Mulholland v OTIS Ltd  (02807/00 Constructive Dismissal/Notice Pay)  (29 April 2002)
THE INDUSTRIAL TRIBUNALS

CASE REF:	02333/00
02807/00

APPLICANT:	W R Mulholland

RESPONDENT:	OTIS Ltd 

DECISION
The unanimous decision of the Tribunal is that the Applicant was constructively dismissed by the respondent, but is not entitled to twelve weeks’ pay in lieu of notice.   

Appearances:
The applicant was represented by Mr J Patterson, Amalgamated Electrical & Engineering Union.
The respondent was represented by Mr C R Johnson, Engineering Employers Federation.

Extended Reasons
Pursuant to Rule 10(4)(d) of Schedule 1 of the Industrial Tribunals (Constitution & Rules of Procedure) Regulations (NI) 1996, this decision is given in extended form.

The Tribunal Found the Following Facts

1.	The Applicant was born on 20 November 1945.  In his Originating Application presented on 6 September 2000, the Applicant complained of constructive dismissal.  By a further letter to the Industrial Tribunal dated 29 September 2000, the Applicant alleged that the Respondent had breached his contract in not paying his “termination of contract monies, i.e. 12 weeks’ salary”.  In its Notice of Appearance presented on 3 October 2000, the Respondent denied any fundamental breach of the Applicant’s contract tantamount to constructive dismissal, and in the alternative asserted that if the Applicant was dismissed it was by reason of capability or some other substantial reason that justified the dismissal.  In a further Notice of Appearance presented on 7 November 2000, the Respondent alleged that the Applicant had been employed from 20 November 1961 to 14 September 2000, when he had voluntarily resigned his employment.  The Respondent also denied that it had breached the Applicant’s contract of employment as alleged or at all.

2.	The Tribunal found that the Applicant had worked for the Respondent since the late 1960s on a 37.5 hours per week contract of employment.  At the time of the termination of his employment he had a salary of £26,379.00 gross.  The parties agreed that the Applicant’s gross weekly pay was £507.28; nett weekly pay was £345.20, plus £69.23 per week nett for the use of the Company car, plus £34.33 per week employer’s contribution to the Applicant’s pension.  Therefore, the Applicant’s total nett weekly wage was £448.76.  His work involved the construction and service of lifts on location.  He was promoted to the position of Supervisor.  His region of duty was the Irish Region, and he was based largely in the Belfast office of the Respondent Company.

3.	Using the Company’s Dialogue Procedure, at a meeting held in late 1998 or early 1999, the Applicant aired his grievance that he was overworked.  The Applicant worked with Mr Maguire, and there had been a considerable growth in the demand for their services, and the Applicant felt that there was no corresponding assistance given him by the Respondent.  The Applicant used the grievance procedure set out in his written terms and conditions of employment.  Thereafter, a meeting was called, attended by Mr Brendan Holleran (Irish Regional Director) and Mr Houston (the Applicant’s line manager).  On foot of the meeting, Mr Holleran decided to check the figures in respect of the Applicant’s workload.  The figures indicated that the Applicant supervised 70-80% more people than Mr Maguire, worked 10% more hours, and was responsible for about 75% more units. 

4.	In late 1998 or early 1999, the Applicant took a second grievance to Mr Houston.  This was the fifth or sixth such oral complaint.  One aspect of the Applicant’s grievance was that the Respondent was understaffed by three operatives.  The Applicant asked for more assistance, but Mr Houston would not contemplate this.  The Applicant asked Mr Maguire to take up some of his duties, but Mr Maguire objected on the grounds that he too was overworked as it was, to the extent that he was not meeting his targets.  Therefore, Mr Maguire declined to assist the Applicant in this regard.  Mr Maguire also complained to management, but did not receive any satisfactory response.  Mr Maguire felt that Mr Houston had a bullying style of management. 

5.	On 15 March 1999, Mr Houston placed an advertisement for a project manager’s post with a rival company (Schindler Lifts) on the desks of the Applicant and Mr Maguire.  The Applicant did not know why he had done this.  Mr Maguire was interviewed for this post and left to join Schindler around 20 March 1999.  This meant that the Applicant had to complete Mr Maguire’s duties as well as his own.  This exacerbated the Applicant’s workload all the more.  He went from supervising 16 people to 26 people, and thus had to cover an area from Enniskillen to Donegal to Portrush to Belfast.  The Applicant was now working eight or nine hours a day, working at his desk over lunchtime, and frequently was on call for 24 hours.  The Applicant asked frequently for a meeting with Mr Houston to discuss same.  Mr Houston kept deferring this meeting. 

6.	The Applicant went on sick leave on 23 April 1999.  Prior to that he had attended his General Practitioner, Dr Shorten, complaining of exhaustion and body pains.  He had difficulty sleeping, and with co-ordination.  The doctor prescribed a tranquilliser and an anti-depressant.  The Tribunal read in evidence a letter from Dr Shorten dated 20 April 2000, which stated:

“On 27 April 1999, [the Applicant] presented with a severe anxiety condition.  This was precipitated by reported increased workload over the previous 6 months…He was reviewed again on 30 April 1999.  This time he reported early morning wakening; again he related this to the pressures of work and felt that his employer had been unsupportive.

…Mr Mulholland has not had previous history of anxiety or depressive illness prior to this incident.

…Mr Mulholland is a 55-year-old (sic.) gentleman who developed an acute anxiety/ depressive illness due to perceived difficulties in his working environment.  This has presented into a chronic condition with a breakdown in the relationship between employer/employee.  Because of this I would consider this problem as irretrievable and would not see Mr Mulholland returning to provide effective employment.”

7.	Although Mr Houston may have tried to telephone the Applicant once or twice a month, he never managed to speak to the Applicant on the telephone.  On 29 June 1999 he received a note from Mr Houston who asked the Applicant to contact him.  The Applicant replied by letter dated 30 June 1999, advising that he would attend a meeting if he were advised of the agenda.  Mr Houston never replied to this letter.  The Applicant had no direct contact with the Respondent from 23 April 1999 to 2 March 2000.  In evidence, Mr Houston accepted he should have contacted the Applicant after one month’s absence.  Moreover, Mr Button (Respondent Manager) accepted in cross-examination that “there was a gap of 12 months when a lot of people fell through the system”, and that Mr Houston “could not cope with the problem and closed the door on it”.  In a letter from Mr Button, dated 12 April 2000, the Respondent asked the Applicant for permission to contact his GP, which permission the Applicant had already given in writing on 23 March 2000.  The Applicant remained on full pay from 23 April 1999 until it was stopped on 1 June 2000.  Mr Button stated in evidence that he had taken the decision to stop the Applicant’s full pay, and that he realised this would put some pressure on him.  The Applicant received a letter dated 2 March 2000, requesting him to speak to Gill Phillips (Respondent Human Resources Manager).  The Applicant met Ms Phillips and Mr Button on 21 March 2000.  The Respondent suggested that the Applicant transfer to its Dublin office, which the Applicant declined.  Mr Button apologised for the fact that the Respondent had not contacted the Applicant earlier.  Mr Maguire’s position was advertised on 23 April 1999, and was still not filled by the time the Applicant resigned.  Mr Maguire was replaced in November 2000.  Mr Houston accepted in evidence that there had been a difficulty with recruiting replacements as existing workers felt the Supervisors’ jobs “were too much hassle”.

8.	The Applicant resigned by letter dated 7 August 2000.  By that date, the Applicant felt very low self-esteem.  His medical problems were exacerbated by the realisation that his work problems were not going to resolve, and he felt that his career was at an end at the age of 54 years.  His sleep disruption was somewhat worse than in April 1999, and he felt extremely depressed.  The Applicant became reclusive and moody, and when he did go out he took long walks alone.  In the summer of 2000, he was living with a partner.  Then he had to sell his house because he could not afford to keep it and lost the stamina and interest to maintain it.  The Applicant separated from his partner and moved into rented accommodation for a while, before moving in with his son.  The reason for the resignation, as given in the letter of 7 April 2000, was that the Applicant felt that he “could not reasonably be expected to continue on with the Company as it has breached its terms and conditions with me in such a fundamental manner”.

9.	By letter dated 4 August 2000, Mr Button asked the Applicant to see a Consultant Psychiatrist on 22 August 2000.  Mr Button accepted in evidence that the Company had made no effort to find the Applicant alternative work at that time.  The Applicant did not keep this appointment, since by that date he had tendered his resignation.  The Applicant wrote to Mr Button on 11 August 2000, and indicated he wished to retire by entering the Company pension scheme.  Mr Button replied by letter of 16 August 2000 stating that, as he had now recorded his grievance in writing, “I am better placed to investigate your complaints than I was when we held our informal unrecorded discussions.  I therefore intend to hold a full investigation and will advise you of the outcome, and invite you to comment on my findings, as soon as this exercise has been carried out”.  By a letter dated 25 August 2000, Mr Button advised the Applicant that his investigation had been completed.  Mr Button stated in evidence that he had presumed that the Applicant would not wish to be interviewed as part of the investigatory process.  Mr Button found that the Applicant’s contract had been operated fairly and that the Applicant had not been treated differently to any other employee.  Mr Button offered the Applicant a meeting with Mr Houston upon his return to work in an attempt to alleviate the stress that he associated with his job.  He indicated that if he the Applicant did not respond by 14 September 2000, the resignation would take effect from that date.  Mr Button accepted in evidence that no notes or records of this investigation were made, and that when he made the decision to set the effective date of termination of 14 September 2000, he had made no effort to find the Applicant suitable alternative or lighter duties.  The Applicant felt insulted by the letter, which he regarded as suggesting that the fault lay with him.  Nor was he impressed by this offer, and felt that it was not pragmatic to suggest he return to work, since Mr Maguire had still not been replaced.  The Applicant did not respond to the letter.  He returned the Company car on 14 September 2000, and thereby affirmed his written resignation owing to constructive dismissal on that date. He came off Incapacity Benefit after his resignation, and claimed Job Seeker’s Allowance.  However, he did not receive Job Seeker’s Allowance because he was in receipt of the Company pension of £450 nett per month.  On 14 September 2000 the Applicant was aged 54 years.

THE DECISION OF THE TRIBUNAL

10.	Having considered the Originating Application, Notices of Appearance, all the evidence before it (oral and documentary) and the representatives’ submissions, the Tribunal unanimously determines as follows;

(i)	The Tribunal has been mindful of its duty, generally and in particular pursuant to Article 6 of Schedule 1 of the Human Rights Act 1998, to provide both parties to this application with a fair hearing and trial of the issues.  The Tribunal wishes to restate that it has borne this duty in mind throughout the hearing of these complaints. 

(ii)	The Tribunal is not satisfied that the Applicant is entitled to 12 week’s notice pay as claimed in his complaint dated 29 September 2000, and hereby dismisses that aspect of the claim.

(iii)	The Tribunal is unanimously of the view that the Applicant was unfairly dismissed – contrary to Article 126 of the Employment Rights (NI) Order 1996 [“the 1996 Order”] - on 14 September 2000, by way of constructive dismissal, pursuant to Article 127 (1)(c) of the 1996 Order.  In reaching this decision, the Tribunal is satisfied that the Applicant’s contract of employment was fundamentally breached by the Respondent in that;

(a)	The Applicant was overworked in 1998 – 1999, and despite the fact that he raised this matter as part of the Dialogue Procedure at that time, the Respondent took no effective step to alleviate the Applicant’s position;

(b)	Thereafter, although the Applicant continued to complain to Mr Houston about the level of work he was expected to do, and that he was working 45 hours per week, Mr Houston failed to provide any assistance.

(c)	When Mr Maguire left circa 20 March 1999, the Applicant was required to assume his duties on top of his own, which were already requiring him to spend 7.5 hours more at work than he was contracted for.  Moreover, Mr Maguire’s duties covered a vast geographical area. 

(d)	By late April 1999, the Applicant’s health was adversely affected by the Respondent’s unreasonableness and breach of contract, necessitating medication. This adverse affect included depression, sleep disruption and reclusiveness.  The Applicant also suffered domestic disruption in that he was compelled to sell his home, owing to his state of health, which was caused entirely by the Respondent’s conduct.

(e)	The Respondent could and should have remained in contact with the Applicant during his period of absence through illness.  The Tribunal was most unimpressed with the fact that he had no direct contact with the Respondent from 23 April 1999 to 2 March 2000.  The Tribunal considers that this lack of contact supports the Applicant’s contentions that the Company was severely overstretched in the management of its affairs at that time, which was conceded by Mr Button in evidence.  In reaching its decision that the Respondent constructively dismissed the Applicant, the Tribunal attaches weight to the evidence of Mr Button that “a lot of people fell through the system”.

(f)	Further to the above, the Tribunal considers it unreasonable of the Respondent to have stopped the Applicant’s pay on 1 June 2000 with the knowledge that this would put pressure on the Applicant.  This was an unfair and unreasonable action, whilst at the same time the Applicant had granted permission for the Respondent to contact his GP.

(g)	The Tribunal does not consider the offer, on 21 March 2000, of a transfer to the Dublin office to be a practical or fair proposal to put to a 55-year-old employee of thirty years standing.

(h)	The Tribunal was most unimpressed with the fact that Mr Button delayed in formally investigating the Applicant’s grievances until he received the letter of resignation from the Applicant, dated 7 August 2000. Moreover, the Tribunal determines that the fact that the Applicant was not interviewed as part of the investigation indicates that the investigation was neither reasonable nor prompt (W A Goold (Pearmark) Ltd v. McConnell [1995] IRLR 516 EAT) nor fair or even handed (BG PLC v. O’Brien [2001] IRLR 496), and as such is, of itself, a fundamental breach of the implied term to act promptly and fairly in exercising the contract of employment. This prompted the Applicant to affirm his resignation by not responding to the letter of 25 August 2000 from Mr Button. The Applicant’s effective date of termination was 14 September 2000, on which date he was constructively dismissed at the age of 54 years.

11.	On his Originating Application, the Applicant claimed compensation as his remedy. Pursuant to Articles 152 – 158 of the 1996 Order, the Tribunal now Orders the following compensation to the Applicant;

(A)	BASIC AWARD

	£240  x 13  x 1.5	=	£4,680.00
£240 x    7  x  1	=	£1,680.00
£6,360.00		=	£6,360.00

The Tribunal determines that there shall be no reduction in the amount at (A) above, pursuant to Article 156(2) of the 1996 Order.

(B)	COMPENSATORY AWARD

The Tribunal determines the following compensatory award, pursuant to Article 157(1) of the 1996 Order, which provides;

157.-(1)…	“the amount of compensation shall be such amount as the Tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer”.

Moreover, in making the determination below, the Tribunal determines that there shall be no reduction in the amount at (B) below, pursuant to Article 157(6) of the 1996 Order. In reaching this determination, the Tribunal has taken consideration of the fact that the Applicant was not consulted or interviewed in the course of the investigation into his grievance, despite the fact that Mr Button undertook to conduct a “full investigation” on 16 August 2000.

The Tribunal has also considered its duty under Polkey v. A E Dayton Services Ltd [1988] ICR 142, and now determines that the compensatory award it hereunder makes should not be reduced pursuant to the provisions of that precedent.

The Tribunal has considered carefully the House of Lords authority in the case of Johnson v. Unisys Ltd [2001] IRLR 279. The Tribunal considers this binding authority on it, and in particular the leading speech of Hoffman LJ, particularly that part of the dictum that provides (at p288: 55);

“I know that in the early days of the National Industrial Relations Court it was laid down that only financial loss could be compensated: see Norton Tool Co Ltd v. Tewson [1972] IRLR 86; Wellman Alloys Ltd v. Russell [1973] ICR 616. It was said that the word ‘loss’ can only mean financial loss. But I think that is too narrow a construction. The emphasis is upon the tribunal awarding such compensation as it thinks just and equitable. So I see no reason why in an appropriate case it should not include compensation for distress, humiliation, damage to reputation in the community or to family life”.

The Tribunal, applying this decision to the Applicant’s case, determines that his is such an appropriate case. In construing the measure of damages it should award, it has considered the submissions made in respect of the guiding principles laid down by the English Employment Appeal Tribunal in the case of ICTS (UK) Ltd v. Tchoula [2000] IRLR 643. Although that case concerned race discrimination, the EAT held that damages for injury to feelings fell within two bands; higher and lower. The EAT indicated that an Employment Tribunal may award a higher band of damages for injury to feelings of £22,000.00 plus £5,000.00 for aggravated damages, and that such a Tribunal would not err in law in making a separate award of aggravated damages, in addition to an award for injury to feelings. In the lower category, the EAT substituted an award of £7,500.00 for injury to feelings plus £2,500.00 for aggravated damages. 

The Tribunal considers the principles provided by the EAT in the ICTS (UK) Ltd v. Tchoula are applicable to the determination of just and equitable compensation under Johnson v. Unisys Ltd. Further to its finding at paragraph 8 above that the Applicant’s distress and ill health were further exacerbated by the Respondent’s treatment of him from 2 March 2000 to 7 August 2000, that his family life was disrupted and that he sold his house and moved in with his son during this traumatic period in his life, the Tribunal determines that it would be just and equitable to compensate the Applicant in this regard. The Tribunal determines that the Applicant’s case falls within the lower band of damages in ICTS (UK) Ltd v. Tchoula. Accordingly, the Tribunal awards to the Applicant £6,000.00 for distress, and damage to his family life. 

The Tribunal would therefore make the following compensatory award to the Applicant;

Immediate Loss

Loss of salary from 14 September 2000
to 11 December 2001 (£448.76 x 65 weeks)		=	£29, 169.40

Future Loss

Loss of salary from 15 September 2001 
for 36 weeks (£448.76 x 36)				=	£16,155.36

Loss of Statutory Rights				=	£     250.00

Compensation for distress and damage to family life=	£  6,000.00  

Total Compensatory Award				=        £51, 574.76

(C)   	TOTAL MONETARY AWARD  (A)  + (B) =       £57,934.76

(D)  	PRESCRIBED ELEMENT			=        £29,169.40

Period of Prescribed Element –
15 September 2000 – 11 December 2001

Amount by which the amount at (C) exceeds 
the amount at (D)					=       £28,765.36

12.	No further or other Order is made.

This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.

____________________________________

Date and place of hearing:  26 September 2001, 20 & 21 November 2001, 
6 & 11 December 2001, Belfast

Date decision recorded in register and issued to parties: 29 April 2002