Appeal No.	EAT/1155/01

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 19 October 2001

Before
HER HONOUR JUDGE A WAKEFIELD
MRS A GALLICO
MR N D WILLIS

MR MICHAEL FAGAN	APPELLANT

ITNET PLC	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellant	MR OLIVER HYAMS
(of Counsel)
Instructed By:
Mr A Relton
Messrs Nash & Co
Solicitors
Beaumont House
Beaumont Park
Plymouth
Devon PL4 9BD	

JUDGE A WAKEFIELD:

1	This is an ex parte preliminary hearing of the appeal of Mr Michael Fagan against a decision of an Employment Tribunal sitting at Stratford by which his complaints of constructive unfair dismissal and breach of contract were dismissed.  

2	The brief background facts were that the Appellant had on 26 June 2000 resigned from his employment with the Respondent as a business manager.  He was at the time suspended from work during an investigation as to complaints against him of sexually harassing a female employee.  His resignation forestalled a proposed disciplinary interview which in consequence never took place.  The Appellant claimed that the conduct of the Respondent in the course of the disciplinary investigation breached the implied term of trust and confidence which must subsist between employer and employee and that he was therefore entitled to resign.  

3	In the Decision of the Employment Tribunal, promulgated on 16 August 2001 following a two-day hearing the previous month, each of the twelve specific complaints which had been made in the Originating Application by the Appellant relating to the Respondent’s conduct were dealt with in detail and each was found not to have been made out.  The overall conclusions are then contained in the latter part of paragraph 23 and in paragraph 24 of the Decision as follows:

“23  …The Tribunal finds as a matter of fact that the conduct of the investigation was scrupulously fair and did not breach the implied term of mutual trust and confidence between the Applicant and the Respondent.
24  The Respondent did not breach the Applicant’s contract of employment in any of the alleged respects.  Whereas the Applicant was entitled to resign, he was not entitled to do so as a result of any act or omission on the part of the Respondent.  His claims for unfair dismissal and breach of contract therefore fail.”

4	There are five grounds of appeal and we shall deal with each of them in turn.  The first ground (in paragraph 6 of the Notice of Appeal) is as follows:

“(1)	In paragraph 21(viii) of its extended reasons, the tribunal refused to apply [the principles in the case of] Boston Deep Sea Fishing and Ice Co v Ansell [1888] 39 ChD 339 so as to allow the Appellant to rely on conduct of the Respondent which he discovered after he had resigned, but which had occurred before he resigned, as part of the conduct of the Respondent which, it was the Appellant’s case, amounted to a breach of the implied contractual term of mutual trust and confidence and which accordingly entitled him to rely on section 95(1)(c) of the Employment Rights Act 1996.”

I quoted there from the grounds and they go on, after referring to the actual passage in the Tribunal Decision which is criticised:

“The principle in Boston Deep Sea Fishing and Ice Co v Ansell is of general application, and cannot properly be so limited ….”

What the Tribunal had said in the subparagraph which is criticised is this:

“The Tribunal rejects the argument that after-discovered conduct of the employer can justify the employee’s acceptance of the employer’s repudiation of the contract of employment.  [The Boston Deep Sea case] applies to after-discovered conduct of the employee by the employer and does not apply to the facts of this case.”

5	Looking at the Decision itself, prior to the paragraph in its Reasons which is criticised, the Employment Tribunal had said this, at paragraph 6:

“… it is part of the Applicant’s case that treatment of his reference for Simon Gray and alleged information about whether or not the Applicant worked for the Respondent on 21 June 2000 was one of series of cumulative events which led to his resignation.”

Then, in paragraph 21, in the same subparagraph (viii) but prior to the part which is quoted in the Notice of Appeal the Tribunal had said this:

“ … the Tribunal is unable to draw any inference that there was any act or omission on the part of the Respondent which amounts to a breach of contract in respect of events arising out of the mortgage application.  The Tribunal find as a matter of fact that the Applicant failed to follow the Respondent’s procedures with respect to providing a mortgage reference.  There is no evidence that the subsequent HR involvement with the mortgage played any part in the Applicant’s decision to resign on 26 June 2000.”

6	It is clear to us that the Employment Tribunal found, as a fact, that the Appellant’s assertion of reliance on this incident as one of the reasons leading to his resignation was untrue and that the incident itself did not amount to a breach of contract.  

7	Before us today it is argued that the impact of the incident was that it showed predetermination by the Respondent of the outcome of the investigatory process.  We do not agree and we are satisfied, from the overall findings of the Employment Tribunal, that they too were not satisfied as to that and we consider they were justified in that finding.  It was therefore factually irrelevant to the decision whether or not the Employment Tribunal were right in saying that after discovered conduct of the employer cannot justify the employee’s acceptance of the employer’s repudiation.  In any event, we think that this statement, although unnecessary to the finding in the case, was correct.  Acceptance of a breach of an implied term of trust and confidence by resigning postulates in our view a subjective state of mind in the employee at the relevant time, a knowledge that the employer has behaved in such a way that it is intolerable to continue working for him.  This situation cannot, in our view, arise where the employee is ignorant of the conduct in question.

8	Nothing we have been referred to in the case of Boston Deep Sea Fishing, already cited, nor the article in the extract from Chitty on Contracts, nor the case of Denmark Productions Ltd v Boscobel Productions Ltd [1969] 1 QB 699, leads us to any contrary conclusion.  Ground 1 of the appeal therefore, in our view has no merit.

9	Ground 2 of the appeal involves criticising the Employment Tribunal as failing to take account of other evidence said to have been put before them and tending to show that the Respondent had predetermined the outcome of the disciplinary proceedings.  Because of the Appellant’s resignation the disciplinary hearing, as I have said, never took place.  As to the disciplinary investigation, the Employment Tribunal found it to have been scrupulously fair.  They had set out at length the undisputed facts, the parties respective submissions, their findings of fact and the conclusions.  Ground (2) of the Notice of Appeal says this:

“2.  The conduct of the Respondent which the Appellant alleged before the tribunal was repudiatory or in fundamental breach of his contract of employment, included predetermination of the disciplinary proceedings which the Respondent had initiated against him.  A central part of the Appellant’s case in that regard was the evidence of Mr Dennis Bailey, who said when being re-examined:
‘Vanessa said in the bar:  ‘They want Mike out together with his clique’.”

The Employment Tribunal took account of the evidence of Mr Bailey as they referred to it in their Decision.  A clear overall conclusion of fairness was reached.

10	An Employment Tribunal need not and cannot deal specifically with each piece of evidence which has been given over a lengthy hearing, in this case over two days, especially perhaps where a witness is merely repeating a remark said to have been made by someone else in a bar.  We are quite satisfied that Ground 2 has no merit.

11	Ground 3 of the grounds of appeal relates to a similar criticism of the Tribunal’s findings.  It says:

“In paragraph 21(viii) of its extended reasons, the tribunal referred to the question of the mortgage application of Mr Simon Gray, whom the Appellant managed, and both described and considered the allegation of the Appellant in that regard as an allegation that ‘an agent from Allied Dunbar was told by the Respondent’s Human Resources Department that the Applicant was no longer employed by the Respondent’.  The tribunal then failed to refer to the evidence of Amy Whitting that Stuart Lanning of Mortgage Express, had told her that he had telephoned a person in the department in which the Appellant worked who had told him that the Appellant no longer worked for the Respondent.  This evidence was significant in relation to the claim of predetermination which was a central part of the Appellant’s case.”

It is said that the Tribunal therefore failed to have regard to a relevant factor, or failed to give proper reasons for its decision.  In its Decision at paragraph 6 the Tribunal said this:

“Stuart McCallum dealt with a reference for a mortgage for Simon Gray.  The relevant part of his evidence was that on 21 June 2000, someone at Mortgage Express told him that Mr Fagan no longer worked at ITNet but he was subsequently told that Mr Fagan did work there.”

Then, at paragraph 21(viii) they had said this:

“The Tribunal accepts Amy Whitting’s version of events.  The Applicant was involved in the provision of a reference for a mortgage which is usually the remit of the HR Department.  She corrected the information about his absence and dealt with the provision of the reference.”

12	Clearly in our view the Tribunal accepted that wrong information had initially been given and was corrected.  This did not amount to predetermination in their view, nor to any failure of the disciplinary process.  This ground also has no merit.

13	Ground 4 of the grounds of appeal are that in paragraph 21(vi) of the Reasons, the Tribunal had said:

“Vanessa Hall took no part in the investigation”.

It said that that finding was perverse since the Respondent’s own notes of the investigation had indicated that Vanessa Hall had, on 25 May, met with the complainant in relation to the sexual harassment matter and had discussed it.  That was the day, as the Employment Tribunal found, that the Appellant had been suspended from work.  The investigatory process commenced subsequently on 6 June and that is quite clearly referred to in paragraph 3, page 6 of our bundle where it says, under the heading “Subsequent Events”:

“The Respondent set up an independent enquiry panel to investigate the allegations under the auspices of the Industrial Society and informed the Applicant of the plan for the investigation by a letter dated 6 June 2000.  The enquiry was carried out by Angela Ishmael of the Dignity at Work Unit of the Industrial Society assisted by two persons employed by the Respondent but with no knowledge of the Applicant.”

It then goes on to deal with what happened thereafter.

14	Therefore, the criticism of the finding as to the involvement or otherwise of Vanessa Hall is entirely misunderstanding the nature of the Tribunal’s findings.  This ground also has no merit whatever.

15	Finally, we deal with Grounds 5 and 6.  Ground 5, again on the basis that it shows predetermination, criticises the failure of the Tribunal to find that in consequence of the Respondent seeking to reorganise its workforce to cover the absence of the Appellant from the work place it had been demonstrated that the Respondent had decided, in advance of any disciplinary hearing, that the Appellant was not going to return.

16	We consider these grounds to have no merit whatsoever.  The Tribunal had said on this matter:

“The Tribunal finds that it was a prudent business decision to secure a management team to continue with the operation of the Applicant’s department during his suspension.  In any event, it was necessitated by the Applicant’s declaration that he would go back to the LBH contract under no circumstances.  Insofar as permanent change is concerned, he agreed under cross-examination that alternative arrangements had to be made in his absence.  The Applicant’s conduct in stating he would not return to the LBH obliged the Respondent to make the changes it did during his absence.  As the Applicant did not take part in the planned disciplinary procedure, it is not possible to conjecture whether the change in management would be permanent.”

We therefore cannot see any merit whatever in the criticism of the Tribunal’s findings on that matter.  Ground 6 merely says that finding is perverse.  Again, there is no merit in that.

17	This appeal cannot succeed and is dismissed.