Appeal No. EAT/0452/01

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 23 September 2002
Judgment delivered on 12 November 2002

Before
MR RECORDER LANGSTAFF QC
MRS M T PROSSER
MISS S M WILSON CBE

MR ARIMORO	APPELLANT

(1) ISS LONDON LTD (2) MS M COX-MITCHELL	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR A FALUYI
(Solicitor)
Messrs Albert & Co
Solicitors
3rd Floor
Imperial House
64 Willoughby Lane
Tottenham
London
N17 OSP

For the Respondent	MR D S BANSAL
(Solicitor)
Instructed by:
Croner Consulting Ltd
Litigation Department
Croner House
Wheatfield Way
Hinckley
Leicestershire
LE10 1YG	

MR RECORDER LANGSTAFF QC

1.	This appeal from a decision of the Employment Tribunal sitting at London South, promulgated on 10th January 2001 raises no new principle of law.  At the appeal hearing, the parties were quickly able to agree through Counsel that the appeal should be allowed, and also that the consequence should be that the matter should be remitted to a fresh Tribunal for rehearing.  The decision has been reserved purely because of the hour at which argument ended.
The Facts
2.	The Appellant’s case was heard at the same time as that of a Ms. Cox-Mitchell against the same Respondent.  The Tribunal found that both the Appellant and Ms Cox-Mitchell had been cleaning staff employed in an undertaking which was transferred with effect from 1st November 1999 to the Respondent.  
3.	Until the transfer Ms Cox-Mitchell was a senior supervisor, with responsibility for supervising the cleaning of five offices.  She was (a) demoted without any prior warning or consultation to become a cleaner; and (b) shortly after, ordered to remove jewellery she was wearing, although she had worn similar jewellery throughout her service.  When she protested, she was disciplined and warned.
4.	The Tribunal found that there had been neither a fair nor proper investigation at the time of the disciplinary hearing.
5.	The Tribunal understandably found that those circumstances were such that Ms Cox-Mitchell was entitled to resign, and that her resignation therefore constituted a dismissal within the meaning of Section 95(1)(c) of the Employment Rights Act 1996.
Mr Arimoro
6.	Although Ms Cox-Mitchell succeeded in her claim, the Appellant did not.  He claims in his appeal that his position was materially the same as that of Ms Cox-Mitchell, and that therefore the Tribunal should have come to the same conclusion.  It is because of that claim that it has been necessary to set out the material features of her case.  The two claims are, of course, separate claims even though they were heard together.  
7.	The Appellant was a temporary supervisor, with responsibility for the cleaning of one office building.  Without any prior warning or consultation, he was told by the new management after the transfer that his temporary supervisory role would cease and he would resume as a cleaner.  
8.	He received a written statement of his duties as a cleaner, for which he signed.  
9.	Some two months later, he received a written warning following a suspension which in turn had followed an informal meeting to discuss an allegation made against him that he had been abusive to a work colleague.
10.	The central reasoning of the Tribunal is contained in three paragraphs, beginning at paragraph 27.  They read:
“…Mr Arimoro resigned citing that the disciplinary hearing had created “a breakdown of the necessary trust and confidence” between himself and the Respondent, and the earlier demotion had been a fundamental breach of contract.  
28.	The Tribunal concludes on these facts that this Applicant’s reaction has been entirely understandable in the circumstances.  The demotion came without warning or consultation, and he felt misused by the new management.  The pressures then exerted on him by the new management, even if in the circumstances to be expected, added to his concerns and unhappiness.  The January events, with the inadequate handling on the part of the investigation and with the result of a warning for the first time after such a long period of service all amounted to a deterioration in his enjoyment of and commitment to his job.  In our view these failings did constitute breaches by the Respondent, and in that respect we make such a finding that this Applicant’s claim is well founded.
29.	In relation to whether or not there was a dismissal, the law requires the Tribunal in application of Section 95(1)(c) of the Act to look to whether or not any breach was of a fundamental nature.  Although we have had concerns on balance, we conclude that the situation of breach in Mr Arimoro’s case did not go sufficiently to the heart of the contract to render it to be of a fundamental nature.”

Accordingly, the Tribunal found that there was no dismissal.  Therefore it dismissed his complaint of unfair dismissal.
11.	There were a number of differences between the position of the Appellant and that of Ms Cox-Mitchell.  Though she had been appointed to the permanent post of supervisor (and indeed had wider responsibility than he did), his post was temporary.  A temporary post inevitably envisages the possibility that without breach of contract an employee may be required to return to the regular post, from which he was acting up.  Accordingly, in his case it was the manner in which the demotion was effected, rather than the fact of the demotion, that was capable of constituting a breach of contract: whereas in her case it was both.  
12.	Next, in his case (but not, we were told, in hers) he received a written statement of his new responsibilities.  The Tribunal recorded that he signed for it, but that it was in conflict whether he did so in order to indicate that he had received the document, or whether he did so intending to indicate that he accepted the contents.  The difference might be critical in assessing whether or not the “new responsibilities” amounted to a change in his responsibilities at work, imposed upon him in breach of contract.  If, indeed, new responsibilities were imposed (rather than the old responsibilities restored), then if he agreed to accept those new responsibilities (even if he did so regretfully) he would forfeit his right to treat the change in job responsibility as being repudiatory conduct.  He would, in common law parlance, have affirmed the contract.  If, however, his signature were merely intended to acknowledge receipt it would be no evidence of affirmation at all.
13.	Unfortunately, the Tribunal did not say how the conflict was to be resolved.  Although the indication is, perhaps, that it accepted that he was signing only to indicate receipt -  because the Tribunal immediately record that the Appellant orally registered his unwillingness “… to give the proposal a 3 month trial …” - it does not say whether that was prior to the receipt of the written statement, or whether it succeeded it.  In short, the decision is opaque in this area.  
14.	Next, although both Ms Cox-Mitchell and the Appellant were subject to discipline at about the same time, and both were formally warned, the Tribunal appear to have thought that the substance of the complaint in respect of Ms Cox-Mitchell was unwarranted, as well as the procedure being flawed, whereas in the case of the Appellant no comment is made about the substance of the disciplinary complaint against him, merely the process.  As paragraph 28 demonstrates, the Tribunal criticised the Respondent for “inadequate handling” of the investigation, and may have taken the view (though it is not clear) that warning was unjustified as a penalty.
15.	Accordingly, we do not feel able to conclude that there is such a difference of approach to the two applicants before the Tribunal as to demonstrate that the reasoning is necessarily inconsistent.
The Decision
16.	However, we have come to the view that the appeal should succeed because the decision does not adequately indicate the process of reasoning upon which it was based.  
17.	The Tribunal did not clearly indicate the nature of the breach which it unreported to identify in paragraph 28.  It is unclear whether the breach was a breach of contract relating to the manner in which, or the occasion on which, the disciplinary process should be operated, or, alternatively, whether the breach was a breach of the implied term of trust and confidence.  If the former, the breach might be procedural only, and thus not be sufficiently serious to be repudiatory and to justify the Appellant in resigning.  If, however, it was a breach of the implied term of trust and confidence, then it is difficult to see why such a breach should not be repudiatory.
18.	As to the latter point, in the case of Morrow v. Safeway Stores Plc [2002] IRLR 9 this Tribunal, under the Chairmanship of Ms Recorder Cox QC carefully examined whether a Tribunal was entitled to regard a breach of the implied term to maintain trust and confidence as not being sufficiently serious to amount to repudiatory conduct.  It found that such a breach had to be repudiatory.  The reasoning, at paragraph 23, proceeds from the very definition of the contractual term.  The question is whether, objectively speaking, the employer has conducted itself in a manner likely to destroy or seriously damage the relationship of confidence and trust between the employer and employee.  If an employer is found to have been guilty of such conduct, that is something which goes to the root of the contract and amounts to a repudiatory breach, entitling the employee to resign and claim constructive dismissal.  Accordingly, Mr Bansal, for the Respondent, accepted that if what the Tribunal had in mind were breaches of the implied term of trust and confidence, those breaches would be repudiatory.  However, for his part, Mr Faluyi accepted that it was unclear precisely what breach the Tribunal had in mind.
19.	In addition, there is no finding of fact as to why it was that the Appellant actually resigned.  The decision records what he said at the time (paragraph 27), and that his “reaction” was “entirely understandable” (paragraph 28), but does not make it clear what the reason was (or reasons were) for the resignation.  This is a necessary step in determining whether or not Section 95(1)(c) applies.
20.	Because there are the doubts as to the facts which the Tribunal found to which we have referred, we are not in any position to substitute our own judgment for that of the Tribunal: for it is not our function, on appeal, to determine what facts are established by the evidence.  Accordingly, the case has to be remitted.  Both Counsel agree that it should be remitted to a fresh Tribunal.  
21.	When that Tribunal comes to determine the claim by Mr Arimoro, it will have to address the four matters that have to be satisfied before a dismissal is established under Section 95(1)(c).  They are, first, what the reason was (or the reasons were, if more than one) for the resignation; second, whether, given that reason (or those reasons), the resignation was caused by a breach of contract on the part of the Respondent; third, whether that breach was sufficiently serious to be repudiatory; and fourth, whether the Appellant, either expressly or by conduct, affirmed the contract notwithstanding the breach (e.g. by accepting the new terms) so as to disentitle him from resigning in reliance upon them.
22.	For those reasons, this appeal is allowed, and the matter remitted to a fresh tribunal for re-hearing.