Appeal No.	 EAT/1251/95

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 27 November 1996

Before
HIS HONOUR JUDGE D M LEVY QC
MRS R A VICKERS
MR N D WILLIS

HERBERT READ LTD	APPELLANTS

MR H M HARRISON	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR N MOORE
(Solicitor)
Messrs Stephens & Scown
Solicitors
26-28 Southernhay East
Exeter
Devon EX1 1RS
	
For the Respondent	MISS R DOWNING
(of Counsel)
Messrs Radcliffe Crossman Black
Solicitors
5 Great College Street
London SW1P 3SJ	

	JUDGE D M LEVY QC:	Herbert Read Ltd (“the Company”) employed Hugh Michael James Harrison, (“Mr Harrison”) the Respondent to this appeal, for a period in unusual circumstances.  The employment came to an end.  The unusual circumstances were that at one time Mr Harrison owned the Company.  Subsequently, the Company acquired new owners; the new owners and Mr Harrison fell out.  As a result of the falling out, Mr Harrison’s employment was determined.  He claimed it was an unfair and wrongful dismissal and made an application to an Industrial Tribunal, received on 13 April, 1995.

	There was a hearing before an Industrial Tribunal on 5, 6, 7 September and on 12 and 13 October at Exeter.  The decision of the Tribunal was communicated to the parties on 19 October 1995.  The unanimous decision of the Tribunal was that Mr Harrison’s complaint that he was unfairly dismissed was not well-founded, but that he succeeded on the ground that the dismissal was wrongful.

	Thus, the Tribunal came to the conclusion that, in the events which they found to have occurred, it was inevitable for Mr Harrison and the Company to part ways, but that the conduct of Mr Harrison, of which complaint was made, could not be categorised as analogous to gross misconduct.

	Thus, the Company were not entitled to consider that Mr Harrison was in fundamental breach of conduct which entitled them to bring it summarily to an end.

	Mr Moore appeared for the Company below and appears for it on this appeal.  He submits 

that the Tribunal was wrong on the facts which it had found so to conclude.  He accepts that there is Court of Appeal authority to the effect that amounts to a repudiatory breach is a question of fact in any case.  The authority is Wilson v Racher [1974] ICR 428.

	Mr Moore provided a chronology of material events considered by the Industrial Tribunal.  In February 1993 there was a memorandum confirming the outcome of a meeting on 25 January 1993 when Mr Harrison was told that if he did not improve he and the Company would have to go separate ways.  On 17 February 1993 there was a meeting of Directors.  On 10 December 1993 there was a disciplinary hearing regarding the use of the Company’s draughtsmen to make a foot stool for Mr Harrison’s sister-in-law.  On 20 December 1993 there was a written warning that any further instances of misconduct would be treated very seriously and would be likely to lead to the Respondent’s dismissal.  On 17 August 1994 the Respondent was told at a meeting that his employment could not continue if he did not get in new orders.  On 21 September 1994 there was a written warning that the Appellants would not be able to continue to employ Mr Harrison if he did not achieve the objectives set out in that letter and on 16 January 1995 there was a disciplinary hearing which ended with the termination of Mr Harrison’s employment.

	Mr Moore submitted that all this conduct meant that the Company and Mr Harrison had to part ways and all the events looked at in the round meant that the Company was entitled to say that there had been a fundamental breach of the contract by Mr Harrison looking at his conduct at a whole.  He pointed us to certain paragraphs of the Industrial Tribunal’s decision and said that their conclusion, having regard to these paragraphs that there was not a fundamental breach was perverse.  The passages to which he took us to appear in paragraphs 10, 12 and 14 of the Extended Reasons.  Passages from paragraph 10 read:

“10  ...  From our reading the various notes and letters that passed between the two we would certainly not condone the overbearing and at times pedantic attitude adopted by Mr Stanley [he became the major shareholder of the Company] towards the applicant.  At the same time, and whatever may have been his expectation, the applicant was quite clearly an employee and the attitude which he was displaying towards his employer as expressed in the notes which he sent to Mr Stanley or recorded privately was, in our view totally unacceptable.  ...  In our judgment, his refusal to acknowledge that relationship and the contractual duties placed upon him was the primary cause (our emphasis) of the breakdown in his relationship with the respondent’s directors.  ...  That attitude, in our judgment, clearly coloured his dealings with Mr and Mrs Stanley and ultimately rendered any continuing working relationship with them impossible.”

	The last sentence of paragraph 12 of the Extended Reasons reads:

“12  ...  What he was clearly not prepared to do was to respond to the express instructions of Mr Stanley to adopt different working methods and, in our view, and as an employee, that he was obliged to do whether he agreed with those methods or not.”

	In paragraph 14 there is this passage:

“14  Taking all these matters into account, we accept the respondent’s contention that the reason for the applicant’s dismissal was the fact that the trust and confidence which must necessarily exist between him and the respondent as employee and employer had been irretrievably ruptured as a consequence of the manner of his dealings with the directors and his failure to improve his performance after warnings.  ...”

	Finally, in the face of all that, says Mr Moore, the sentence in paragraph 16 does not follow.  This reads:

“16  We agree with the applicant that there must be a gross and wilful act on the part of an employee to warrant summary dismissal.  In our view, that requires us to view the applicant’s attitude and conduct as analogous to gross misconduct and that is a view that we are unable to take.  ...”

	Mr Moore submitted that the submission which he had made to the Tribunal had been misunderstood.  His submission was that when you come to the last straw you are entitled to look at the whole history of the dealings between employer and employee to see whether there has been a fundamental breach of contract.

	We are satisfied that, although they expressed it slightly differently, that is exactly the exercise which the Industrial Tribunal undertook.  It had heard oral evidence from witnesses over a number of days; it had weighed up the evidence carefully to consider whether the conduct of Mr Harrison amounted to a fundamental breach of the contract.  It concluded that there had not been a fundamental breach of the contract, looking at the conduct as a whole.  What it found was that the trust and confidence necessary between a director of the Company and the Company had broken down and the contract had to come to an end.  They refused to find a fundamental breach of contract by Mr Harrison in the circumstances of the case.

	Mr Moore submitted to us that, given the history as found by the Industrial Tribunal, if there had been a claim of constructive dismissal, the employee would have succeeded.  We do not accept this submission.  In any event, what the Industrial Tribunal had to do was to decide whether, on the whole history of this case, there had been such a fundamental breach of the contract by Mr Harrison that the Company was entitled summarily to dismiss him.  It came to conclusions of fact and law, that there had not been a fundamental breach.

	On the facts as found we do not consider the conclusion of the Industrial Tribunal perverse.  It was a conclusion it was entitled to reach on the evidence.  It may be that we would have reached a different decision, but unless we considered the decision below to be perverse, we would not be entitled to substitute our views for that of the Industrial Tribunal.  In our view, the decision of the Industrial Tribunal was one which they could properly reach.

	In these circumstances, whilst we thank Mr Moore for the clear submissions which he has made to us, we dismiss this appeal.