Appeal No.UKEAT/0046/04/CK

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal
On 17 December 2004
Handed down on 15 February 2005

Before
HIS HONOUR JUDGE J R REID QC
MRS R CHAPMAN
MS G MILLS MBE

MR M O'SHEA	APPELLANT

COVENTRY CITY COUNCIL	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR ANDREW SHORT
(of Counsel)
Instructed by:
Messrs Rowley Ashworth Solicitors
No. 1 Snow Hill Plaza
St Chad's Queensway
Birmingham
B4 6JG	
For the Respondent	MISS LORNA FINDLAY
(of Counsel)
Instructed by:
City Secretary's Department
Coventry City Council
Council House
Earl Street
Coventry
CV1 5RR	

SUMMARY

Applicant resigned ahead of disciplinary hearing.  He asserted constructive dismissal.  Employment Tribunal held he resigned in expectation of good reference enabling him to take another job.  On appeal he contended (1) The Employment Tribunal had failed to look at the overall picture of the employer’s conduct towards him.  (2) Certain findings of fact were perverse.  (3) The Employment Tribunal erred in law in concluding the employer’s conduct was not causative of his resignation.

Held (1) The Employment Tribunal had looked at the overall picture.  (2) The findings of fact were not perverse.  (3) The Employment Tribunal made findings of fact as to the cause of his resignation.

HIS HONOUR JUDGE REID QC

1.	This is an appeal against a decision of an Employment Tribunal held at Birmingham in July and August 2003. By its decision promulgated on 17 September 2003 the Tribunal dismissed the Applicant’s claims for unfair dismissal and race discrimination. The Applicant appealed against the dismissal of his unfair dismissal claim. When the matter came before the Employment Appeal Tribunal it was remitted to the Employment Tribunal for further reasons. Those reasons were promulgated on 24 May 2004.

2.	The background to the case is as follows. The Appellant was employed by the Respondent's Social Services Department initially as a stockman in February 1998 and then from October 1998 as an Agricultural Manager on Brandon Wood Farm, which is a working farm for people with learning difficulties. His employment was beset with difficulties. From April 1998 until his resignation on 19 September 2001, he was subject to five investigations into allegations of gross misconduct. On each occasion he was suspended. The shortest period of suspension was from 23 April 1998 until 9 May 1998. The longest was from 13 October 2000 until 26 April 2001. He resigned shortly before a further disciplinary hearing. He asserted that even though his union representative told him that the allegations about to be heard would be unlikely to result in his dismissal, other charges were likely to follow and he felt he had no option but to resign. He contended that he was victimised by the Respondent’s management by persistent malicious allegations of harassment and other misconduct. This, he asserted, was characterised by the excessive and unnecessary use of disciplinary procedures and long periods of investigative suspension.

3.	
On this appeal three issues were raised on behalf of the Applicant. They were (a) that the Tribunal considered individual incidents complained of but failed to consider whether the Respondent’s whole course of conduct constituted a breach of the implied term of trust and confidence; (b) that some of the findings of fact by the Tribunal were perverse; and (c) that the Tribunal erred in law in applying the wrong test of causation when considering why Mr O’Shea resigned. It concluded he resigned in the expectation of receiving a good reference which would enable him to take up other employment which he had been offered and could not therefore have been because of any alleged breach of the duty of trust and confidence.

4.	The starting point of the Applicant’s argument on the first issue was the summary of the law relating to constructive dismissal given by Dyson LJ in Waltham Forest LBC v Omilaju [2004] EWCA 1493 at paras 14 to 16. 

“14.   The following basic propositions of law can be derived from the authorities:
1.  The test for constructive dismissal is whether the employer’s actions or conduct amounted to a repudiatory breach of the contract of employment: Western Excavating (ECC) Ltd v Sharp [1978] 1 QB 761.
2.  It is an implied term of any contract of employment that the employer shall not without reasonable and proper cause conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee: see, for example, Malik v Bank of Credit and Commerce International SA [1998] AC 20, 34H-35D (Lord Nicholls) and 45C-46E (Lord Steyn). I shall refer to this as "the implied term of trust and confidence".
3.  Any breach of the implied term of trust and confidence will amount to a repudiation of the contract see, for example, per Browne-Wilkinson J in Woods v WM Car Services (Peterborough) Ltd [1981] ICR 666, 672A. The very essence of the breach of the implied term is that it is calculated or likely to destroy or seriously damage the relationship (emphasis added).
4.  The test of whether there has been a breach of the implied term of trust and confidence is objective. As Lord Nicholls said in Malik at page 35C, the conduct relied on as constituting the breach must “impinge on the relationship in the sense that, looked at objectively, it is likely to destroy or seriously damage the degree of trust and confidence the employee is reasonably entitled to have in his employer” (emphasis added).
5.  A relatively minor act may be sufficient to entitle the employee to resign and leave his employment if it is the last straw in a series of incidents. It is well put at para [480] in Harvey on Industrial Relations and Employment Law:
“[480] Many of the constructive dismissal cases which arise from the undermining of trust and confidence will involve the employee leaving in response to a course of conduct carried on over a period of time. The particular incident which causes the employee to leave may in itself be insufficient to justify his taking that action, but when viewed against a background of such incidents it may be considered sufficient by the courts to warrant their treating the resignation as a constructive dismissal. It may be the ‘last straw’ which causes the employee to terminate a deteriorating relationship.”
15.   The last straw principle has been explained in a number of cases, perhaps most clearly in Lewis v Motorworld Garages Ltd [1986] ICR 157. Neill LJ said (p 167C) that the repudiatory conduct may consist of a series of acts or incidents, some of them perhaps quite trivial, which cumulatively amount to a repudiatory breach of the implied term of trust and confidence. Glidewell LJ said at p 169F: “(3) The breach of this implied obligation of trust and confidence may consist of a series of actions on the part of the employer which cumulatively amount to a breach of the term, though each individual incident may not do so. In particular in such a case the last action of the employer which leads to the employee leaving need not itself be a breach of contract; the question is, does the cumulative series of acts taken together amount to a breach of the implied term? (See Woods v W. M. Car Services (Peterborough) Ltd. [1981] ICR 666.) This is the “last straw” situation.”
16.   Although the final straw may be relatively insignificant, it must not be utterly trivial: the principle that the law is not concerned with very small things (more elegantly expressed in the maxim “de minimis non curat lex”) is of general application.”

5.	Counsel went on to refer to the passage at para 19 that a final straw not itself a breach of contract might result in a breach of the implied term of trust and confidence. “The quality that the final straw must have is that it should be an act in a series whose cumulative effect is to amount to a breach of the implied term”. These principles were not in dispute. The issue was as to whether the Tribunal had applied them.

6.	Counsel for the Applicant submitted that the Tribunal should have adopted an approach analogous to that which Tribunals should adopt in sexual harassment and race discrimination cases. Counsel referred to Driskel v Peninsular Business Services Ltd [2000] IRLR 151 at para 12 and Derby Specialist Fabrication Ltd v Burton [2001] IRLR 69 at para 27. He suggested that the Tribunal should have made findings of fact without exercising any judgment as to whether each individual incident amounted to a breach of the implied term, and should only make its judgment as to whether there was any breach of the implied term when it considered the totality of the incidents complained of together. If there were individual assessments, he submitted, there was always a danger that the judgment would become fragmented and discursive and this is what had happened in the instant case.

7.	For the Respondent it was submitted that there was no reason to suppose that the Tribunal had not considered the Applicant’s complaints collectively as well as individually. The Tribunal had correctly identified the issue at paragraph 3 of its reasons, saying: “The first issue remaining is whether the employer’s whole course of conduct evinced persistent malicious allegations of harassment against the Applicant that in law constituted a breach of the duty of mutual trust and confidence.” The Applicant had set out individually twenty-two matters in his notice of appeal, but of those most were not raised in the Originating Application and five were not even known to the Applicant at the date of his resignation.

8.	The Tribunal dealt with the various matters raised before it. In our view the Tribunal was entitled not to take any pleading point on the failure of the Applicant to raise all the individual matters relied on in his Originating Application. The points were not relied on as individual grounds of complaint but as part of the general picture. The claim as presented by the Originating Application was not at all detailed in the particulars given. It referred not only to the matters raised in this appeal but also to matters relevant to his unsuccessful race discrimination claim and other matters which seem simply to have vanished from view. However the claim appears to have been advanced on an incremental basis and in looking at the criticisms made of the decision we have to bear in mind the way in which the claim grew. We have no doubt that it was because of this incremental approach that the Tribunal’s original decision was not as full as it might have been and that it was appropriate for the matter to be sent back for further reasons.  

9.	Of the matters raised in the Notice of Appeal only one matter was not mentioned in the original decision. In the supplemental reasons the Tribunal accepted that it had not dealt explicitly with one allegation (that disciplinary charges were maliciously made late on 16 July 2001 and were added to charges already made on 25 June 2001) but expressed the explicit view in its further reasons that the Respondent had been justified in acting as it did because the matters forming the substance of the later charges had only come to light during the course of an investigatory interview on 11 July 2001. Of the matters said not to have been known to the Applicant, these matters were the details of what was a general complaint by the Applicant, that he was being denigrated behind his back. In our judgment he was not prevented from relying on details of the alleged denigration which he discovered after he left in order to support the general belief which he says he had at the time. 

10.	The real question on this first ground of appeal is whether the Tribunal fell into error by not looking at the overall picture when it determined that there was no constructive dismissal. In our view, despite the time spent on developing the argument before us, the point is a short one.

11.	The Tribunal correctly directed itself at paragraph 3 of its initial decision: there can be no complaint about its statement that 

“The first issue remaining is whether the employer’s whole course of conduct evinced persistent malicious allegations of harassment against the Applicant that in law constituted a breach of the duty of mutual trust and confidence.” 

The Tribunal was reminding itself that it had to look cumulatively at the treatment of which the Applicant complained. It also recorded, as part of the submissions made on behalf of the Applicant, that “the above matters [ie the matters of which complaint were made], taken in the round, constituted a breach of the duty of mutual trust and confidence”. It did not however, having addressed the individual complaints, say at the conclusion of its reasons in its original decision that it had also considered the complaints cumulatively.

12.	When it gave further reasons, it was addressing particular concerns expressed by the Employment Appeal Tribunal (1) as to what findings it made on some of the matters the appellant asserted were not addressed in its original decision and (2) as to the issue of the causation of the Applicant’s leaving his employment. It is not surprising therefore that it did not on this occasion explicitly state that it had looked at the cumulative effect of such of the acts complained of as it found proved.

13.	The Tribunal did however take each of the assertions which the Applicant made in his notice of appeal and consider them individually and then considered them in groups. The suggestion was made that this demonstrated that the tribunal was not looking at the overall picture. In our view it did not. The format of the amended Notice of Appeal was to assert a general proposition under one sub-paragraph and then give particular instances of the general matter complained of in the following sub-paragraphs. Thus sub-paragraph C1 asserted that the Applicant was repeatedly charged with stale matters. Sub-paragraphs C2 to C5 gave specific instances that were relied on. In its further reasons the Tribunal dealt with each of specific allegations seriatim, and then dealt with the general complaint made in sub-paragraph C1. This was the pattern that was adopted for all the remaining sub-paragraphs C6 to C22. In our judgment this sensible way of dealing with the different groups of complaints does not suggest that the Tribunal was failing to look at the overall picture as well as the different parts of that picture.

14.	It should be observed that, in general, the Tribunal’s findings were adverse to the Applicant on the specific individual matters raised. This was not a case in which the Tribunal found that there were a number of straws but then failed to aggregate their weight. It was a case in which the Tribunal held that most of the straws relied upon simply did not exist.

15.	However the further reasons explicitly contradict the suggestion that the Tribunal did not look at the totality of such straws as it found did exist. At paragraph 9, having dealt both with the complaints in sub-paragraphs C2-5 and the general complaint at sub-paragraph C1, the Tribunal concluded

“The tribunal also considers that the findings that it made, when taken cumulatively with all the matters complained of, did not comprise a breach of contract.” 

Similarly at paragraph 30 it made clear that it was looking at the totality of the matters in issue when it wrote

“In relation to the allegations of the appellant at paragraph C18 as detailed in C19-C22, the Tribunal concludes that these matters were taken into account in its original decision, insofar as they were relevant to Mr O’Shea’s actions.” 

16.	Whilst it might have been neater and rather clearer if the Tribunal had spelt out at the end of its decision that it had looked at all the matters placed before it cumulatively as well as individually, perhaps by harking back to its earlier statement of the law, in our view the Applicant has wholly failed to persuade us that it erred in law in looking only at the individual complaints but failing to look at the totality. This ground of appeal fails.

17.	The second ground of appeal (accepted by the Applicant as being “subsidiary” and added by amendment) was that certain findings by the Tribunal were perverse. 

18.	The first finding said to be perverse was at paragraph 20 of the Tribunal’s further reasons. 

“Taking the matters raised in paragraphs C11 to C14 as a whole, the tribunal does not consider that the appellant’s line manager [Ms Toulson] repeatedly made statements to third parties that were calculated (or likely) to result in their making complaints against the appellant”. 

The complaint related to three statements allegedly made by Ms Toulson. The first was a statement to a Ms Hawthornthwaite, another worker, to the effect that he was behind a complaint made about her two years previously and he was opposed to her obtaining a post as a stockperson for which she had applied. The second statement allegedly made was to the mother of a client. It was asserted that Ms Toulson told the mother falsely that Mr O’Shea was in the habit of shouting at the client. The third allegation was that Ms Toulson had told a fellow worker of Mr O’Shea that another worker had told her that Mr O’Shea had told him that the fellow worker was smoking dope in the fields.   

19.	The only first hand evidence as to any of these allegations was that of Ms Toulson who denied making any of the statements. None of those to whom it was alleged the statements were made gave evidence. Ms Toulson said that insofar as there were records suggesting she had, they were mistaken. The Tribunal was entitled to accept that evidence. It is quite impossible to say in these circumstances (as was submitted to us) that the “evidence demonstrated that [Ms Toulson] had made such statements.” Counsel for Mr O’Shea sought to persuade the Employment Tribunal to the contrary but failed. The Tribunal saw the witness and was entitled to reach the conclusion which it did. The Tribunal’s finding of fact was clear and there was no need (contrary to the submission on behalf of Mr O’Shea) to deal with it any greater length. 

20.	The second respect in which it was asserted that the Tribunal’s decision was perverse was in failing to find that Mr O’Shea was subject to misconceived disciplinary charges in 2001. The two charges submitted to be misconceived were (1) breaching the terms of his suspension by talking to two members of the Respondent’s transport staff on 5 July 2001 about issues relating to his suspension and (2) attending the Respondent’s Torrington site (a site separate from the farm) in breach of his instructions. In the event neither of the charges was proceeded with.

21.	As to the first of these charges, the evidence appears to have been that there was an anonymous statement from two colleagues of Mr O’Shea that he had spoken to them about being suspended and an offer of £5000 to leave. The terms of the suspension were set out in writing in a suspension letter: 

“During the period of suspension you must not discuss the contents of this investigation or any information pertaining to the enquiries with any employees of the City Council, including the staff at Brandon Wood Farm. You must also not approach any Departmental Service Users to discuss the contents of this investigation or information pertaining to these enquiries.”

22.	Counsel submitted that there was no suggestion in the statement that Mr O’Shea had discussed “the contents of this investigation or any information pertaining to the enquiries” and that therefore the documents in the possession of the Respondent demonstrated that the charge was misconceived. Accordingly the Tribunal’s finding that the charge could not be regarded “as patently unreasonable or misconceived on the information known to the respondent” was perverse. 

23.	The point is a short one. In our judgment the Tribunal was entitled to take the view that the bringing of the charge was not patently unreasonable or perverse. The fact that upon maturer consideration it becomes clear that the charge should not be proceeded with does not automatically mean that the original decision to charge was either patently unreasonable or misconceived.

24.	
As to the second of the charges, there was a specific instruction that he should not go to the Torrington site until 14 May. His work plan was focussed directly to work on the farm and there was therefore no expectation that he would go anywhere near the Torrington site. According to information gathered during the investigatory process before this charge was laid Mr O’Shea knew that staff at the Torrington site were experiencing stress difficulties and that the Council needed to plan carefully to address this. The evidence before the Tribunal was that Ms Womble, the services manager, believed she had issued a general injunction against Mr O’Shea attending the Torrington site, though examination of the written instruction showed that it was in fact only for a period of a fortnight. Again, we take the view that the Tribunal was entitled to take the view that “it could not be considered a patently unreasonable charge, even if it was not one which could be sustained when carefully examined.” It may be that another Tribunal would have taken a different view, but that is not enough to render a finding perverse.

25.	The third issue raised on the appeal was the issue of causation. It was submitted that the Tribunal failed to apply the guidance given in Jones v F. Sirl and Sons [1997] IRLR 493 (a case in which a lady with some thirty years service had resigned). Counsel also referred to Nottinghamshire CC v Meikle [2004] IRLR 703, decided after the decision of the Tribunal. Given the Tribunal’s finding that there had not been any fundamental breach of Mr O’Shea’s contract of employment, the Tribunal’s findings on this point were unnecessary to its decision. Similarly, since the challenge to the Tribunal’s other findings has failed it is not strictly necessary for us to deal with the point. However, since the point was argued before us, we think we should express our views.

26.	In the Sirl case at para 10 Judge Colin Smith said: 

“In our judgment, it is clear… that in order to decide whether an employee has left in consequence of fundamental breach, the industrial tribunal must look to see whether the employer’s repudiatory breach was the effective cause of the resignation. It is important, in our judgment, to appreciate that in such a situation of potentially constructive dismissal, particularly in today’s labour market, there may well be concurrent causes operating on the mind of an employee whose employer has committed fundamental breaches of his contract of employment entitling him to put an end to it. Thus an employee may leave both because of fundamental and repudiatory breaches, and also because of the fact that he has found another job. In such a situation, which will not be uncommon, the industrial tribunal must find out what the effective cause of the resignation was, depending on the individual circumstances of any given case.”   

27.	In the Nottinghamshire case at para 30 Keene LJ accepted that it was a question of fact why the employee resigned and then reaffirmed that for a constructive dismissal to arise the employee must resign in response to a fundamental breach of contract and   33 Keene LJ (with whom Thorpe LJ and Bennett J agreed) referred to the Jones case and said:

“It has been held by the EAT in Jones v Sirl and Son (Furnishers) Ltd [1997] IRLR 493 that in constructive dismissal cases the repudiatory breach by the employer need not be the sole cause of the employee's resignation. The EAT there pointed out that there may well be concurrent causes operating on the mind of an employee whose employer has committed fundamental breaches of contract and that the employee may leave because of both those breaches and another factor, such as the availability of another job. It suggested that the test to be applied was whether the breach or breaches were the ‘effective cause’ of the resignation. I see the attractions of that approach, but there are dangers in getting drawn too far into questions about the employee’s motives. It must be remembered that we are dealing here with a contractual relationship, and constructive dismissal is a form of termination of contract by a repudiation by one party which is accepted by the other: see the Western Excavating case. The proper approach, therefore, once a repudiation of the contract by the employer has been established, is to ask whether the employee has accepted that repudiation by treating the contract of employment as at an end. It must be in response to the repudiation, but the fact that the employee also objected to the other actions or inactions of the employer, not amounting to a breach of contract, would not vitiate the acceptance of the repudiation. It follows that, in the present case, it was enough that the employee resigned in response, at least in part, to fundamental breaches of contract by NCC.”

28.	The Tribunal’s findings of fact in relation to the resignation have to be seen against the claim made in Mr O’Shea’s IT1: “…and on 18 September [2001] I felt I had no choice but to resign from the local authority’s employment” and the fact that Mr O’Shea had made no mention of his seeking or having found another job before his resignation in  either  his IT1 or his original witness statement.. Those findings were at paragraph 16 of its original decision:

“Although we have concluded that there was no breach of the duty of mutual trust and confidence, the Tribunal has considered the question as to whether Mr O'Shea resigned in response to any purported breach by the Council. The evidence was that Mr O'Shea had secured another post just prior to the disciplinary hearing that was to be held on 19.9.01. He had sought assurances that he would receive a good reference and was told by his trade union that that was the case. Mr O'Shea did not see the reference that was prepared but relied on the assurances given via his trade union that he would receive a satisfactory reference. Mary Summers, on behalf of the respondent, did not give any such assurance directly to Mr O'Shea and said to him that there would have to be a reference to the existence of an outstanding disciplinary issue at the time of resignation, as is the Council's normal practice. In these circumstances Mr O'Shea resigned on the morning of the disciplinary hearing. We conclude that Mr O'Shea's resignation was more in expectation of good references than in reaction to the prior events. Therefore, Mr O'Shea's resignation cannot be said to have taken place in relation to the alleged breach of the duty of mutual trust and confidence and thus to have constituted a constructive dismissal. It follows that in the absence of a constructive dismissal, the question of unfair dismissal cannot arise.”

29.	The further reasons of the Tribunal distinguished the Sirl case on the ground that the Tribunal found there was no breach of contract by the Respondents. But at paragraph 32 the Tribunal held that 

“in any event even the alleged repudiation was not the effective cause of the termination of the contract of employment, which occurred in the expectation of a satisfactory reference”. 

30.	It was submitted that the reason why Mr O’Shea was seeking other employment was the alleged breach of the implied duty. Thus it was said that his resignation was as a result of his treatment (irrespective of the terms of the reference he expected to get) and he was by his resignation accepting the Respondent’s repudiation. This, it was submitted, was something the Tribunal failed to deal with, and it should have found that his resignation was the consequence of the Respondent’s repudiation, irrespective of the reference question.

31.	 The Tribunal had in mind the Sirl case (with its reference to concurrent causes) and in its further reasons was responding to the direct question put in the decision of the Employment Appeal Tribunal: 

“…did the Tribunal conclude, by reference to Jones v Sirl, that the alleged repudiation, if established, was not the effective cause of the termination of employment, and if so, why?”  

The Tribunal answered the question and made a finding of fact. In our judgment in doing so it did not misinterpret the judgment in the Sirl case, nor did it fall into any error of law discernible as a result of the law subsequently being clarified by Keene LJ in the Nottinghamshire case. The reason, as found by the Tribunal, why he quit was (as Keene LJ pointed out) a question of fact. He had got another job for which he needed a satisfactory reference from the Respondent. He believed, as a result of what he was told by his union representative, that if he resigned he would get a satisfactory reference. That, in the view of the Tribunal, was why he quit, not because (as he asserted in his IT1) because he felt he had no choice.

32.	It follows that this appeal must be dismissed.