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||BAILII case number:  UKEAT 0329_04_1803
||Appeal No. UKEAT/0329/04
EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
||At the Tribunal
||On 18 March 2005
THE HONOURABLE MR JUSTICE WILKIE
BARONESS M T PROSSER
MR R N STRAKER
|MR P J DRAIN
|PINGUIN FOODS UK LIMITED
Transcript of Proceedings
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© Copyright 2005
|For the Appellant
||MR SPENCER KEEN
Messrs Graham Leigh Pfeffer & Co
85 Chapel Street
|For the Respondent
||MR DANIEL OUDKERK
Messrs White & Case
5 Old Broad Street
A barely adequate decision upheld, but only just.
THE HONOURABLE MR JUSTICE WILKIE
- This is an appeal by Mr Drain against a decision of the Employment Tribunal sitting at Norwich on 2 and 3 February 2004. The decision, sent to the parties on 17 February 2004, was that the Applicant's claim for unfair dismissal and damages for breach of contract failed, because of its finding that the Applicant had resigned, had not been constructively dismissed and, therefore, both claims failed.
- Mr Drain was a packing engineer who worked for the Respondents and their predecessors for a number of years until he resigned by letter dated 14 July 2003. Until the events which gave rise to the ending of his employment he had an unblemished record and was a valued employee.
- Indeed, it is the case that there had been a voluntary severance package as part of a redundancy scheme for which Mr Drain had applied but the Company exercised its discretion to refuse to accept him as a volunteer because at that time they needed to retain his services, skill and experience.
- Unfortunately, a state of affairs arose, which came to a head between 27 June and 14 July. There were, apparently, allegations of discontent amongst the workforce with Mr Drain's conduct. Mr Thrower, the Packing Manager, convened a meeting on 27 June with the purpose, as the Tribunal found, to discover what was going on. Mr Drain's view of that meeting was that it was by way of being a disciplinary meeting and was conducted in what he considered to be a bullying manner.
- Following an adjournment of the meeting on 27 June, the Applicant requested a compromise agreement. He indicated that he wanted the leave the Company's employment on the terms that had been offered to those who had got voluntary severance. The Respondent was minded to agree to such a compromise and, accordingly, a meeting was arranged for 30 June. By reason of the requirements of the legislation for such a compromise agreement to be effective each side had to have independent legal advice.
- The Company had, on a number of previous occasions, used the services of a local solicitors and, in particular, a Mr McGregor, who was a solicitor within that firm. They contacted Mr McGregor and he agreed to act on behalf of Mr Drain for the purposes of entering into a compromise agreement. It is apparent from his own witness statement that Mr Drain happened also to be a client of that firm, though somebody else was his solicitor and it was for purposes other than employment purposes.
- Mr Drain saw Mr McGregor and there was a private consultation between them. It is apparent that in the course of that consultation Mr Drain indicated that he had changed his mind and no longer wished to enter the compromise agreement.
- A problem arose concerning a draft reference which had been produced to Mr McGregor and Mr Drain as part of the paperwork. There was a dispute whether Mr McGregor had mislaid that reference or whether it had disappeared in some other way. Suffice it to say that, when Mr McGregor told the Respondent that Mr Drain no longer wished to pursue the compromise agreement, they asked for the documentation back, including that reference and, when it could not be found, there then occurred an incident. Mr Drain asserted that the Respondent's Manager, Mr Thrower, attempted to assault him in an attempt to search him for that reference.
- The Respondents disagreed with that account but they did accept that they had requested Mr Drain to permit them to search him in order to see whether he had the reference on him or with the papers which he had. Mr Drain declined and then left the premises during his working hours. It was common ground that, in response to that, Mr Thrower threatened him with termination of his employment if he did walk out, which indeed he did.
- The Tribunal concluded as a matter of fact that they preferred the version of this meeting given in evidence by the Respondent's witnesses, who included Mr McGregor, that there had not been an assault or an attempt at assault but that there had been a request that he be searched, which was refused.
- Suffice it to say, the Respondents responded to the events of 30 June by convening a disciplinary hearing to take place on Friday 4 July and they wrote to Mr Drain on 1 July setting out four matters which would be the subject of that meeting.
- The first was that he had unreasonably refused to obey a lawful instruction by refusing to undergo a security search. The second was that he had stated that the Company had no legal right to conduct such a search, notwithstanding that Mr McGregor, who had acted on his behalf at the time, had indicated that the Company had a legal right to reasonably request and conduct such a search and that, following that, he left the site. The third was that he refused to obey a lawful instruction by the employer to remain on site, the period of his unlawful absence being within normal working hours. The fourth was that he did not return to the site during the remainder of his paid working period.
- The letter then went on to assert that, whilst an employee had the right to refuse to be searched, any such refusal to be searched does constitute a breach of contract, which was the reason for the disciplinary action being taken against him.
- In response to that letter, Mr Drain wrote to the Respondent on 2 July in which he said that he had spoken to a solicitor, who had agreed to provide the Respondents with a written response to the letter of 1 July and, requested an adjournment of the disciplinary hearing to be held on 4 July until after his solicitor's letter had been received. He then identified the solicitors. On 3 July the Respondent replied maintaining the date of 4 July as being the hearing of the disciplinary matters. On 4 July, the solicitors acting for Mr Drain sent a lengthy letter to the Respondent, taking issue with their conduct during the period commencing with 27 June and indicating that there was no good reason for them to take disciplinary proceedings against Mr Drain, they said:-
"In the light of the above it is denied that you are entitled to either discipline or dismiss Mr D for any of the reasons set out in your letter dated 1 July 2003 or at all."
- In the course of setting out his case, the solicitors, at paragraph 2(c)(i) and (ii), gave a short version of what had passed between Mr McGregor and Mr Drain during their confidential meeting in the course of 30 June.
- The Respondents replied to that letter of 4 July by letter to the solicitors, saying that:-
"Mr Drain's disciplinary hearing is an internal matter between him as our employee and the Company as his employer."
- That, in turn, prompted a letter dated 8 July, from Mr Drain's solicitors in which it was said, amongst other things, that on 4 July, when Mr Drain handed their letter of 4 July, to the Respondent, the Respondent commented that they would not take into account any of the comments within that letter. His solicitors stated that if they did not consider the comments in the letter, then the Respondent would not be following a fair procedure in respect of the disciplinary process that they had commenced. They then made a request for certain other documents.
- The meeting of 4 July was adjourned to the 9 July and, on 9 July, Mr Drain wrote to the Respondent, without prejudice, saying that the meeting scheduled for that day would be out of order and indicated that he would not take part in those proceedings. Apparently, Mr Drain attended the meeting but then walked out, no doubt having delivered that document.
- On 11 July the Respondents wrote a lengthy letter to Mr Drain expressing concern that he had now walked out on them on two separate occasions and criticising him for certain other matters concerning the meeting of 9 July, but arranging for there to be a resumed hearing on 14 July and saying as follows:-
"We will consider the contents of your solicitor's letter of 04 July 2003 point by point, it having been confirmed by you to Mark Thrower at our last meeting that the solicitor's letter was, in fact, your submission to the Hearing, albeit written on your solicitor's letterhead. You also confirmed to Mark Thrower at our last meeting that there were no further documents you wished to table or rely upon at the Hearing."
and they then indicated that they would call Mr Addison as a witness at the disciplinary hearing. They conclude:-
"We do hope you attend as requested. We must advise you that if you do not attend, or refuse to speak when you attend, or simply walk out of the Hearing, we will have no choice but to hold the Hearing in absentia, which will include calling witnesses and taking statements to establish the facts of the case. We do hope it will not come to that."
- Mr Drain then, on 14 July, wrote his letter of resignation in which he says this:-
"I acknowledge receipt of your letter dated 11 July 2003, received on 12 July 2003.
Due to the way in which the Company has treated me by repeatedly depriving me of and breaching my employment rights (which included the matters set out in Dawbarns Pearson's letter to the Company dated 4 July 2003 and those set out below) you leave me with no alternative other than to resign from my employment with the Company as Packaging Engineer with immediate effect.
Despite the fact that I have asked for the documents numbered 1-6 in Dawbarns Pearson's letter dated 4 July 2003 they have not been provided to me by the Company in advance of the meetings scheduled for 2pm on 9 July 2003 and 11am 14 July 2003.
I consider that the Company has constructively dismissed me."
- In his IT1, where he alleges constructive dismissal, he included reference, in dealing with the events of 30 June, to what had transpired between him and Mr McGregor in private on that date. He concluded his IT1 by saying this:-
"Due to my employer's unacceptable behaviour. I claim compensation for Unfair Dismissal in the Employment Tribunal. My employer's actions amount for fundamental breach of contract between employer and employee. Due to a number of serious incidents.
- Harassment, bullying, humiliation and physical abuse
- False, unsupported accusations
I found myself being subjected to several unfair hearings, without any procedures in place, continual harassment, intimidation, lies, accusations. The company failed me as is their duty of care as my employer. I could not trust them to conduct a fair hearing. I had to resign my position – constructively dismissed.
This is a document which was settled by him personally, not with the assistance of legal advisers. It seems manifest to us that what he was claiming was constructive dismissal and that the heart of his claim was his allegation that there was a breach by the employer of the implied term of trust and confidence.
Consider my employer was in breach of his duty to me as an employer under the Employment Rights Act 1996."
The Tribunal decision, from paragraphs 2 to 13, deals with the events of 27 June, 30 June, the letter of 1 July and there is brief reference to what they describe as "remaining events". As we have indicated, they made certain findings of fact and, in so doing, they stated that Mr McGregor, in providing a statement for the Tribunal and giving evidence, did not act in breach of professional privilege. There is a discrete ground of appeal which asserts that the Tribunal erred in law in coming to that conclusion, but we have no hesitation in concluding that there is nothing in this point. It is perfectly clear that, in his solicitor's letter of 4 July, Mr Drain was waiving the privilege which had attached to the confidential meeting between him and Mr McGregor. He repeated this in his IT1 and he repeated it in his own witness statement. There was no privilege attached to Mr McGregor's witnessing events, which occurred between Mr Drain and the Respondents, such privilege as there was attached only to his confidential meeting with Mr Drain. Mr Drain, having on a number of occasions sought to rely on what was said between them on that occasion, it seems to us perfectly clear that he was waiving that privilege and that there was nothing to prevent Mr McGregor giving evidence of those matters. However, that really is a side show in this litigation.
The Tribunal then went on in paragraph 15 to say this:-
"We have considered very carefully whether in those circumstances (and we accept Mr Oudkerk's contention that those circumstances refer to the matters referred to in paragraphs 2 to 13) whether any breaches of contract have been committed by the employer."
They then state that the closest that their conduct got to breach of contract was the complaint that Mr Thrower and Mr Brown were conducting the disciplinary hearings whilst they had been witnesses to, at least one of the meetings, out of which the disciplinary proceedings arose. The Tribunal then set out why, in their view, that did not amount to a breach of contract per se and, in our judgment, they were entitled to come to that view.
They had previously made some criticism of the fact that the Respondent had been a little reluctant to take into account the documents provided by Mr Drain's solicitors in the period from 1 July through to 11 July but they did not conclude that there was any breach of contract in respect of that.
Apart from the matter of the involvement of Mr Thrower and Mr Brown, the only other matter to which the Tribunal refers which deals with the question of constructive dismissal, is in paragraphs 18 to 20. They say as follows:-
"18. We can understand the applicant's annoyance to some extent at the way he perceived he was treated, but the question also has to be asked as to what extent he brought that upon himself. It was he who was adjourning meetings, changed his mind as he was entitled to and indeed walked out of meetings. We do think the employer was slow to take into account on the 4th and eventually on 9 July his representation via his solicitors and indeed his own letter of 9 July.
19. With the benefit of hindsight, it would have been preferable for the employer to meet the applicant's concern head on and say " We understand your point about judge and jury, but in the circumstances since I, Mr Thrower, witnessed the behaviour, and I am the Manager, I see no reason at all why anyone else should deal with this matter and further you have a perfectly clear procedure for appeal if in the event I find against you."
Mr Kean has pointed out, as indeed was pointed out in the Notice of Appeal, that nowhere in this decision and in particular nowhere in either paragraphs 18 or 20 is there any reference whatsoever to the implied term of trust and confidence. This sufficiently concerned the President of the EAT that on a preliminary hearing, conducted on 22 June 2004, the President, sitting with Sir Alistair Graham and Ms Tatlow, ordered that the appeal be stayed until 31 July pending referral back to the Employment Tribunal to answer the question whether it considered the implied term of trust and confidence and whether the Respondent was in breach of that term, and, if so, its reasons for concluding (if it did) that the Respondent was not in breach of such term.
20. Thus while we have some sympathy for the applicant we feel he brought much of this upon himself. We have to decide whether he left as a result of a repudiatory breach by the employer. We are satisfied that no breach of contract has been established by the employer in this case and in such circumstances it is axiomatic that the claim must fail and we so rule."
That gave rise to a response from the Tribunal, set out in seven numbered paragraphs. We have been referred in particular to paragraph 3 in which they say this:-
We, of course, accept what the Tribunal says that it had in mind very much to the fore the question of the alleged breach of the implied term of trust and confidence. We have been greatly assisted in this matter by both Counsel but, in particular, by Mr Oudkerk, who has laid great emphasis on the first sentences respectively, of paragraphs 18 and 20. He says that we can read into those sentences that the Tribunal did approach of the question of the implied term of trust and confidence in the way in which has been developed in the authorities and, in particular, in the way identified by Lord Steyn in Malik v BCCI  3 ALLER page 1, in the course of which he said as follows:-
"First, the Tribunal is slightly surprised by the nature of the request, since in its respectful view, it appears axiomatic from the findings that there was no breach of the implied term of trust and confidence by the employer. Secondly, it is of the view that no breach could be implied from the findings of facts as set out, we hold clearly, in the extended reasons promulgated on 17 February 2004. Thirdly, the applicant expressly raised the issue of breach of trust and confidence in the closing submissions. We considered that point in detail. We preferred the evidence of Mr McGregor and Mr Thrower to that of the applicant where there was conflict and also reached a finding that the appropriate person conducted the disciplinary hearing for the reasons set out in the decision. In such circumstances, in our view, there was very little scope for finding any breach by the employer of the duty of trust and confidence."
"In assessing whether there has been a breach, it seems clear that what is significant is the impact of the employer's behaviour on the employee rather than what the employer intended. Moreover, the impact will be assessed objectively."
What Mr Oudkerk says, is that in the first sentence of each of these two paragraphs, the Tribunal has explicitly considered the impact of the employer's behaviour on Mr Drain "we can understand the Applicant's annoyance to some extent" and "thus while we have some sympathy for the Applicant" and, in addition, they applied an objective test in paragraph 18 "but the question also has to be asked as to what extent he brought that upon himself" and, in paragraph 20, "We feel he brought much of this upon himself." He says that is sufficient to identify, both for the unsuccessful applicant and for this Tribunal, why it is that Mr Drain did not succeed and that the correct legal test was being applied.
After a great deal of hesitation and with misgivings, we are persuaded by Mr Oudkerk that this decision and, in particular, paragraphs 18 and 20, just pass muster as a statement by the Tribunal of a correct approach to the question whether there was a constructive dismissal by reason of a repudiatory breach by the employer of the implied term of trust and confidence.
We appreciate that Mr Ash is an extremely experienced Chairman. We are surprised that he was taken aback by the request by the President of the EAT for him to clarify the decision. We think that the reasoning in the decision would have been greatly improved had he and his colleagues explicitly acknowledged what it was that Mr Drain was complaining about by way of the alleged breach of the implied term of trust and confidence.
They could then have set out briefly what the implied term amounts to and what the proper approach should be, rather than leaving it to this Tribunal to have it explained for us by Mr Oudkerk on the hearing of the appeal. As we have said, we are satisfied by his explanation that, in fact, this Tribunal did come to a decision which was correct in law, but we are far from being satisfied that the quality of the decision was that which Mr Drain and this Tribunal is entitled to expect, though we do accept that it does pass muster by reference to the decision in Meek v City of Birmingham District Council  IRLR 316.
It therefore follows that this appeal must be dismissed.
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