APPEARANCES
| For the Appellant |
MR C BARKER
(of Counsel)
Instructed by:
Messrs Coole & Haddock Solicitors
5 The Steyne
Worthing
West Sussex BN11 3DT |
| For the Respondent |
MR M WEST
(Represenative)
Instructed by:
Peninsula Business Services
Riverside
New Bailey Street
Manchester M3 5PB |
MISS RECORDER ELIZABETH SLADE QC
- This is an appeal by James Leach from the decision of an Employment Tribunal dismissing his complaint of unfair dismissal.
- In his Originating Application Mr Leach alleged that he had been constructively dismissed on 30 March 2000. His former employers, in their Notice of Appearance, contended that they had dismissed Mr Leach summarily for gross misconduct on 19 April 2000.
- The Employment Tribunal found that his contract of employment terminated when Mr Leach resigned on 17 April 2000 and that "there is no evidence of any breach of contract by the Respondents that can justify the Applicant's resignation". Accordingly, having concluded that Mr Leach had not been constructively dismissed, the Employment Tribunal dismissed his claim for unfair dismissal.
- The Employment Tribunal came to its decision without hearing the Respondents' case. Of its own motion at the close of Mr Leach's case, without application from the Respondents, Flexiprint Limited, the Tribunal:
"…invited the Applicant's Counsel to address the Tribunal as to why the Respondents had a case to answer."
(Decision paragraph 5)
Having heard submissions on behalf of Mr Leach, the Tribunal dismissed his complaint.
The Issues on Appeal
- The amended grounds of appeal raise the following issues:
1 Whether the Employment Tribunal erred in law in considering of its own motion, without application from Flexiprint Limited, whether the Respondents had a case to answer.
2 Whether the Employment Tribunal erred in exercising its discretion in deciding Mr Leach's claim without hearing evidence from Flexiprint Limited.
3 Whether certain findings of fact were unsupported by evidence.
4 Whether conclusions that certain alleged acts did not amount to a fundamental breach of contract were perverse.
5 Whether, Flexiprint Limited having asserted in their Notice of Appearance that they dismissed Mr Leach, the Employment Tribunal erred in failing to consider the fairness of Mr Leach's dismissal. (This ground was added by amendment following a Preliminary Hearing before HH Judge Peter Clark, Mr Dawson OBE and Mrs Matthias.)
Mr Barker, Counsel for Mr Leach, sensibly acknowledged that a separate ground of appeal which refers to Article 6 of the Convention on Human Rights does not add to the arguments available under ground 2.
The facts
- We will set out a summary of the facts relevant to this appeal, taken from the Decision of the Tribunal and the bundle of documents before the Tribunal which was also before us.
- Mr Leach was a long-standing employee of Flexiprint having commenced employment on 1 February 1999. He was employed as a print finisher. There was an issue between the parties as to when and how his employment terminated. Mr Leach contended that his employment terminated by his resignation on 30 March 2000 which he alleged to be a constructive dismissal. Flexiprint Limited contended in their IT3 that Mr Leach was summarily dismissed on 19 March 2000.
- The Employment Tribunal found that for many years the Applicant had suffered from anxiety and depression and from numerous physical ailments that were probably stress related. The Tribunal found that whilst Flexiprint Limited had been told by Mr Leach's union in 1992 that it believed that the stress suffered by Mr Leach was partly caused by conditions in the work place and that a sickness certificate in January 1998 referred to physical problems probably being caused by stress, it held that it was only in early 2000 that Flexiprint Limited became aware of the extent of the problems and of the suggestion that they were caused wholly or partly because of the working environment.
- The Employment Tribunal found that Mr Leach had various complaints about his treatment by the Respondents over the years. The final incident occurred in February 2000. Mr Leach had attended a hospital appointment on a Friday and did not return to work after leaving the hospital at about 11.30am as he "felt in need of food and drink and being diabetic needed this urgently". On the following Monday Alan Squires, the Managing Director of Flexiprint Limited, told Mr Leach he should either make the time up by working additional hours some other time, or take the Friday as a days holiday, or agree to have a day's wages deducted.
- From 21 February 2000 Mr Leach was signed off work by his doctor and on 24 February Mr Leach's practitioner:
"wrote to the Applicant confirming that he had advised him to resign from his present work on medical grounds because he was suffering from severe anxiety, panic attacks with an underlying depression that is directly attributable to his work"
- By letter dated 30 March 2000 Mr Leach gave one week's notice to terminate his employment. He stated that he was resigning:
"because I feel you have left me no option – that my contract has been fundamentally breached"
Alan Squires responded by letter dated 4 April 2000 stating that he was:
"not willing to accept your resignation until we have had the opportunity to sit down and discuss the specific points you have raised"
and inviting Mr Leach to a meeting on 7 April.
- Mr Leach attended a meeting with Mr Squires on 7 April accompanied by a union representative. In a letter dated 7 April from the union representative to Mr Squires the representative set out the "points of understanding reached at the meeting", the first of which was:
"a) The one week notice of termination of employment by Jim Leach is recognised as being withdrawn and this withdrawal is accepted by the company"
Although the statement in the letter accords with the note of the meeting signed by the representative and by the works director, subsequently Mr Leach did not accept that his notice had been withdrawn.
- The Employment Tribunal found that Mr Leach remained on sick leave. It came to the notice of Flexiprint Limited that he had worked for a competitor for one day on 3 April 2000 (mistakenly stated as 3 March in the Decision). Mr Leach was invited to attend a disciplinary hearing at which the allegation of working for a competitor would be considered. On 13 April 2000 Mr Leach responded by writing that he was too ill to attend. Following further letters from Flexiprint Limited, Mr Leach wrote to Mr Squires by letter dated 17 April 2000:
"with regards to my letter of 30/3/2000, I resigned from your employment on that date"
In response to the letter from Mr Leach, Mr Squires wrote requiring him to attend a disciplinary meeting on 19 April. Mr Leach responded on 18 April:
"I can only repeat what I told you in my previous letter dated 17/4/2002. I resigned from your employment on 30/3/2000, I am no longer in your employment"
- The disciplinary hearing proceeded on 19 April 2000 in the absence of Mr Leach. Mr Squires decided to dismiss Mr Leach for gross misconduct with immediate effect and he was so informed by letter dated 19 April 2000.
The Conclusions of the Employment Tribunal
- In paragraph 4 (o) of the Decision the Tribunal held:
4 (o) "The Applicant's evidence to the Tribunal was that it was the letter of 30 March that had ended his employment, but it is clear from the documentary evidence that resignation was withdrawn. So it is only when the Respondents received the Applicant's letter of 17 April re-stating his decision to resign that the Applicant's employment ends"
- In paragraph 6 of the Decision the Tribunal held:
6 "Taking account of all the evidence presented by the Applicant, the Tribunal is satisfied that he has failed to show any possible fundamental breach of contract that could give rise to a claim for constructive dismissal and that it would therefore be unnecessary to hear evidence from the Respondents."
- In paragraph 9 of the Decision the Tribunal held:`
9 "The evidence shows that the reason for the Applicant's resignation was that he was suffering from serious ill-health and his doctor advised him that it would be inappropriate for him to return to work"
The Employment Tribunal held that Mr Leach's contract of employment was terminated on 17 April 2000 by his resignation. Because it held that he had failed to show any fundamental breach of contract by Flexiprint Limited, it concluded that Mr Leach had not been constructively dismissed.
Did the Employment Tribunal err in law in considering of its own motion whether the Respondents had a case to answer?
- This ground of appeal was not the subject of oral argument before us nor was it separately dealt with in the Appellant's Skeleton Argument. Rule 9 (1) of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 1993 ('the Regulations') which were in force at the time of the hearing provides:
"The Tribunal shall make such enquiries of persons appearing before it and witnesses as it considers appropriate and shall otherwise conduct the hearing in such a manner as it considers most appropriate for the clarification of the issues before it and generally to the just handling of the proceedings"
- In our judgment it is not an error of law for an Employment Tribunal in an appropriate case to consider of its own motion whether a Respondent has a case to answer. The parties appearing before it may be unrepresented and may not be aware of the possibility of making such a submission. The Regulations, both those in force at the time of the hearing before the Employment Tribunal in this case and the 2001 Regulations which replaced them, confer on Employment Tribunals a wide discretion in the conduct of proceedings which , in our judgment, enables an Employment Tribunal to consider of its own motion whether there is a case for a Respondent to answer. However, appropriate cases will occur but rarely and should be considered in accordance with the principles to be derived from the authorities.
Did the Employment Tribunal err in exercising its discretion in deciding Mr Leach's claim without hearing evidence from Flexiprint Limited?
- Mr Barker, Counsel appearing for Mr Leach, properly accepted that an Employment Tribunal has the power in an appropriate case to decide a case after the close of the evidence of the party on whom the burden of proof lies. However, he contended that in a constructive dismissal case it is only in exceptional circumstances that the Tribunal may decide the case at the close of the Applicant's evidence. He relies upon Ridley v GEC Machines Ltd [1978] 13 ITR 195 at page 197 B-C and Coral Squash Clubs Ltd v Matthews [1979] ICR 607 at pages 611 G to 612 A, in which the Employment Appeal Tribunal expressly approved what was said in Ridley. In Ridley the Employment Appeal Tribunal held at page 197 A:
"…the ordinary practice should be to hear what has to be said on both sides. All our experience – now getting on for two years – shows that where that is not done confusion very often arises, and even if it does not, a feeling of injustice is left with one party or the other. But that passage was not intended to say, not do we intend to say that there are no exceptions at all. There may be cases put forward which are so obviously hopeless that it would be a complete waste of time to call upon the Respondents to call evidence, and thus prolong the proceedings for what may be a long time at very considerable expense. So, yes, there may be exceptional cases but ordinarily at all events it is better to hear what everybody has to say."
Mr Barker also draws our attention to The Royal Free Hampstead NHS Trust v Mrs V Makani (unreported, Judgment 2/11/00) in which the principle formulated in Ridley and approved in Coral Squash Clubs Ltd was relied upon by the Employment Appeal Tribunal. He points out that Elwick v Kingston Upon Hull County Council (unreported, Judgment 18/10/94) in which the Employment Appeal Tribunal held at page 3 E-H:
"Where an employee is alleging that he had been constructively dismissed, it is for him to prove that he was so dismissed to an Industrial Tribunal and, therefore, unlike the case of a normal unfair dismissal application where the burden of proof lies on the employer, it is for the employee to commence the evidence and to satisfy the Tribunal on a balance of probabilities that the employers have so conducted themselves towards him that he was entitled to walk off from his employment."
was a judgment made on a preliminary hearing. The Appellant was in person and Ridley and Coral Squash Clubs are not referred to in the judgment. He therefore submits that we should follow Ridley and Coral Squash Clubs rather than Elwick.
- Mr Barker contends that this was not an exceptional case, that there were questions raised by Mr Leach's evidence which required a response from Flexiprint Limited. He further points out that the Employment Tribunal came to a conclusion on the effective date of termination of employment which was not contended for by either party.
- Mr Martyn West, representative on behalf of Flexiprint Limited, relies upon Elwick to contend that if the Employment Tribunal is of the view, accepting the Applicant's assertions as correct, that the case cannot be made out, it may dismiss the claim without hearing from the Respondents. Mr West did not seek to suggest that the earlier cases of Ridley and Coral Squash Clubs were based on erroneous principles. He contended that circumstances can be categorised as 'exceptional' if, taking the case of the party on whom the burden of proof lies at its highest, there is nothing to require the Respondents' answer. He contended that this was such a case and that Mr Leach would not have been assisted by the evidence of Flexiprint Limited because the burden of proof of dismissal rested on him. Accordingly, Mr West contends that the Employment Tribunal did not err in law in stopping the case without hearing the case of Flexiprint Limited.
- In our judgment, as we have already stated, an Employment Tribunal has a discretion to consider whether Flexiprint Limited had a case to answer. However, that discretion should be exercised with caution and in accordance with the guidance set out in the authorities. Ridley and Coral Squash Clubs establish that the threshold for determining that there is no case for a Respondent to answer is a high one. Those authorities refer to an approach that the Tribunal should reserve the exercise of its discretion to dismiss a case without hearing from the other party for exceptional cases which are 'obviously hopeless' (Ridley) or where the party on which the onus of proof lies has clearly failed either in law or in fact to establish what he set out to establish (Coral Squash Clubs). Insofar as these authorities evidence a difference on approach from that in Elwick, we prefer the approach in the earlier cases. As is not unusual in preliminary hearings before the Employment Appeal Tribunal, Elwick appears to have been decided without reference to the earlier authorities which Mr West did not seek to suggest were wrongly decided.
- The Employment Tribunal in the present case stated of the incident regarded as the 'final straw':
8 "Whilst it is arguable that the Respondents acted harshly in deducting a whole days pay, this is not something the Applicant pursued further, even though on previous occasions he had asked his union to assist with matters on his behalf. This incident cannot be described as a fundamental breach of contract. The incidents recounted by the Applicant are relatively few when spread over a period of many years and do not indicate any pattern of mistreatment that could justify his claim of a breach of an implied obligation of trust and confidence."
- In our judgment it is unlikely, having regard to the comments in paragraph 8 of the Decision set out above, that the Employment Tribunal applied the high threshold referred to in the guidance to the exercise of the discretion to dismiss a case 'at half time' set out in Ridley and Coral Squash Clubs. Further, in our judgment, the Employment Tribunal, in deciding to dismiss the claim on the basis that Mr Leach had failed to establish that he was dismissed, erred in law in failing to consider the effect of the acceptance by Flexiprint Limited, stated in its Notice of Appearance, that Mr Leach was dismissed by them on 19 April 2000. It is significant that the findings of fact made by the Tribunal stop at 17 April and do not include the dismissal letter of 19 April or refer to the disciplinary hearing of the same date. Copies of the minutes of the meeting and the letter were in the bundle before the Tribunal and no doubt would have been referred to if witnesses for Flexiprint Limited had given evidence. In these circumstances an admission of dismissal in the Notice of Appearance, at the very least, called for an explanation from the Respondents and, in our judgment, the Tribunal erred in law in deciding this case without hearing their case. A Respondent can choose not to call evidence. If that occurs a Tribunal may draw inferences from the material before it, which, in this case, included the minutes of the disciplinary meeting of 19 April and the dismissal letter together with the Notice of Appearance.
Further, in our judgment, the Employment Tribunal erred if and insofar as it held that the allegations of fundamental breach of contract were obviously hopeless or clearly not made out so as to justify the exercise of discretion to dismiss the application after the close of Mr Leach's case and after submissions on his behalf.
Were certain findings of fact unsupported by evidence?
- Mr Barker opened this appeal by contending that the Employment Tribunal were not entitled to conclude that Mr Leach resigned on 17 April 2000 having regard to the Applicant's contention that he was constructively dismissed on 30 March and Flexiprint Limited's contention that he was dismissed on 19 April 2000.
- Mr West contended that an earlier resignation was effective if it terminated the contract despite the Respondents' admission of a later dismissal. He submitted that the Tribunal concluded that the resignation was effective on 18 April once Flexiprint Limited had received the Applicant's letter of 17 April.
- At paragraph 4 (o) of the decision the Tribunal found as fact that:
4 (o) "The Applicant's evidence to the Tribunal was that it was the letter of 30 March that had ended his employment, but it is clear from the documentary evidence that resignation was withdrawn. So it is only when the Respondents received the Applicant's letter of 17 April re-instating his decision to resign that the Applicant's employment ends"
In our judgment the terms of the letter of 17 April 2000 and the response of Flexiprint Limited in a letter of 18 April by which they required Mr Leach to attend a disciplinary hearing on 19 April do not, without more, support the finding that Mr Leach's employment terminated on 17 April 2000.
As Flexiprint Limited noted in their response, Mr Leach's letter referred to the earlier resignation of 30 March rather than a further resignation. Further, if, as the Tribunal found, there had been no repudiatory breach by Flexiprint Limited, notice to terminate would have to be given by Mr Leach. Flexiprint Limited in its response of 18 April clearly indicated that it was not accepting a resignation, let alone a resignation without notice.
Were conclusion, that certain alleged acts did not amount to a fundamental breach of contract, perverse?
- In submissions before us, Mr Barker attached the conclusion of the Employment Tribunal that deducting a whole days pay for not returning to work after the conclusion at 11.30am of a hospital visit on a Friday in February 2000 was not a breach of contract. It was submitted that the conclusion was reached without regard to the fact that Fridays were half days. It is not clear to us that the Tribunal proceeded on a mistaken factual basis, however, we note that the Tribunal does not refer in its Decision to the fact that employees of Flexiprint Limited were only required to work for half a day on a Friday.
- Other conclusions were attacked as perverse in the Notice of Appeal. We note that Mr West accepted that the withholding of a pay rise would amount to a fundamental breach of contract if it were malicious.
- Since, in our judgment, the Employment Tribunal erred in law in deciding the complaint of unfair dismissal at the close of Mr Leach's case without hearing all the evidence, or if no evidence was called by Flexiprint Limited, without considering whether, and if so, what inferences should be drawn from any such silence, we express no view on this ground of appeal.
Did the Employment Tribunal err in failing to consider the fairness of Mr Leach's dismissal, Flexiprint Limited having asserted in their Notice of Appearance that they dismissed Mr Leach?
- Mr Barker contended that the Employment Tribunal should have considered the effective date of termination of Mr Leach's employment, and, if it accepted the contention of the Respondents, proceeded to consider whether the dismissal was fair.
- Mr West in his Skeleton Argument stated, obviously correctly, that:
"If there is no finding of a dismissal, there is no obligation on the Tribunal to consider whether the dismissal was fair or not."
- The logically prior question in a case where dismissal is in issue is to determine when and how the contract of employment came to an end. In this case both parties asserted, in their IT1 and IT3 respectively, that the contract of employment of Mr Leach had been terminated by dismissal but there were issues between them as to when and how the contract terminated. Since on the basis of the IT1 and IT3 it may have been open to the Tribunal to conclude, having heard all the relevant evidence, that Mr Leach resigned and that his contract of employment terminated before 19 April in circumstances which did not amount to constructive dismissal, in our judgment the Employment Tribunal did not err in failing to consider the fairness of Mr Leach's dismissal.
Conclusion
- The appeal succeeds. The Decision and Order of the Employment Tribunal are set aside. Mr Leach's application for unfair dismissal is remitted for rehearing before a differently constituted Employment Tribunal.
- The Employment Tribunal on a rehearing will determine when and how the contract of employment terminated. If the Employment Tribunal determines that Mr Leach was dismissed it will then determine the fairness of his dismissal.
