Appeal No. EAT/304/92

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
	On 10 & 15 June 1993
	Judgment delivered on 26 April 1994

	Before

	HIS HONOUR JUDGE N HAGUE QC

	MR J H GALBRAITH CB

	MR P M SMITH

GREENAWAY HARRISON LTD	APPELLANTS

MRS J WILES	RESPONDENT

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR DAVID GRIFFITH-	  	 	       	      JONES
      (OF COUNSEL)
Messrs Lovell White Durrant
Solicitors
65 Holborn Viaduct
LONDON EC1A 2DY

For the Respondent	MISS L WARREN
      (OF COUNSEL)
Messrs Evan Butler Wade
Solicitors
165 Greenwich High Road
LONDON SE10 8JA

	JUDGE HAGUE QC:  This is an appeal by employers against the decision of an Industrial Tribunal sitting at London (South) and entered in the register on 2 March 1992.  By their decision, the Tribunal held that the employee, Mrs Wiles, had been constructively dismissed within section 55(2)(c) of the Employment Protection (Consolidation) Act 1978 and that the dismissal was unfair, and awarded her £8,744.85 compensation.  The employers appeal against each of these findings, and also raise an issue of "bias".  At the hearing before us, we heard completed argument only on the constructive dismissal and bias points, partly due to time constraints but also because success for the employers on either would make it unnecessary to consider the remaining issues.  This judgment, therefore, deals only with those points.

	Mrs Wiles was employed by the employers as a telephonist.  Under her terms of employment, set out in a letter to her from the company secretary, her hours of work were 8.00 a.m. to 4.00 p.m. or 10.00 a.m. to 6.00 p.m. in alternate weeks, although the letter did add that "there will be occasions when it will be necessary for you to work beyond your normal hours in

order to satisfactorily complete your duties and responsibilities".  As the employers were aware, the hours of work were important to Mrs Wiles for family reasons, two of her children being of school age; she had changed from her previous employment which required her to work until 9.00 p.m. in order to be at home in the evenings.  Another telephonist, Ms Knock, worked the alternate shift.  In addition, the employers required their telephone switchboard to be manned until 8.00 p.m., and a third telephonist, Ms Blain, worked from 6.00 p.m. to 8.00 p.m.

	On Friday 19 July 1991, Ms Blain was dismissed.  The employers decided not to replace her, and on the following Tuesday Mrs Wiles and Ms Knock were told by Mr Strange, the employers' premises manager, that they would have to work new shift patterns of 8.00 a.m. to 4.00 p.m. and 12.00 to 8.00 p.m. in alternate weeks, starting in two weeks time.  Both Mrs Wiles and Ms Knock said they could not work the late shift because of family commitments.  Mr Strange noted what they said and went back to discuss the matter with Mr Brandrith, the works manager.  Shortly thereafter, Mr Brandrith gave Mr Strange a memorandum which reads:

"Jackie Wiles has informed me that both herself and Chris Knock are refusing to work the new shift pattern.

I will ask you once again to explain the reason for this change, to both Jackie and Chris, if both are still adamant that they will not work these shifts warn both of them of the consequences of their actions, if they still refuse to comply to this request, I will give both girls one months notice of termination of employment."

Mr Strange showed this memorandum to Mrs Wiles and Ms Knock, but they both continued to refuse to work the late shift.  At Mr Strange's suggestion, Mrs Wiles then went to see Mr Brandrith.  He agreed not to implement the change for four weeks, but said that there was no other way of covering the evening shift.  He suggested to Mrs Wiles that she should think it over and discuss it with her husband, and that if she wanted to she could talk to the managing director, Mr Johnston.  However, it was Mr Johnston who had decided that Ms Blain would not be replaced and that the shift hours would have to be changed, and (as the Tribunal found) Mrs Wiles got the impression from Mr Strange and Mr Brandrith that it was unlikely that Mr Johnston would change his mind.  Mr Brandrith admitted that Mrs Wiles had asked him whether it would make any difference whether or not she spoke to Mr Johnston (who was not in the office that day) and that he had replied "I don't know, you know what he is like.  I don't know whether he will change his mind." Mrs Wiles thought about seeing Mr Johnston but decided against it because (she said in evidence) she knew he would not change his mind.  She then told Mr Strange that she was going to leave immediately, and did so.

	The Tribunal found that, in the circumstances, Mrs Wiles had been constructively dismissed under section 55(2)(c), which provides that an employee shall be treated as dismissed by his employer if:

"(c)the employee terminates [his contract of employment], with or without notice, in circumstances such that he is entitled to terminate it without notice by reason of the employer's conduct."

It is settled by Western Excavating (ECC) Ltd -v- Sharp [1978] Q.B.761 that, for this purpose, the employer must have committed a significant breach of the contract of employment amounting to a repudiation which the employee is entitled to accept.  The Tribunal found in the present case that "the Respondents had fundamentally broken the terms of the contract by the change of hours and it was not reasonable for the Applicant to continue working in those circumstances".  The Tribunal thus clearly directed themselves correctly in law as to the requirements of section 55(2)(c).

	Mr Griffith-Jones, Counsel for the employers, argued that, on the facts found by the Tribunal, there had been neither an actual nor an anticipatory breach of contract by the employers.  He said there had been no actual breach because the change in shift hours had not yet been implemented, i.e. that putting it at its highest, there could only have been an anticipatory breach.  Further, he said there had not in fact been an anticipatory breach, because there had been no final decision about the change in shift hours.  Mr Griffith-Jones argued that that was a matter for the final decision of Mr Johnston after the meeting with him which Mrs Wiles had been offered; that Mr Brandrith had in effect indicated that the declared intention to change the shift hours was subject to further consideration; that for there to be an anticipatory breach, the employers' decision not to adhere to the terms of the contract must be clear and final; and that there was no finding that there was no prospect at all of Mr Johnston changing his mind, or that the offer of a meeting with him was other than genuine.  Thus, he said, on the evidence a breach of contract was not inevitable and Mrs Wiles had jumped too soon.

	The distinction between an actual breach and an anticipatory breach is somewhat blurred in the case of a continuing contract of employment.  In Norwest Holt Group Administration Ltd v Harrison [1985] ICR 668, the employers indicated to an employee that some of the conditions of his employment would be changed as from a future date.  Cumming-Bruce LJ, after referring to dicta of Buckley LJ in Gunton v Richmond-upon-Thames LBC [1980] ICR 755 at pp 770-771, said at page 678E:

"Buckley LJ is there examining a situation which has some characteristics of a hybrid nature.  There has been some actual performance of the contractual obligations but other obligations remain executory.  If the employer threatens not to comply in the future with those executory obligations, the employee may at once at his election communicate his acceptance of the repudiation.  If he does so, the contract is at an end and he is entitled to sue for damages for breach.  But if he does not do so, then the situation, for essential purposes, has more in common with the situation which arises in what I will call pure anticipatory breach where all performance is still executory than with a case of immediate breach".

Those dicta make it clear that an employee does not have to wait until the "executory obligations" are not complied with, and the situation is akin to that where the whole contract is executory.  If the employee does not accept the repudiation, then, as Cumming-Bruce LJ put it at page 678G:

"...the contract continued to run and during the continued currency of the contract it was open to the company, in the absence of communicated acceptance, to change their stance and withdraw the threat of breach and to communicate with the terms of the contract".

	We agree with Mr Griffith-Jones that there was no actual breach of contract by the employers, and the situation was as set out in the above dicta.  But we do not accept Mr Griffith-Jones' argument that the facts found by the Tribunal do not support their conclusion that there had been an anticipatory breach.  We consider that the reality of the matter was that the decision to dismiss Mrs Wiles if she did not agree to change her hours had already been taken when she left and was a final one.  The offer of a meeting with Mr Johnston was not really an offer of further negotiation pending a final decision, but an offer of a meeting at which Mrs Wiles could try and get him to change his mind and reverse the decision he had previously made on behalf of the employers, ie "to change their stance and withdraw the threat of breach", to use the words of Cumming-Bruce LJ in the Norwest Holt case.  At all events, the view we have expressed is certainly a perfectly tenable view of the facts, and one which the Industrial Tribunal was entitled to take.  The questions of whether an employer is in breach of contract and if so whether the breach is a fundamental one are both questions of fact for the decision of the Tribunal, with which this Appeal Tribunal cannot interfere other than in very exceptional cases: see Woods v W M Car Services (Peterborough) Ltd [1982] IRLR 413 CA.  In our view there was no error of law in the Tribunal's decision in this respect.
	
	Mr Griffith-Jones also took a rather different point of some difficulty.  He submitted that, on a proper analysis of the facts, there had been no threat to vary the contract of employment at all.  What the employers did was to try to negotiate a new contract in substitution for the original one, and the only threat was to determine the original one.  But that threat, argued Mr Griffith-Jones, was to terminate by service of a notice of termination, which the employers were legally entitled to give (albeit that it might give rise to an unfair dismissal claim).  It did not involve or threaten any breach of contract, so that under the principle of the Western Excavating case there had been no anticipatory breach of contract at all.

	This is a far-reaching submission.  Most employment contracts provide for a relatively short notice of termination, so that if the submission is correct an employer who wishes to make a fundamental alteration to the contract can avoid the possible effect of section 55(2)(c) simply by making a threat of notice of termination.  It would also create an unfortunate anomaly.  If the employee leaves in the face of that threat, there would be no dismissal, whether creative or otherwise, and so no unfair dismissal claim.  But if he waits until notice of termination is given, there will be a dismissal (even if the employee gives notice and leaves before the expiry of the notice:  see section 55(3)), and so the employee can make an unfair dismissal claim.

	We cannot accept Mr Griffith-Jones's submission.  In our judgment, the submission involves stretching the principle of the Western Excavating case beyond its proper limits.  The Court of Appeal in that case, and the Courts and Tribunals in the cases where that principle has been applied, did not have in mind the possibility of a notice of termination which might itself give rise to an unfair dismissal claim, and we consider that it is necessarily implicit in the application of the principle that the contract of employment is assumed to continue.  If Mr Griffith-Jones's submission were correct, it would probably have provided a short (and often contrary) answer to many of the cases.

	The only case which Mr Griffith-Jones was able to cite in which a comparable submission had been advanced was Haseltine Lake & Co v Dowler [1981] ICR 222.  In that case, an employee was told by his employers that he should look for another job because they did not wish to retain him indefinitely and they would eventually have to dismiss him.   He was offered another job elsewhere, and the employers told him that if he did not accept it, he would not have to leave immediately but that he would eventually be required to go.  As a result, the employee gave notice and accepted the new job.  In addition to another issue, this Appeal Tribunal considered whether the employee (who appeared in person) might have been able to invoke section 55(2)(c).  The Appeal Tribunal decided he could not, because termination of a contract in accordance with its terms did not constitute a breach of contract, so that there had been no anticipatory breach by the employers.  In our judgment, the Haseltine Lake case is distinguishable and of no assistance because on any footing the employment contract was going to continue indefinitely and without alteration.  There was no question of varying or renegotiating its terms.

	We accordingly reject Mr Griffith-Jones' submissions on section 55(2)(c).  We consider that on the facts of this case it was open to the Tribunal to conclude that a threat to terminate Mrs Wiles's contract by giving a notice of termination was within the principle established by the Western Excavating case, i.e. it was a significant breach amounting to a repudiation which she was entitled to aacept.

	We turn to the question of the alleged "bias", which arises in this way.  At the time of the luncheon adjournment at the hearing before the Tribunal, the presentation of Mrs Wiles' case had been concluded and the lady Chairman expressed the hope that the parties would talk over the adjournment.  When the hearing resumed, the Chairman asked whether the parties had reached agreement and were told that they had not.  The hearing then continued and at its conclusion the parties withdrew while the Tribunal considered the matter.  When the parties reconvened, the Tribunal gave their findings.

	What is alleged on behalf of the employer to have happened is set out in paragraph 6 of the affidavit of Miss O'Farrell, a solicitor in the employ of the employers' solicitors, who attended the hearing.  That paragraph reads as follows:

"When the proceedings had finished I left the room where the hearing had taken place.  I followed the Chairwoman and the other members of the Tribunal down the corridor and overheard the Chairwoman saying to the other members words to the effect of "that will teach them not to settle when I tell them to".

Miss O'Farrell's Affidavit was dated 20 May 1993, well over a year after the alleged remark was made, and it appears that she did not make any contemporaneous file note or the like.  The employers' Notice of Appeal dated 19 May 1992 clearly raised the "bias" point, but unfortunately the requirements of the relevant Practice Direction, which provides for appropriate directions to be given, including the filing of Affidavits dealing with the basis of the complaint, appears to have been overlooked.  It was therefore not until late May or early June 1993 that the Chairman was asked to comment.  Mrs Wiles and her advisers were not asked to comment prior to the hearing before us.

	The Chairman provided her comments the Affidavit on 7 June 1993.  She said that she could not recall the conversation alleged and that it was highly unlikely that it happened.  She also stated that the other members of the Tribunal denied that such a conversation took place.  Those comments were included in our bundle, as also was a letter from one of the members confirming his denial and in addition pointing out that the practice of the Tribunal was to remain seated in the hearing room to allow the parties to disperse.

	Mr Griffith-Jones criticised the fact that the Chairman had asked the other members of the Tribunal for their comments and the production of the member's letter.  He based his criticism on some comments of Balcombe J, at the end of the unreported decision of J S Winny & Co Ltd -v- Beaumond (EAT/701/82).  In that case an allegation of bias against  the chairman had been made, but the nature of the allegation is unclear, although it appears to have related to the chairman's reluctance to allow the appellant to call a witness.  Balcombe J, after stating that the comments of the other members of the Tribunal and also the Clerk had to be obtained and put in the Appeal Tribunal's bundle, said this:

"We have deliberately excluded from our consideration the contents of those letters because it appears to us that if we were to seek to place reliance upon them, it would inevitably follow that, if what they say is not accepted, there must be some right on the part of the appellant to challenge them, and that could lead to the wholly undesirable practice of persons who sit in a judicial capacity being asked to justify - in an extreme case, possibly in the witness box - what they had done.  That would appear to us to be wholly undesirable.  Therefore, without questioning at this stage the propriety of what was done in relation to the Chairman's comments, we wish to say that we find it wholly undesirable that the members of a tribunal and the clerk or any other officer of a tribunal should be invited to comment where allegations of this nature are made."

We find difficulty in applying those dicta in a case such as the present.  If the other members of a tribunal are not to be permitted to comment about allegations in which they are directly involved, that would appear to be very unfair to both the chairman and to the respondent to an appeal.  We agree, of course, that it would be wholly undesirable for any members of the Tribunal to have to give evidence.  But where there is a serious conflict as to the material facts which are alleged to support a "bias" claim, that would appear to be unavoidable.  In our view, it would be wrong, and plainly unfair to the Respondent to this appeal, if the conflict could not be resolved and this Appeal Tribunal had to proceed on the basis of the contested allegations made by the Appellant being correct.

	Fortunately, however, we consider that it is unnecessary for us to resolve this dilemma in the present case, because even on the assumption that the Chairman did indeed make the remark alleged, in our judgment it is insufficient to justify the allegation of apparent bias.

	It is now clear from the decision of the House of Lords in  R -v- Gough [1993] A.C. 646, that the same test is applicable to cases of apparent bias, whether concerned with tribunals (including Industrial Tribunals), justices, jurors or arbitrators.  In the leading speech, Lord Goff of Chievely (with whom the other Law Lords agreed) stated the test as follows (at p.670E):

"........... I prefer to state the test in terms of real danger rather than real likelihood, to ensure that the court is thinking in terms of possibility rather than probability of bias.  Accordingly, having ascertained the relevant circumstances, the court should ask itself whether, having regard to those circumstances, there was a real danger of bias on the part of the relevant member of the tribunal in question, in the sense that he might unfairly regard (or have unfairly regarded) with favour, or disfavour the case of a party to the issue under consideration by him."

The test is an objective, as Lord Woolf emphasised at p.672G:

"It must be remembered that except in the rare case where actual bias is alleged, the court is not concerned to investigate whether or not bias has been established.  Whether it is a judge, a member of the jury, justices, or their clerks, who is alleged to be biased, the courts do not regard it as being desirable or useful to inquire into the individual's confidential nature of the judicial decision making process.  It is not useful because the courts have long recognised that bias operated in such an insidious manner that the person alleged to be biased may be quite unconscious as to it effect."

	Mr Griffith-Jones said that "the relevant circumstances" in the instant case included what he called the cursory and incomplete examination in the Tribunal's Reasons of the issues between the parties.  He said in particular that the Tribunal had failed to deal properly with the employers' reasons for dismissal and failed to make any express finding as to their reasonableness (a finding of constructive dismissal does not necessarily mean that the dismissal was unreasonable: see Stephenson & Co (Oxford) Ltd -v- Austin [1990] ICR 609).  He also said that the Tribunal had failed to give any reasons at all, beyond the calculation itself, for their quantification of the award of compensation.  These inadequacies in the Tribunal's Reasons, said Mr Griffith-Jones, fed the suspicion engendered by the Chairman's alleged remark that the employers' case had not been treated on its merits and that there had been a punitive element in the Tribunal's decision as a result of the employers' failure to settle the case.

	We do not accept Mr Griffith-Jones' arguments on this issue.  In the first place the Chairman's alleged remark could, albeit to a minor extent, apply also to Mrs Wiles (who was not awarded the maximum compensation, contrary to an assertion in Miss O'Farrell's Affidavit).  But more importantly, the remark must be considered having regard to its timing and context.  It was made (assuming it was made at all) after the parties had initially retired and the Tribunal had deliberated and then given their decision.  If there had really been any intention to penalise the employers for not settling the matter, that would have arisen and been mentioned during the Tribunal's deliberations and before the decision was given, and in that situation it is we think inconceivable that the Chairman would have made her alleged remark afterwards.  The facts of the timing and circumstances of the alleged remark in our view make it clear that it could have been no more than a casual comment about the result.  We consider that it cannot justify the previous finding of "real danger" of bias on the part of the Chairman.  That is an inference which, we think, simply cannot properly be drawn, and we do not consider that the alleged inadequacies of the Tribunal's Reasons can justifiably be prayed in aid to draw such an inference.  

	We also note that the Tribunal's decision was a unanimous one, and the alleged remark of one member cannot be relied on against the others.  However, we recognise that if bias were found against any one member, that would be sufficient to invalidate the decision.

	For these reasons, the employers' appeal on both the two points argued before us fails.  The appeal will have to be restored to deal with the remaining issues.