Appeal No. EAT/129/90

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 13 May 1992
	Judgment delivered on 22 December 1992

	Before

	HIS HONOUR JUDGE HAGUE QC

	MR D G DAVIES

	MR R H PHIPPS

BPCC PURNELL LTD	APPELLANTS

MR N WEBB	RESPONDENT

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellants	Mr Nigel Giffin
(of Counsel)
Messrs Roger Brooker & Co
4A Tindal Square
Chelmsford
Essex
CM1 1EU

For the Respondent	IN PERSON

	HIS HONOUR JUDGE N HAGUE QC:     This is an appeal by employers, BPCC Ltd ("the Company") from the decision of an Industrial Tribunal sitting at Bootle entered in the Register on 9th January 1009.  The Tribunal considered that the Applicant, Mr Webb, had been constructively dismissed by the Company and that his dismissal was an unfair dismissal.

	The facts are set out in detail and with lucidity in the Full Reasons of the Tribunal.  It is only necessary for us to give a brief summary of them.   The Company is a printing company, which at the beginning of 1989 carried out two kinds of printing, web offset or lithographic printing, and gravure or cylinder printing.  Mr Webb had been employed by the Company for over 20 years, and for the previous 4 years had been a platemaker in the pre-press department of the web offset section.  This was skilled but not heavy work.  The platemakers worked a triple shift, working in consecutive weeks 6 a.m. to 2 p.m., 2 p.m. to 10 p.m. and 10 p.m. to 6 a.m.  The night shifts attracted shift premiums.  As a result Mr Webb's earnings varied according to which shift he was on, but his average gross earnings were £305 per week.

	On 2nd May 1989, the Company informed Mr Webb's union, the NGA, of "the decision that had been reached by the Company to reluctantly close the web department and that production would cease in the next 3 to 4 weeks".  In fact, it was indicated that production would cease following the late shift on 22nd May, which was 3 weeks thereafter.  The Company however stated that there would be no redundancies, as all employees would be redeployed.

	Mr Webb and the other platemakers were unhappy about the closure, and also because they were kept in a state of uncertainty as to what their new jobs would be until 16th May, only a week before the changeover.  Mr Webb was then informed that he would be transferred to the GPD (grinding, polishing and de-chroming) section of the pre-press department of the gravure section.  This involved him being paid at different hourly rates, subject to "buffer" provisions during the first 6 months after the redeployment; these buffer provisions accorded with clause 6 of the "Blue Book" Redundancy Procedure Agreement between the Company and the NGA.  It was, however, made clear that there would be no buffer in respect of shift earnings.  As the pre-press department of the gravure section worked only a two-shift system, this meant that Mr Webb, like the other platemakers, would lose their shift premium for a second night shift.  It was hoped to introduce a three-shift system, and the management opened talks with the NGA Chapel for that purpose; but the existing members of the GPD section were unhappy at the idea and it was likely to be some time before the three-shift system could be introduced.  In the meantime, Mr Webb would suffer a loss of about £30 per week.

	Mr Webb took a holiday from 22nd to 30th May 1989, with the agreement of the management.  On his return on 31st May, he received a letter dated 30th May stating that in view of the difficulties in changing the shift system, it had been decided that from 12th June until further notice he would work day hours (8.30 a.m. - 4.30 p.m.) only.  This would have resulted in a reduction of about £80 per week in Mr Webb's gross earnings.  During his holiday Mr Webb had replied to an advertisement for another job, and had had an interview for it.  He received an offer of the new job on 2nd June, and decided to accept it.  He wrote to his manager at the Company stating that he was not prepared to take the wage cut forced on him by the management's decision to offer him day work only, and giving 2 weeks' notice of leaving.  He started to work out his notice, but left by agreement on 9th June.

	Mr Webb claimed that he had been constructively dismissed.  In paragraph 15 of their Reasons, the Industrial Tribunal said:
	"... We have to decide whether the respondents' actions amounted to breaches of contract and, if so, whether they amount to fundamental breaches of contract and, if so, whether the applicant left as a result of any such breaches. ..." 

Those tests were in accordance with Western Excavating (EEC) Ltd v. Sharp [1978] Q.B. 761 and were accepted by Mr Giffin, Counsel for the Company, as being correct.  Mr Giffin also accepted that he could not challenge the finding of fact by the Tribunal (in paragraph 21 of their Reasons) that Mr Webb left by reason of the Company's alleged breaches of contract and not because he had found another job.  

	Mr Webb had no written contract, and there were no statutorily required written particulars.  The Tribunal however found that the relevant terms of a "Return to Work Agreement" made in 1986 were incorporated in his contract.  That Agreement was a collective agreement made between the Company and the NGA following a strike.  Mr Webb told us that he had never in fact seen it, but he knew about it, and had returned to work following the strike in the knowledge that the Agreement had been made.  He accepted before us that its provisions applied to him, and did not challenge the Tribunal's finding to that effect.

	Clause 2.11 of the Return to Work Agreement provides as follows:-

	"Subject only to the Company providing the necessary training there will be total flexibility between all pre-press departments and between NGA Chapels covering specified NGA occupations."

The Tribunal held that this clause entitled the Company to transfer Mr Webb to a different department involving different work subject to an implied term that a person would not be transferred to a place where his health made it impossible to continue work.  The Tribunal further held that there was no hard evidence that Mr Webb was unfit to work in the GPD section, and so the Company was entitled to transfer him there.

	The Tribunal did, however, consider that Clause 2.11 was subject to certain limitations on its exercise.  They said this:

	"... However the flexibility clause in our view does not entitle the respondents to change an employee's hours substantially or to reduce his pay.  The collective agreement contained an express agreement on hours.  It does not refer expressly to an agreement on pay but it cannot have been intended by those who entered into that agreement that this general flexibility clause entitled the employers unilaterally to change an employee's hours or pay."

	On that basis, the Tribunal held that both by their first decision of which Mr Webb was informed on 16th May 1989, involving a change to a two-shift system with a consequential indefinite loss of pay of £30 per week, and also by the subsequent decision conveyed by the letter dated 30th May 1989 involving Mr Webb working day hours only with a consequential indefinite loss of pay of £80 per week, the Company had been in breach of contract.

	We are unable to accept the Tribunal's reasoning in this respect, for in our view it is not possible to infer the limitations suggested by the Tribunal.  These would severely restrict the utility of the flexibility clause, and we consider that it must have been contemplated that, within reason, the management was entitled to transfer an employee to a department with a different shift pattern even if that resulted in a diminution in earnings as a result of the loss of shift premium.  In our view, the limitations suggested by the Tribunal are akin to, and indeed go beyond, an implied term that a clause of this kind must be exercised reasonably; and no such term can be implied: see Rank Xerox Ltd v. Churchill [1988] IRLR 280 and White v. Reflecting Roadstuds Ltd [1991] ICR 733.

	It is, however, settled that whatever the width of an employer's powers under a literal interpretation of an employment contract, there is an implied 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: see Woods v. WM Car Services (Peterborough) Ltd ICR 666 at p.670; Imperial Group Pensions Ltd v. Imperial Tobacco  [1991] 2 AER 597 at p.606 ; and cf United Bank Ltd v. Akhtar [1989] IRLR 507 at p.512.  We doubt if the first decision of the 16th May 1989, standing on its own, would have constituted a breach of this implied term.  But the Industrial Members of this Appeal Tribunal, with whom the Chairman agrees, consider that a reduction of £80 in an average weekly wage of £305 is unacceptable, and so that the combined effect of the two decisions of 16th May and 30th May 1989 involved a clear breach of the implied term.

	We further consider that this breach was a fundamental breach of Mr Webb's contract of employment.  We agree with the Tribunal that the fact that it was an anticipatory breach, and the fact that after Mr Webb had left the Company changed its mind about putting into effect the decision set out in the letter of 30th May 1989, are both immaterial.

	Accordingly, although our reasoning differs from that of the Tribunal, we agree with the Tribunal that Mr Webb was constructively dismissed, so that the case falls within S.55(2)(c), Employment Protection (Consolidation) Act 1978.

	Mr Giffin also submitted that there was undisputed evidence before the Tribunal of an established custom and practice which enabled the Company to transfer Mr Webb to the GPD section and alter his shift pattern in the way it did.  He said that Mr Bramley, the Company's managing director, gave evidence of a national agreement between the NGA and the British Printing Industries Federation (of which the Company had formerly been a member), which established that custom.  What the Tribunal said about this, in paragraph 17 of their Reasons, was this:

	"There was some reference during the course of Mr Bramley's evidence to a national agreement between the NGA and BPIF.  That document was not produced to us and it was not referred to in any documents or pleadings or at all apart from in passing by Mr Bramley.  The respondents' representative was given an opportunity to apply for an adjournment to produce this agreement, but declined the offer.  We cannot be satisfied that, whatever the terms of that national agreement may be, it was incorporated into the applicant's contract.  There is no evidence that he was ever informed of it.  There was no evidence that it was used in the company and therefore we feel we cannot make that implication." 

	Mr Giffin submitted that this was insufficient, that the moment for requesting the production of the agreement was when Mr Bramley was giving evidence (and not in the course of the Company's representative's closing submissions), and that the Tribunal had no power or discretion to exclude consideration of the agreement.  We do not agree.  Particularly in view of the unsatisfactory way in which secondary evidence of the national agreement was introduced, we consider that the Tribunal was clearly entitled to wait and see whether in fact the Company intended to rely on it before taking the point.  In our view, the course taken by the Tribunal in this respect was entirely reasonable and fair.

	Having found that there had been a constructive dismissal, the Tribunal went on to consider whether the Company had acted reasonably under S.57(3) of the 1978 Act, and concluded that it had not, because - (1)  there had been no consultation with Mr Webb personally or with the NGA about the job allocation, (2)  there was very little notice of the closure, and (3)  there was very little notice of the reduction of hours due to take place on 12th June 1989.  Mr Giffin submitted that this conclusion was erroneous in law and one which no reasonable tribunal could reach.  We do not agree.  The question was essentially one of fact for the Tribunal, and in our view it was clearly not perverse and so cannot properly be challenged on appeal.

	Accordingly the appeal is dismissed.