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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Hartwell Services Ltd v Chambers [2001] EWCA Civ 774 (15 May 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/774.html Cite as: [2001] EWCA Civ 774

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM EMPLOYMENT APPEAL TRIBUNAL
(HHJ D PUGSLEY)

		Royal Courts of Justice Strand London WC2 Tuesday 15th May 2001

Tuesday 15th May 2001

1. LORD JUSTICE THORPE: Clarke LJ will give the first judgment.
2. LORD JUSTICE CLARKE: On 18th July 1997 the respondent employee, Mr AGJ Chambers, resigned as a business manager employed by the appellant, Hartwell Services Ltd. He complained that he had been constructively dismissed and made a claim for unfair dismissal in an Employment Tribunal ("ET"). His claim failed. In a decision dated 5th June 1998 the ET, which comprised Mr JG Hollow as Chairman, and Mr A Kapur and Mr E Collins as members, held that he had not been constructively dismissed but resigned. It did not consider separately whether he had been unfairly dismissed.
3. The employee appealed to the Employment Appeal Tribunal ("EAT"), comprising His Honour Judge Pugsley as Chairman, and Lord Davies of Coity and Miss SM Wilson as members. The EAT allowed his appeal on 11th January 2000. It remitted the matter to a differently constituted ET to decide whether he had been unfairly dismissed.
4. The employer appeals to this Court, pursuant to permission granted by Mummery LJ. The principal ground of appeal is that the conclusion that the employee resigned and was not constructively dismissed involved permissible determinations of fact by the ET, which the EAT had no jurisdiction to disturb. It is further submitted that the EAT wrongly permitted the employee to advance a case which had not been put before the ET.
5. The relevant facts are these. The employee had originally been employed by the employer as a sales executive, at which he was very successful. He later left, but was reemployed by the employer as a business manager from 5th March 1995 until 18th July 1997, when he resigned. The employer is a large company of motor dealers with premises at various places, including Botley Road and Cowley in Oxford and somewhere in Luton. From March 1995 the employee was employed as a business manager, first at Cowley and then at Botley Road.
6. In early 1997 the employer received certain complaints from customers as to the employee's performance. During the summer of 1997 its senior management became concerned about the performance of the Botley Road depot and in particular about the employee's performance there. The ET found that there were such concerns, but expressed no conclusion as to whether or not they were well founded.
7. Mr Marcus Briggs had been employed by the employer as a business manager before leaving to join a rival dealership in January 1997. He subsequently became disillusioned with his new employers. He was a friend of a Mr Robert Law, who was the appellant employer's Group Finance & Insurance Manager. Mr Briggs and Mr Law discussed the position and Mr Law offered him the post of a business manager at Botley Road. He gave notice to his employers some time in June and was released to enable him to start with the appellant employer on Monday 7th July 1997.
8. In the meantime the employee was due to start a fortnight's holiday after work on 3rd July. On the afternoon of that day he attended a meeting with Mr Law and with Mr Whitton and Mr Hutchby, who were respectively the general manager and the sales manager at Botley Road. They did not tell the employee of the employment of Mr Briggs as from the following Monday, although they were, of course, all well aware of it.
9. The ET held that the employee was aware of the meeting before it was held. At the meeting there was a discussion of the employee's sales figures and his future role with the company. He was told that they were not entirely happy with his role as business manager and wanted him to revert to the post of sales executive and to do so at Luton, which was rather nearer his home than Oxford. The ET accepted the employee's evidence that the effect on his salary was discussed. He was told that his salary would probably be about £3,000 a year plus commission, as compared with his existing salary of £8,000 per year plus commission. He estimated that he would lose £1,000 a month in commission earned. The ET held that the employee did not view the proposal at all well and emphatically indicated that he was not prepared to accept it. The meeting was adjourned for about three-quarters of an hour to an hour and the employee was invited to return to his office and think about it.
10. He did so, but when the meeting reconvened he was still of the same view and indicated that he would not be prepared to accept the proposal. There was an issue between the parties as to what happened next, which was resolved by the ET as follows:

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

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

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

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

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

11. The employee did not return to Botley Road but informed the employer of his resignation in a letter from his solicitors dated 18th July 1997. The letter set out his version of the events of 3rd July. It is clear that by the time the letter was written the employee had been told about Mr Briggs' employment, because the letter included these two paragraphs, which were subsequently quoted by the EAT:

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

We have set out the incident in great detail because it is indicative not only of a breach of an expressed term of the contract ie, a reduction in salary and status but also, a breach of the implied term of mutual trust and confidence and the search of the office could be deemed harassment. We are quite certain that the Industrial Tribunal will take an extremely serious view of the events on 3rd July, which have directly caused our client to resign with immediate effect."

12. The question before the ET was whether, by that letter, the employee simply resigned or whether he had been unfairly constructively dismissed.
13. As I have already said, the ET held that he simply resigned, but the EAT allowed an appeal from that decision. The question for decision in this Court is whether the ET erred in law in reaching its conclusion. Peter Gibson LJ, with whom Henry LJ and Sir Christopher Slade agreed, set out the correct approach for this Court to adopt in a case of this kind in Mensah v East Hertfordshire NHS Trust [1998] IRLR 531 at 533-34:

"In my judgment the proper approach for this court as a second-tier appellant court is to concentrate not on whether the Employment Appeal Tribunal was wrong in law but whether the industrial tribunal erred in law (see, for example, Campion v Hamworthy Engineering Ltd [1987] ICR 966 at p 972). Without there being such error of law by the industrial tribunal there was no jurisdiction for the Employment Appeal Tribunal to interfere."

14. The relevant test for constructive dismissal is not in issue. The ET described the position thus in paragraph 16:

"An employee is dismissed for the purposes of section 95 of the Employment Rights Act 1996, inter alia, if he terminates his employment, with or without notice, in circumstances whereby he is entitled to do so without notice by reason of the employer's conduct. This principle has been explained in the leading case of Western Excavating (ECC) Ltd v Sharp [1978] IRLR 27 CA. The applicant must show - and it is for him to show - that the employer has been guilty of conduct amounting to a breach of the contract of employment or otherwise shows that he no longer intends to be bound by one or more essential terms of the contract. It must be a fundamental breach going to the root of the contract entitling the employee to resign without notice and that he must resign because of that breach. He must not delay his resignation since if he does he may be deemed to have affirmed the breach. We bear in mind that a breach of contract may arise as a result of one isolated incident or as a result of the cumulative effect of a number of instances which may not, taken separately, amount to individual breaches."

15. The ET might also have referred to the later well-known decision of the EAT in Woods v WM Car Services (Peterborough) Ltd [1981] ICR 666, where the Chairman was Browne-Wilkinson J. He summarised the principle thus at page 671D-E:

"In Western Excavating (ECC) Ltd v Sharp [1978] ICR 221, this conflict was resolved in favour of the view that the conduct of the employer had to amount to repudiation of the contract at common law. Accordingly, in cases of constructive dismissal, an employee has no remedy even if his employer has behaved unfairly, unless it can be shown that the employer's conduct amounts to a fundamental breach of the contract."

16. It follows that it was important for the ET to identify the alleged breaches of contract, to reach to a conclusion as to whether each breach was proved, and, if so, to consider whether either singly or together it or they amounted to a repudiatory breach of the contract entitling the employee to bring the contract to an end.
17. What then were the alleged breaches? The ET summarised the employee's case in paragraph 14 of its reasons. When it did so it had available written submissions from the employee's solicitor, Mrs Harris, who had represented him at the hearing. It also had written submissions from Mr Prichard, who had represented the employer before the ET, as he did both before the EAT and before us. We were told that, because of lack of time, no oral argument was addressed to the ET.
18. In the employee's written submissions the following breaches of contract were alleged. The first was the employee's demotion from Business Manager to Sales Executive. It was said that an imposed demotion, without good reason, is in breach of a contract of employment. The second was the reduction in pay and commission. It is not, I think, in dispute that an imposed demotion or reduction in pay, without good reason, would be a breach of the contract in the instant case. The third was a breach of the implied term of mutual trust and confidence, which is implied in every contract of employment. Two instances of the breach of that term were alleged. They were the alleged 'frogmarch' from the employee's office and the subsequent search of his office.
19. The part of the employee's case which has formed the central part of the argument on this appeal (as it did before the EAT) was that the true reason why the employer wanted to demote the employee and move him from Botley Road was its decision to appoint Mr Briggs as business manager there. In her written submissions, Mrs Harris put the argument in this way, after setting out the breaches of contract in substantially the same terms as I have done above:

"The applicant asserted that the reason he was ousted from his position as Business Manager at Botley Road was because Mr Briggs who had left the company in January wished to return. On Mr Briggs' evidence, he told Mr Law who is a personal friend that he was not too happy with his employment with Ixion at the end of March. On or around the end of April, he again told Mr Law that he had decided not to accept the position with Jaguar Mazda offered to him by Ixion. Sometime in June, he spoke again to Mr Law and told him he was 'fed up' which resulted in Mr Whitton offering him a job at Botley Road about mid June. He handed in notice as soon as he been offered the job. He had to give four weeks' notice and so his notice period would have expired mid July. In the event, he only worked three weeks of his notice and returned to Botley Road in the applicant's job on 7th July.

The Tribunal may consider that the treatment meted out to the applicant was entirely due to Mr Briggs' wish to return to Botley Road. Both Mr Whitton and Mr Hutchby stated that there had been two previous Business Managers and therefore, it was not inconceivable that Mr Briggs and the applicant could work together. The Tribunal may consider whether the respondent is being truthful on this point. It was clear from the evidence that no one told the applicant that Mr Briggs was going to return and Mr Law expected the applicant to take up the new position in Luton on his return from holiday. It may therefore, be concluded by the Tribunal that the respondent company had no intention of having two Business Managers.

It is submitted that the breach of contract is clearly demonstrated and that the applicant resigned in response to it."

20. It is fair to say that it was not submitted in those written submissions that those considerations themselves gave rise to a breach of the implied term of mutual trust and confidence.
21. However, it is right to observe, as the EAT did, that the employment of Mr Briggs as a business manager played an important part in the employee's case from the outset. I have already quoted the two relevant paragraphs in the resignation letter of 18th July. In addition in his written application to the ET, the employee exhibited a statement which he had made which set out the events of 3rd July and which included the following paragraphs, the last two of which were quoted by the EAT:

"I felt extremely humiliated, embarrassed and upset at my treatment. I knew that I could not go back to work at the Oxford site and I did not wish to take up the offer of a lower position at the Luton site.

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

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

22. It was appreciated on behalf of the employer from the outset that the reasons for the appointment of Mr Briggs were potentially significant. Thus, in paragraph 5 of the statement attached to its notice of appearance, the employer expressly denied that the appointment of Mr Briggs had an effect on the employee's position. It asserted that the Botley Road branch had previously employed two branch managers and that a decision had been made to do so again.
23. Moreover, in Mr Prichard's written submissions, which were drafted before he saw those of Mrs Harris and which he did not change after seeing them, he summarised the employee's case as he understood it as follows:

"At its briefest the applicant's case, extracting it from the IT1, appears to be

(a) That he was 'offered an inferior job at a lower salary'.

(b) 'Their behaviour on frogmarching me through the office was a breach of the implied term of mutual trust and confidence and may even be termed harassment'.

(c) The incidents in his own office left him 'humiliated embarrassed and upset' at his treatment and he says 'I knew that I could not go back to work at the Oxford site.'

(d) When I spoke during an objection to oral evidence, Mrs Harris did confirm that it was her client's case that the respondent's criticisms of the applicant were a sham and a pretext - no less - to facilitate Mr Briggs return.

(e) Mr Briggs' appointment as a business manager in his absence was a breach of the contract."

24. It thus appears that Mr Prichard was under the impression that it was the employee's case that Mr Briggs' appointment as a business manager was a breach of contract. It is difficult to see what that alleged breach can have been if it was not a breach of the implied term of mutual trust and confidence. It is also to my mind of some significance to note that Mr Prichard observed in paragraph (d) that Mrs Harris had confirmed during the hearing that it was the employee's case that the employer's criticisms of him were a 'sham' and a 'pretext' to facilitate Mr Briggs' return. Mr Prichard's written submissions contained a detailed discussion under the heading: "Were the respondent's criticisms a sham?" They also contained detailed submissions under the heading: "Marcus Briggs". The ET summarised Mr Prichard's submissions in this way at paragraph 15:

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

25. In these circumstances, the question is whether it was incumbent upon the ET to reach conclusions upon the significance of the employment of Mr Briggs. Mr Hogarth submits that it was for two reasons.
26. First, he submits that the appointment of Mr Briggs was relevant to the employee's case that the criticisms of the employee were a 'sham' and thus to the question whether the proposal that the employee should be demoted to sales executive, with significant loss of commission, was indeed a mere proposal or an expression of a fait accompli. He submits that both parties expected the ET to make findings on that topic and that the ET's conclusions are legally flawed by its failure to do so.
27. Secondly, Mr Hogarth submits that the employment of Mr Briggs to replace the employee was a breach of the implied term of mutual trust and confidence. Mr Hogarth relies upon the formulation of the term in the judgment of Browne-Wilkinson J in Woods at page 670G-671A as follows:

"In our view it is clearly established that there is implied in a contract of employment a term that the employers will not, without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee: Courtaulds Northern Textiles Ltd v Andrew [1979] IRLR 84. To constitute a breach of this implied term it is not necessary to show that the employer intended any repudiation of the contract: the tribunal's function is to look at the employer's conduct as a whole and determine whether it is such that its effect, judged reasonably and sensibly, is such that the employee cannot be expected to put up with it: see British Aircraft Corporation Ltd v Austin [1978] IRLR 332 and Post Office v Roberts [1980] IRLR 347. The conduct of the parties has to be looked at as a whole and its cumulative impact assessed: Post Office v Roberts."

28. That approach was recently adopted by the House of Lords in Mahmoud v BCCI [1998] AC 20: see per Lord Steyn at page 45, where he observed that it had been approved in Lewis v Motorworld Garages Ltd [1986] ICR 157 and in Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] 1 WLR 589.
29. Mr Hogarth also draws our attention to a further passage in the judgment of Browne-Wilkinson J in Woods at page 671A-H as follows:

"Experience in this appeal tribunal has shown that one of the consequences of the Western Excavating case has been that employers who wish to get rid of an employee or alter the terms of his employment without becoming liable either to pay compensation for unfair dismissal or a redundancy payment have had to resort to methods of 'squeezing out' an employee. Stopping short of any major breach of contract, such an employer attempts to make the employee's life so uncomfortable that he resigns or accepts the revised terms. Such an employer, having behaved in a totally unreasonable manner, then claims that he has not repudiated the contract and therefore that the employee has no statutory right to claim either a redundancy payment or compensation for unfair dismissal.

It is for this reason that we regard the implied term we have referred to as being such of importance."

30. Mr Hogarth submits that this is such a case on the facts, that the ET should have appreciated that the employee's case was being put in this way amongst others and that it should have made findings of fact with regard to it.
31. Mr Prichard submits that the case was not put in this way before the ET and that the EAT should not have permitted Mr Hogarth to rely upon particulars of the breach of the implied term which were not relied upon before the ET. Mr Prichard relies, for example, on the decisions of this Court in Jones v Governing Body of Burdett Coutts School [1998] IRLR 521 and Mensah v East Hertfordshire NHS Trust [1998] IRLR 531. Mr Hogarth accepts, as he did before the EAT, that the employee should not be permitted to argue new points, but submits that his submissions were before the ET.
32. The ET put its conclusions in this way at paragraphs 17-19:

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

18. The unanimous view of the Tribunal is that, whilst the respondents might have handled the situation more sensitively in particular by writing to him and confirming the discussion that they had had and the proposal that was put forward, the respondents' conduct as a whole did not amount to a breach of the applicant's contract of employment.

19. We find that the applicant resigned. He was not dismissed and accordingly the application fails."

33. The first of the two submissions made by Mr Hogarth which I identified earlier is whether it was necessary for the ET to make further findings of fact in order to reach the conclusions which it did. The ET concluded that the employer was not in breach of contract as a result of anything said or done on 3rd July or in the letter of 11th July. In short, its conclusions were that the proposal that the employee should move to Luton as a Sales Executive was just that, namely a proposal, that the employee was not 'frogmarched' from office to office and that the conduct of the representatives of the employer in the employee's office did not amount to a breach of the implied term of mutual trust and confidence.
34. Mr Prichard submits that those findings are conclusive against the employee and relies upon the decision in Woods, both in the EAT and in this court, where it is reported at [1982] ICR 693. He also relies upon Mensah. He submits, in particular, that the ET made a clear finding that the suggested move to Luton was no more than a proposal, as stated at the end of paragraph 19, and relies upon the earlier findings in paragraphs 6 and 11 that the employer had genuine concerns about the performance of the employee as a business manager and that it was not satisfied that the employer was actively seeking reasons to discipline the employee. Mr Prichard, moreover, submits there was evidence to support those findings.
35. I accept those submissions so far as they go. I have not found this an easy appeal to decide, but I have reached the conclusion that the decision of the ET was flawed in principle because it failed to address a key part of the employee's case which was put before it. As I demonstrated earlier, it was the employee's case that the reasons given for suggesting that the employee should move to Luton as a sales executive for less pay were not genuine or based upon well-founded concerns but were a sham in order to enable him to be replaced by Mr Law's friend Mr Briggs. In this regard it was the employee's case that the employer had no intention of employing more than one business manager at Botley Road and that they made it clear to the employee on 3rd July that he was being demoted.
36. I accept, of course, Mr Prichard's submission that the subjective intentions or motives of one party to a contract, not communicated to another, are not by themselves determinative of the question in a case like this, which is whether the employer evinced an intention no longer to be bound by the contract: see Lewis v Motorworld Garages Ltd per Ackner LJ at pp 165-6.
37. However, Mr Prichard correctly accepts that the motives of the employer in a case of this kind are at least potentially relevant. For example, on the facts of the instant case, both parties' advocates accepted that the question whether the employer had any intention of having two business managers at the same time was relevant. Thus the employee alleged in its outline submissions, quoted above that the employer had no such intention, whereas the employer alleged in its outline submissions under the heading "Marcus Briggs" that Mr Briggs was engaged as a business manager and not as the business manager at Botley Road. In paragraph 12 of their reasons, which I quoted earlier, the ET set out the employer's evidence to that effect, but it nowhere made any finding on this point one way or the other. In paragraph 17 it said that it was tempting to accept the employee's proposition that he was being moved out of Botley Road to make way for Mr Law's friend Mr Briggs, but as I read that paragraph the ET did not make a finding one way or the other. It certainly did not reject the employee's submissions on this point.
38. To my mind the timing and basis upon which Mr Briggs was engaged was relevant to what the representatives of the employer said and did on 3rd July and as to how what they said and did was to be objectively understood. There was an issue as to whether what they said and did amounted to a mere proposal or offer, or whether it was a fait accompli and amounted to a repudiatory breach of the contract. It was much more likely that it came into the latter and not the former category if the employer never intended to have two business managers at Botley Road at the same time. The submission that the employer did not intend to allow the employee to return to Botley, having employed Mr Briggs, was a central part of the employee's case, upon which he was, in my opinion, entitled to a decision from the ET. In these circumstances, in my judgment, the ET should have resolved that question, either by making a clear finding one way or the other or by deciding it on the burden of proof, but it did neither.
39. The EAT summarised the position in this way in paragraph 21 of its reasons:

"It is quite true to say that in the Originating Application the appellant does not set out in terms the allegation that the recruitment of Mr Marcus Briggs was, in itself, a breach of the implied term of mutual trust and confidence, but it is clear from the passage already cited in the Original Application that he put the whole basis of his case on the recruitment of Mr Briggs."

40. I respectfully agree. Although my analysis of the case is not quite the same as that of the EAT, I have reached the clear conclusion that the ET's failure to make findings of fact on this important question, which was clearly before it, amounts to an error of law because it was necessary to resolve the question whether the employer intended to permit the employee to return to Botley Road as business manager, having employed Mr Briggs, in order fairly to resolve the question whether what the employee was told on 3rd July amounted to a repudiatory breach of contract or was a mere proposal. This case is thus unlike cases such as Woods and Mensah, to which we were referred.
41. That conclusion makes it unnecessary to consider Mr Hogarth's second submission, which undoubtedly faces the difficulty that particulars of the breach of the implied term of mutual trust and confidence were limited to the two points made in the employee's closing submission, even though Mr Prichard seems to have thought that it was being alleged that the employment of Mr Briggs was a breach of that term. That seems to me to make sense because if the ET had concluded that the reasons put forward for moving the employee to Luton were indeed a sham, as alleged, an allegation that the employer was in breach of that implied term might be difficult to resist. This is a matter which would probably have been resolved during oral argument, if there had been any. However, in the light of the conclusions which I have already reached it is not necessary to consider this point further.
42. In all the circumstances, I would dismiss the appeal. As I see it, unless the whole dispute can be resolved by agreement or perhaps through ADR, it will have to be remitted to a differently constituted ET, where the matter can be fully debated and finally determined. I would only stress by way of postscript that nothing in this judgment should be taken as expressing any view on the facts, which will, of course, be entirely a matter for the ET.
43. LORD JUSTICE LAWS: I entirely agree. Once it is appreciated that the respondent employee had from 18th July onwards complained that his employers had intended to move him so as to make room for Mr Law's friend, Mr Briggs, it is inescapable in my judgment that the ET were obliged to deal with the point. Like any public fact-finding body it was their general duty to deal with all the substantive points raised before them. As my Lord's account of the facts and issues in the case demonstrates, the complaint about Mr Briggs was necessarily material to the issue whether there was a breach of the implied term of mutual trust and confidence. I cannot think that the ET were relieved of their duty to address the complaint by reason of the fact that the respondent's solicitor categorised the alleged breaches of the implied term more narrowly. Such a proposition would commend altogether too formalistic an approach. No such approach is required by the case of Mensah or any other learning in the field. It is accepted, and I certainly accept, that an appellant from the ET cannot take what is truly a new point in the EAT, but there was no new point here. In the circumstances the decision of the EAT cannot, in my judgment, be impeached. I too would dismissed the appeal.
44. LORD JUSTICE THORPE: I agree with both judgments.
ORDER: Appeal dismissed with costs.