Appeal No. EAT/0259/03 MA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 14 August 2003

Before
HIS HONOUR JUDGE J MCMULLEN QC
MRS J M MATTHIAS
MR G H WRIGHT MBE

MR J KIRBY	APPELLANT

CIRCULATION RECORDINGS LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR JOHN FALKENSTEIN
(of Counsel)
Instructed by:
Messrs Blackett Hart & Pratt Solicitors
Eldon Chambers
23 The Quayside
Newcastle upon Tyne DE1 3DE	
For the Respondent	MR DUNCAN CLARK
(Consultant)
Instructed by:
Messrs Pollard Associates
The Old Mill
Reedness Road
Swinefleet
East Yorkshire DN14 8EN	

HIS HONOUR JUDGE J McMULLEN QC

1	The question to be decided in this case is whether an employee can be said to have communicated his acceptance of an employer’s repudiation of a contract of employment by saying or doing nothing; alternatively, by resigning by conduct in the form of doing nothing.  The judgment represents the views of all three members.  We will refer to the parties as Applicant and Respondent.

Introduction

2	It is an appeal by the Applicant in those proceedings against a reserved decision of an Employment Tribunal sitting at Newcastle, Chairman Mr J Hunter, registered with Extended Reasons on 22 October 2002.  The hearing took place over three days with a further day in chambers.  The Applicant was represented there and here by Mr John Falkenstein of Counsel.  The Respondent was represented there by a solicitor and today by Mr Duncan Clark of Counsel.

3	The Applicant claimed constructive unfair dismissal and unlawful deductions from pay.  The Respondent contended that the Applicant was correctly paid, had resigned and had submitted his Originating Application out of time.

The issues

4	The essential issues, as defined by the Employment Tribunal, were as follows (and we leave aside the issue of pay):

(1)	How did the contract of employment come to an end?  What was the effective date of termination?  Was the claim made in time?

(2)	If the contract came to an end by resignation were there any fundamental breaches of contract entitling the Applicant to repudiate the contract?  Were such breaches the cause of the resignation?  Did the Applicant accept the breaches and delay for too long before resigning?

The Decision

5	The Employment Tribunal decided that the claim for unlawful deductions was well-founded.  That is not the subject of appeal.  A remedy hearing has been held.  The claims for constructive and actual unfair dismissal were each dismissed.

6	The Tribunal also decided in the Applicant’s favour that it was not reasonably practicable for him to present his claim within time; but he had presented it within such reasonable time thereafter, for the purposes of limitation under section 111.  Again, no point is taken on appeal against that decision, the Originating Application having been presented on 11 January 2002.

7	The Applicant appeals against the decision on unfair dismissal.  Directions sending this appeal to a full hearing were given at a Preliminary Hearing by Mr Recorder Luba QC and members.

The Legislation

8	The relevant provisions of the legislation are the Employment Rights Act 1996, sections 95 (1) (a) and (c), which define dismissal and what is known as constructive dismissal:

95	(1)	“For the purposes of this Part an employee is dismissed by his employer if (and, subject to subsection (2) and section 96, only if)-
(a)	the contract under which he is employed is terminated by the employer (whether with or without notice),
…
(c)	the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct.”

and section 97 (1) (a) and (b) which deal with resignations:

97	(1)	“Subject to the following provisions of this section, in this Part "the effective date of termination" –
(a)	in relation to an employee whose contract of employment is terminated by notice, whether given by his employer or by the employee, means the date on which the notice expires,
(b)	in relation to an employee whose contract of employment is terminated without notice, means the date on which the termination takes effect…”

Employment Tribunal Directions

9	The Tribunal cited none of the above, although it referred to section 23 which relates to limitation – a matter upon which there is no longer an issue.  It directed itself by reference to Western Excavating (EEC) Ltd v Sharp [1978] ICR 221, the relevant authority in relation to constructive dismissal.

The Facts

10	The Respondent company provides music training and support to musicians.  It is a small company with limited administrative resources.  The original directorship was Mr Graeme Robinson and Mr Martyn Alderdyce, together with Mr Robinson’s late father.  There was insufficient profit for those engaged to receive remuneration and so in 1999 a contract was acquired from the Employment Services New Deal for Musicians Programme to deliver music open learning provision.  There was rigorous monitoring, pursuant to the government’s regime for such new deal contracts.  The Applicant accepted he had not been employed by the Respondent prior to September 1999.  He was employed at £27,800 a year, although that was subject to a dispute resolved in favour of the Applicant which is taken no further.

11	During the course of 2001 there were discussions between Mr Robinson and the Applicant about the Applicant’s continuing role.  There were occasions on which the Applicant had been dismissed using express terms by Mr Robinson.

12	The Tribunal concluded issues around each of those events by deciding that he had not been dismissed on 25 June 2001.  It also resolved that the refusal by the Applicant to attend at Stockton Music Festival in July 2001 was not a resignation by the Applicant; and further that the Applicant was not under an effective suspension from 25 June 2001, because effective words of suspension had not been communicated to him.

13	The central issue for the Tribunal to decide initially was what had happened in August and 2001.  On 25 June a meeting had occurred when words of dismissal were used and retracted.  On 14 August 2001 Mr Robinson invited the Applicant to attend on 28 August to discuss the Applicant’s views on the change of duties, more in favour of music than in finance.  It was noted as follows:

“Throughout our discussions you have remained an employee of the company and have been paid accordingly.”

14	The Applicant decided to go on holiday and on 24 August said he would be away until 9 September.  He said this:

“In order to give full consideration to your suggestions will you please send me all the relevant details.”

His holiday had been timed in order to avoid a number of dates including Mr Robinson’s wedding and honeymoon leave in September.

15	On 9 September the Applicant returned from his holiday.  That date is significant, for it appears as a finding in several places in the Tribunal’s reasons.  In particular the Tribunal said this:

44	“He returned from his holiday on 9 September.  It seems to us that by failing to get in touch promptly with Mr Robinson on his return from holiday on 9 September the Applicant, by his conduct, was communicating to the Respondent no longer to be bound by the contract of employment and had in fact resigned with effect from that date, i.e. 9 September.  None of the letters following that date are sufficient, in our view, to constitute evidence that the employment relationship was continuing.  We therefore find that the Applicant resigned and that the effective date of termination was 9 September 2001.”

Thus, the Tribunal fixed the date of termination.  It then went on to decide that on that date the resignation had not been forced, in other words, there was no constructive dismissal.

The Contentions

16	The Tribunal had adopted the following proposition of law, which is not resisted by Mr Clark:

37	“A resignation is the termination of a contract by an employee.  Normally a resignation will be expressed in a formal way.  The fact of a resignation can, in certain circumstances, be inferred from the employee’s conduct and the surrounding circumstances.  The intention to leave has to be communicated to the employer.”

17	From the authorities which have been put before us, including Southern v Franks Charlesly & Co [1981] IRLR 278 CA, an unambiguous resignation by words may be effective and Mr Clark does not dissent from the extrapolation that unambiguous conduct may constitute resignation.

18	On behalf of the Applicant it is contended that there must be some form of communication in unambiguous form in order for there to be a resignation.  It is further contended that the subsequent dealings between the two of them indicate a continuing relationship of employment.  For example, by letter of 28 September 2001 Mr Robinson is making enquiries consistent only with his being the employer of Mr Kirby.  Thus the Tribunal erred in its depiction of the events on 9 September as being a resignation.

19	On behalf of the Respondent it is accepted, graciously by Mr Clark, that some event had to occur unambiguously on 9 September on these findings.  It is further accepted that the letter of 28 September is more consistent than not of there being a continuing employment relationship, for it seeks from the employee an explanation for his non-attendance on various occasions which would be irrelevant had they ceased to be in an employment relationship together.
The Legal Principles

20	The principles are correctly enunciated in paragraphs 37 and 38 of the Tribunal’s reasons which are not in dispute before us.

21	We reject the arguments of the Respondent, weakly submitted as they are in the light of our questions to Mr Clark, because nothing could have happened on Sunday 9 September which would unambiguously point to a resignation.  We did not discuss in debate with the advocates what might be examples of conduct but simply assumed that some conduct could ineluctably point to a resignation.

22	However, in this case the Applicant did nothing on that date and therefore could not be said to have communicated anything, nor in the circumstances surrounding that date, could he be said to have unambiguously resigned.  After all, he did not have to be at work on that day and, on any account, he was still employed until 28 August when the meeting would have taken place.

23	Thus we hold the Tribunal erred in law in its application of the legal principle since no findings are made as to what actually occurred on that date.  We have no doubt that the matter here is a question of law for we apply the judgment of Lord Hoffman in Carmichael v National Power [2000] IRLR 43 HL at paragraph 28, that the construction of these documents which we have referred to constitutes a question of law.  The Tribunal erred in deciding that there had been a resignation on 9 September.  Further, by reference to the letter of 28 September it cannot be said that the Applicant had ceased to be an employee by that date.

24	Thus we set aside the decision of the Tribunal and uphold the appeal.
Disposal

25	Having canvassed various forms of disposal with the advocates it is common ground that this matter can go back to the same Employment Tribunal, since it is unclear to us what case is being advanced on behalf of the Applicant as to the effective date of termination.  The Originating Application in its printed form cites 14 November 2002, which has been struck out and replaced in manuscript by 14 February 2002 (we think 14 November 2002 is an obvious error).

26	It cannot be said that we have sufficient material upon which to decide whether there was a resignation on any given date, and particularly not 14 November on the present state of the pleadings.  That is a matter for the Employment Tribunal.  It will also have to approach with an unfettered mind the question of whether on whatever date it decides (if it decides) there was a resignation, such resignation was pursuant to a repudiation by the Respondent.  Those are matters which will go back to the Employment Tribunal.

27	We direct that Skeleton Arguments be exchanged and lodged with the Employment Tribunal 14 days from today.  Both parties agree that it is not necessary to hear further evidence.