissed for breach of an obligation which was quite separate from that in respect of which he had himself been in breach), provided that it can be shown that the particular obligation which the first party has breached is the counterpart of that to which he seeks to hold the second party, it appears to be clear that, under Scots law, the above noted principle applies.
  126. So it was that in Laurie v British Steel Corporation [1988] SLT 17, a decision of the Outer House of the Court of Session which was later approved by the House of Lords in Miles v Wakefield Metropolitan District Council [1987] 2 WLR 795, it was held that if employees had refused to carry out the work for which they were employed, they could not call on their employers to pay them for the period during which that refusal had subsisted. At p.19, Lord Cowie referred to the "fundamental rule" as being:
  127. "….if one party does not fulfil his part of the mutual contract he cannot turn round and demand performance by the other party of his part of the contract."

  128. In the light of an argument for the employees founded on the fact that the employers had taken no action at the time they withheld performance, when they could have rescinded the contracts of employment, Lord Cowie continued:
  129. "It does not follow, however, that because the defenders did not exercise their remedies, the pursuers have the right to demand performance of the defenders' part of the contract when they have not carried out their own part. In principle it does not seem to me to matter that the defenders have not taken the formal step of rescinding the contract. If the pursuers have not carried out their obligations, they cannot sue for performance by the defenders of their obligations. No reference is made in any of the cases to the necessity of rescinding the contract before putting forward the defence that the other party cannot sue for performance because he has not fulfilled his own obligations. In my opinion it is not necessary to do so, and in these circumstances, if the defenders can establish a material breach of contract by the pursuers in June 1976, the latter would have no right of action to enforce payment by the defenders of their salaries …."

  130. A more recent authority relied on by Mrs Kearns in the course of her submissions, also in the employment context, is the case of RDF Media Group v Clements [2008] IRLR 207 where the employee was in breach of a restrictive covenant in his contract in respect that he had disclosed to a competitor of his employers (who had offered him a job) confidential information including certain details of projects he was working on for his original employers and they had made certain offensive remarks about him to the press after he had indicated that he wished to be released from his contract of employment. The latter are referred to in the judgment as having been a "campaign of vilification". They had the potential to cause significant damage to his reputation. The employee resigned, claiming that in so doing he was accepting his employers' repudiatory breach of contract. In common with the position in the present case, at the time the employers made the offending remarks, they were unaware of the employee's breaches of confidentiality; all they knew was that he was seeking to be released from the restrictive covenants in his contract so as to be able to go and work for a competitor.
  131. At paragraph 120, Deputy High Court Judge Bernard Livesey QC said:
  132. "….when evaluating whether the employer has breached the implied obligation, it is not unimportant to consider the state of the relationship, which is of course a relationship which both parties have a mutual obligation to foster, at the time when the breach is alleged to have taken place. If, by way of example, an employee has no relationship or is himself in repudiatory breach of his relationship, this may have to be put into the scales …." (our emphasis)

  133. At paragraph 133, the learned judge found that the remarks made to the press were so serious as to constitute a breach of the implied obligation of trust and confidence but continued:
  134. "RDF contends that even if it was guilty of breach of the implied obligation, Mr Clements' own behaviour disqualifies him from being able to rely on the above breach of obligation, in so far as he was in repudiatory breach of his own obligations."

  135. At paragraph 137, having considered the factual background surrounding the employee's disclosures to the competitor, he said:
  136. "Working contrary to the interests of RDF in this way constituted acts of disloyalty on Mr Clements' part which amounted to a breach by him of the mutual obligation and/or the duty of loyalty and fidelity. Had Mr Frank known about it I am sure that he would have reacted by dismissing him on the spot."

  137. Then, at paragraph 140, he concluded that the employee was himself in repudiatory breach and was not, accordingly, entitled to accept any subsequent repudiation by RDF. He added, at paragraph 141:
  138. "The alternative way of looking at it is by application of the consideration set out in paragraph 120 above. The point is that if one looks objectively at the relationship between RDF and Mr Clements, that relationship had already been seriously damaged or destroyed by misconduct on his part which went to the root of the relationship. The point is one of causation as well as equity. As a matter of causation I would hold that the relationship was destroyed not by RDF but by Mr Clements as a result of his anterior breach of the mutual obligation. It would also be inequitable for Mr Clements if he were able to claim that RDF caused serious damage to the relationship where the relationship in question was already seriously damaged or destroyed by his own conduct."

  139. Ms Stobart submitted that although RDF could be relied on to support the proposition that if an employee was in anterior repudiatory breach that would preclude him claiming constructive dismissal, there needed to be something still happening with regard to the anterior breach at the time of resignation; that was a submission made without reference to any authority other than the case of RDF itself and, as we understood it, was based on the fact that that could be said to have been the position there. She also referred to the case of S G & R Valuation Service Co LLC v Boudrais and others [2009] IRLR 770 as support for a submission that where breaches of contract were sequential, the mutuality principle above referred to did not apply; it seemed to be suggested that, in that case, the validity of the reasoning in RDF was questioned. But the discussion in Boudrais was limited and obiter and we accept, rather, as submitted by Mrs Kearns, in circumstances where the court was concerned with looking for mutuality of breach rather than mutuality of obligation, the former not being a relevant principle of Scots law.
  140. As in any contract of employment, one of the essential terms of the claimant's contract was the implied term that neither would, without reasonable and proper cause, act in a manner calculated and likely to destroy or seriously damage the relationship of trust and confidence between employer and employee (Malik v BCCI SA [1997] IRLR 462 HL; Huggins v Micrel EATS/0009/04 para 31.). It follows that if the claimant was, at the time he resigned, in breach of that implied term, he was in repudiatory breach and not entitled to terminate the contract on the basis that the respondents had themselves breached that implied term.
  141. Ms Stobart submitted that the respondent's failures in respect of their investigation of the allegations against the claimant were not the counterparts of the obligations which the claimant himself had been found to have breached. That was not the Tribunal's approach. They, rather, found that the claimant was not in breach of the implied term. At paragraph 402, they state:
  142. "The tribunal was prepared to accept that where an employee has himself breached the implied term of trust and confidence he is not entitled to rely on the employers' subsequent breach of the same term as repudiating the contract. The contract has effectively come to an end due to the anterior breach by the employee. The tribunal did not however find that this was the case here. The tribunal considered that not every breach of an employers' disciplinary code will amount to a breach of the implied term of trust and confidence. The tribunal considered that for it to be a breach of the implied term of trust and confidence the employee's conduct would require to be such as is calculated or likely to destroy or seriously damage the relationship of trust and confidence between employer and employee. Although the remarks which the claimant eventually accepted making to LK were inappropriate, they did not in the view of the tribunal come anywhere close to amounting to such a breach, nor did the breach of confidentiality of the Woodcock investigation."
  143. Thus, the tribunal did not consider that the verbal sexual harassment, as assessed by them, of itself, amounted to a breach of the implied term. Nor did they consider that the breach of the confidentiality of the Woodcock investigation, of itself, amounted to a breach of the implied term. Further, in paragraph 415, they concluded that the occasions of being intoxicated in the workplace did not amount to misconduct at all; that does not, however, appear to accord with comments they make about the significance of the drink matter, in paragraph 404, to which we refer below. In paragraph 418, under reference to the telephone incident, they conclude that no reasonable employer would have dismissed on that ground. At paragraph 420, whilst appearing to accept that the claimant had failed to do all that he should in relation to the laddish culture in the workplace, referred, as we have noted, to there being significant mitigation. They also, at the end of paragraph 404, dismissed the fact of the claimant's untruthfulness to Mr Towns as not being a breach of the implied term.
  144. At paragraph 404, the Tribunal states its response to the respondents' submission that the claimant was in prior repudiatory breach of contract. It is that, apart from the inappropriate comments to LK and the breach of the confidentiality of the Woodcock investigation:
  145. "….there was nothing else of significance within the entire catalogue supposedly covered by Mr Towns which the tribunal found the claimant was guilty of apart from certain of the allegations regarding his alcohol consumption. As a matter of fact the tribunal did not find that any of these would amount to a breach of the implied term by Mr McNeill."

  146. We have already referred to the extent to which the tribunal's narration of and reference to the claimant's sexual harassment of LK in its judgment is at variance with the evidence which they accepted and to the extent to which they appear to seek to minimise it, the occasions of intoxication in the workplace, the failure to curb the laddish culture and the lying to Mr Towns, and to the Tribunal suggesting that the claimant could be excused in relation to the telephone matter as he could not remember what happened when that was not his position. Separately from that, however, to answer the question of whether or not the claimant was in prior repudiatory breach of contract, the Tribunal required to consider all these matters together and ask whether, together, they amounted to a breach of the implied term of trust and confidence. They did not, however, do so.
  147. We would add that this is not a case where the employer knew of the breaches and affirmed the contract in knowledge of them or where the employer had waived his right to rely on them. The relevant acts of misconduct were uncovered after the claimant's suspension in the course of Mr Towns' investigation. The claimant himself did not admit to those for which he was prepared to take responsibility until he gave evidence before the Tribunal. Even then, he still denied the telephone incident. As discussed by Lord Steyn in Malik, the implied obligation of trust and confidence is not limited so as to prevent a party from founding on breaches of which he was not aware at the time the employment relationship was ongoing.
  148. Mrs Kearns submission was, however, that the claimant was in breach of the implied duty of trust and confidence. We accept that, on a proper analysis, he was and that the breach was a material one. He was a senior manager charged with responsibility for 500 members of staff. It was plainly his duty to conduct himself in a manner which set a good example to them including in a manner which complied at all times with his employers' policy on bullying and harassment at work. It was plainly his duty to be honest and truthful to the respondents. We consider that it almost goes without saying that if such an employee fails in these duties to any material extent in circumstances where he has no reasonable and proper cause for doing so then that is conduct that is likely to seriously damage or destroy the relationship of trust and confidence with his employer (Malik; Huggins, supra). There was no evidence before the Tribunal nor finding by them that the claimant had reasonable and proper cause for acting as he did.
  149. As we have explained above, the evidence accepted by the Tribunal demonstrated that LK, a young woman in relation to whom the claimant was in a dominant position was subjected to wholly improper and inappropriate verbal sexual harassment over a significant period and there was no proper basis on which the Tribunal could conclude that the matters to which it refers as mitigatory were mitigatory at all. Shortly put, the claimant abused his dominant position in relation to her and in so doing, set a bad example to other employees. The culture that subsisted right up until the time of the claimant's suspension was, similarly, wholly improper and inappropriate. He should have taken the lead and stopped it but he did not do so. He did not see to it that a high standard of professional conduct was maintained by him and by others, as, in terms of the respondents' policy, he should have done. When the occasions of his intoxication in the workplace, the last of which was very shortly prior to his suspension, his "wholly improper act of vandalism", to use the Tribunal's own description, in respect of the telephone and his failing to be frank and honest to Mr Towns when he was interviewed by him are added to the foregoing, the only conclusion that could be drawn by a reasonable tribunal is that he was certainly in material breach of the implied duty of trust and confidence at the time he resigned.
  150. In an argument that was not advanced before the Tribunal Ms Stobart submitted that the respondents had waived their rights in respect of any breach by the claimant because they had not put the matters to the claimant as soon as they became aware of them. The submission was made without any reference to authority. We reject it principally because it does not amount to pointing to anything done by the innocent party (the respondents) that could be said to amount to a clear abandonment of their rights in respect of the claimant's breaches. Further and in any event, the claimant's misconduct was unknown to the respondents until the investigation unfolded and they did include all matters relied on, apart from that of lying to Mr Towns, in the allegations that he was being asked to meet in the disciplinary process. As regards that matter, the full nature and extent of the conflict between the claimant's position in truth and that which he had adopted with Mr Towns did not become apparent until the claimant gave evidence to the Tribunal.
  151. In these circumstances, we are satisfied that Mrs Kearns' submission that the claimant was not dismissed was well founded. The contractual term on which the claimant sought to found was the respondents' implied duty of trust and confidence. But he himself was in breach of the duty incumbent on him that was the counterpart of that duty. That breach was plainly material. He was, accordingly, not entitled to terminate his contract of employment by reason of the respondent's conduct and the Tribunal were bound to conclude that he could not bring himself within the provisions of s.95(1)(c ) of the 1996 Act.
  152. Remaining Grounds of Appeal ( 2-5)

  153. We do not, accordingly, require to deal with the other grounds of appeal although we would observe that there was undoubtedly merit in grounds 2, 3 and 4. Dealing with matters shortly, as regards ground 2, insofar as the argument focussed on the Tribunal seeking to make excuses for the claimant's misconduct, we have already dealt with that and consider that the impression given in the judgment is that it does indeed go so far as leading to the conclusion that the judgment was perverse. We also accept that the Tribunal had no basis for concluding that Abigail Tierney's investigation of the allegations about GP was a sham; the Tribunal erroneously discuss the reason for her deciding to discontinue her investigation as being GP's stress and anxiety (para 391) yet in their findings in fact they had stated that the reason for discontinuing the investigation was that there was a lack of corroboration (para 307). In any event, even if there was a problem with the Tierney investigation of GP, that cannot have been of any relevance when considering Mr Towns' investigation of the allegations about the claimant. Although it was put as a case of unequal treatment, the logic of such an approach had to be not that the Towns investigation should also have been discontinued but that the Tierney investigation should have proceeded. We do not accept that considering Abigail Tierney's approach to investigating GP was of any relevance to the claimant's claim.
  154. Regarding ground 3, we would wish to highlight two matters. Firstly, when it came to considering whether or not the respondents' conduct amounted to a breach of the implied term of trust and confidence on which reliance could be placed for the claimant's case of constructive dismissal, they required to consider what conduct was actually relied on the claimant as having caused his resignation. They did not, however, restrict themselves to that; they listed nine matters (paragraph 347) a number of which could not be said to have been part of the claimant's reason for resigning. Examples are the Tribunal's inclusion of apparent unequal treatment as between the investigation of the claimant and the investigation of GP, and an apparent failure by Mr Towns to ask probing questions of witnesses. Neither of these had been founded on by the claimant. This meant that their considerations started from the wrong basis; instead of asking what the claimant was complaining of when he resigned, they have plainly considered what criticisms they were minded to level at the respondents for their handling of the investigation into the allegations that were made about him.
  155. Secondly, the Tribunal proceeded by testing what was done against their own view of how the investigation should have proceeded in the light of their conclusions as to whether or not the various allegations were well founded rather than considering what was the range of conclusions and approaches that were open to a reasonable employer (see, for example: paragraphs 168, 205, 210, 236 and most notably, 362). We agree with Mrs Kearns that the Tribunal do appear to have fallen into the substitution trap described most recently by the Court of Appeal in London Ambulance Service NHS Trust v Small [2009] EWCA 220.
  156. As regards ground 4, there are, again two matters which we would wish to highlight. The first is that the Tribunal rejected the respondents' case that s.98A(2) of the 1996 Act applied and that there should be a finding that the dismissal was fair. They did so on the basis that the respondents' breach was not procedural but "substantive". Other than so stating, they do not explain the basis for that conclusion. That is in circumstances where they had rejected the claimant's proposition that Mr Towns was on a witch hunt, had found that Mr Towns was entirely credible and where their criticisms all concerned the length, extent and cumbersome nature of his investigation. That is, on the face of it, the problem was an over - lengthy and cumbersome procedure but without any malice or ill will on the part of the investigator. The problems identified were procedural matters. We cannot find in the Tribunal's reasoning any basis for them finding that there was substantive unfairness on the part of the respondents.
  157. Secondly is the matter of the Tribunal's approach to the issue which they appear to have accepted remained (despite their conclusion that the respondents' failings were substantive rather than procedural), namely that of whether there was, in any event, a chance of the claimant being dismissed had the proper procedures been followed, not a question which they would have required to address unless in fact they regarded the failures as procedural ones.. They approach the question by referring to the fact that they have heard the evidence about the allegations and have been able to come to a factual view about whether or not they were well founded. That is the wrong approach. What they required to do was ask whether, assuming a fair procedure, the respondents could have genuinely believed the allegations to have been well founded and, if so, what were the chances of the claimant being dismissed in that event ( see: Software 2000 Ltd v Andrews and Others [2007] IRLR 568). In answering that question they would have required to take account of the evidence of Mr John Tomlinson, who would have been responsible for the conduct of any disciplinary hearing and who had indicated that in a number of respects, he would have regarded the allegations as gross misconduct. They also required to consider the evidence of Fiona Selbie who spoke to what would have happened on appeal to a committee of the respondent Council. The Tribunal rejected Mr Tomlinson's evidence as being speculative yet it was speculation only in the sense of giving an opinion as to what might have been an outcome in a given set of circumstances. That was exactly what was required. Further, they wrongly attribute Ms Selbie's evidence to him. In these circumstances, the Tribunal's conclusion that the chances of the claimant being dismissed in any event were so low as to be discounted is not supportable.
  158. We do not, however, propose to say any more about the second, third or fourth of ground of appeal in the circumstances, since, for the reasons we have explained, we are satisfied that the appeal should be upheld on the first ground alone. As regards the fifth ground of appeal, we do not propose to make any comment.
  159. Disposal

  160. We will, in the above circumstances, pronounce an order upholding the appeal, revoking the judgment of the Tribunal and dismissing the claim.


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