Mr B Griffith v WM Morrison Supermarket plc: 1600076/2020
EMPLOYMENT TRIBUNALS
Case No 1600076/2020
Between
Mr B GriffithClaimantWM Morrison Supermarket plcRespondent
Before
Employment Judge C SharpMr D Stewart (instructed by Counsel) for claimantMr N Singer (instructed by Counsel) for respondentDate 13 November 2020
JUDGMENT
The decision of the Tribunal is that:-(1) The claimant’s claim of constructive unfair dismissal is not well founded and is dismissed;(2) The claimant’s claim of breach of contract is not well founded and is dismissed.
REASONS
[1]The claimant, Mr Benjamin Griffith, was a store manager for WM Morrison Supermarket PLC, the respondent and a well-known national chain of supermarkets. The claimant was employed between 26 March 2016 and 18 November 2019, his final role being the store manager of the Cardiff Bay branch of the respondent. The claimant resigned from his employment and confirmed that it was his final intention to resign with immediate effect on 18 November 2019 in an email to Ms Hughes (after the claimant sent a resignation letter on 13 November 2019).[2]The claimant presented his complaint to the employment tribunal on 7 January 2020, the parties having undertaken a period of ACAS early conciliation. The complaint consisted of two heads of claim, a constructive unfair dismissal and a breach of contract claim in respect of failure to pay notice pay or sick pay. In essence, the claimant asserted that the respondent fundamentally breached the contract of employment between the parties by failing to pay sick pay, which he was entitled to treat as a repudiatory breach of contract and a dismissal, which he argues was unfair. The claimant argues that he is contractually entitled to sick pay and notice pay.[3]The respondent’s position is that it fully denies the claimant’s claims. It denies that it fundamentally breached the claimant’s contract by indicating to him through a letter from Mr Mark Kirman, the claimant’s line manager and the regional manager, dated 8 November 2019 that the contractual sick pay would not be paid as the respondent had commenced an informal performance process in respect of the claimant which entitled it to withhold sick pay.
Background
[4]The background to this claim is undisputed by the parties except where I indicate otherwise. The claimant previously had been employed by another national chain of supermarkets, albeit not as a store manager, and on commencement of his employment with the respondent worked in a number of branches for it. Some of the branches which the claimant had managed for the respondent had seen significant improvements under his management, and the claimant wished to return to his home area of Cardiff for personal reasons. A vacancy in the Cardiff Bay store arose, and the claimant was appointed the store manager for this store around February or March 2019. The Cardiff Bay store was a challenging store, viewed as underperforming, and the previous store manager had left under a cloud. The claimant was aware of the challenge but the parties were confident that the claimant would be able to turn the store around and put it on a positive footing.[5]The claimant reported directly to Mr Kirman, the regional manager, whose office was located upstairs within the store, though Mr Kirman spent time visiting the stores within his region. The location of his office meant that Mr Kirman had occasion to visit the Cardiff Bay store more often than most. Ms Nerys Hughes, an old acquaintance of the claimant’s from their mutual employment at a different national chain of supermarkets, was the regional people manager for South Wales for the respondent and supported Mr Kirman where appropriate.[6]Due to the difficulties with the Cardiff store, the parties agree that the claimant was given extra support when he took over its management, though they differ over the period of time and the amount of support that the claimant was given and required. Whilst I heard a good deal about these issues, I did not consider them relevant in order to determine the issues before the tribunal at the final hearing. This was because the constructive unfair dismissal case had not been pleaded as a last straw case (a point which was confirmed at the start and end of the proceedings) and turned solely on the allegation that the contract of employment was fundamentally breached by the notification that the claimant’s sick pay would be withheld (a development of the claimant’s case to which the respondent did not object). As a result, I do not intend saying anything further relation to the historic issues but turn to the next key event in the timeline.[7]Following the claimant’s appointment as store manager of the Cardiff Bay store, there were a number of meetings between him and Mr Kirman. In August 2019, in his midyear review, the claimant was given the score of 2.2. According to the evidence of both the claimant and Mr Kirman, as well as the documentation within the hearing bundle from the midyear review, this grade was one where the performance had been broadly satisfactory. Mr Kirman’s and Ms Hughes’ position was that the claimant had been given the score, despite the actual level of performance of his store, because he had been put in a challenging position, was making progress albeit not the amount of progress that Mr Kirman and Ms Hughes had expected, and by the end of the year was likely to have achieved this grade. The claimant points to the scoring as evidence that by August 2019 his performance was satisfactory but in his oral evidence said that “the review was full of negatives. I had a list of achievements and it was dismissed” and “things to fix” were discussed.[8]The parties agree that on 2 September 2019 there was another meeting between the claimant and his store HR partner and Mr Kirman and Ms Hughes. Again, I heard much about this meeting, but there was broad agreement that the purpose of the meeting was for the priorities of the claimant to be identified with the aim of him then achieving them. It was a meeting where much was discussed by those who attended but it was not a formal performance meeting; Ms Hughes in particular described the session as “coaching”.[9]In October 2019, the claimant’s case is that there was another meeting between the claimant and Mr Kirman. The claimant’s account of this meeting largely matches Mr Kirman’s – the only difference is that Mr Kirman says it happened on 2 September. The date is less important than what happened. Both parties accept that the claimant was challenged about his performance and he was told he had four weeks to improve, failing which he would be made subject to a formal performance improvement plan. The claimant says his request for support was refused and added “I didn’t take the informal meeting seriously as no support was offered”, but there is no dispute that there was a discussion about the claimant’s performance and the need for him to improve. The claimant gave evidence that Mr Kirman spoke to all store managers about achieving “8 out of 10” in October 2019 in a conference call.[10]On 5 November 2019, the claimant had a day off and Mr Kirman inspected the Cardiff Bay store. He took many photos of what he found, and was unhappy with what he had seen. I have seen the photos and accept the claimant’s oral evidence that some of the images captured by the photographs were common sights that one would see in an average supermarket throughout the UK such as stock being displaced, end labels not being properly displayed, and an element of untidiness and poorly presented stock. The claimant pointed out that it appeared some of the photos have been taken while shelves were in the process of being stocked. However, other photos were of a different nature, which the claimant himself accepted, and showed several empty shelves, a large plastic cart full of rubbish, stock balanced on top of plain brown cardboard boxes, shelves containing a myriad of unrelated items, discarded boxes left on top of stock, cleanliness issues and large piles of abandoned stock in aisles.[11]Mr Kirman felt this was not acceptable and far from the goal of achieving “8 out of 10”. He emailed the claimant on 6 November 2019, saying “we have previously discussed the poor standards of your store and it is evident this has not improved and you have failed to move standards forward”; Mr Kirman added that there would be a discussion on Thursday. The claimant in his evidence accepted he saw this email, and became so unwell that he had to stop work, and commenced a period of sick leave. This was notified to Ms Hughes in an email from the claimant of 6 November 2019 which said he was going to see his GP and was suffering from suicidal ideation, describing Mr Kirman as “the major trigger for my anxiety”.[12]The response to this email was a letter from Mr Kirman of 8 November 2019. Mr Kirman describes this letter as being mostly supportive, though the majority of it details to the claimant that Mr Kirman had decided to withhold his contractual sick pay on the basis that he believed the sick leave had been caused by the claimant facing informal performance processes, which was a justification for withholding sick pay under the terms of the policy (which contained a non-exhaustive list of reasons to withhold). The claimant objected, having read this letter on 9 November 2019, and notified the respondent that he believed this to be a repudiatory breach of contract on 10 November. On 13 November, the claimant attempted to resign. On 17 November 2019, Ms Hughes asked the claimant to reconsider the matter, having tried to speak to him on the telephone. On 18 November 2019, the claimant confirmed in writing that he wished to resign with immediate effect, which was accepted by the respondent. The parties agree that no formal process in respect of the claimant’s performance had begun. The law and submissions[13]S.94 of the Employment Rights Act 1996 (“the Act”) confirms that an employee has the right not to be unfairly dismissed, while s.95 (1)(c) confirms that an employee is dismissed by his employer if the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate without notice by reason of the employer’s conduct. This is why the first question that the tribunal must answer is whether the respondent fundamentally breached the contract in a way that goes to the root or the heart of the contract? The claim as pleaded by the claimant was that the respondent withheld contractual sick pay; the oral evidence of Mr Kirman and Ms Hughes was that the claimant had been notified that there was an intention to withhold his sick pay but due to the monthly payment cycles the sick pay had not yet been withheld in reality and the decision could have been reversed had the claimant provided medical evidence showed he was genuinely unwell and not staying away from work due to the informal performance processes. The respondent’s point is that the claimant had “jumped the gun” and resigned in anticipation.[14]The next question if I do find that there was a fundamental breach of contract by the respondent was whether the claimant affirmed the breach, though given the speed at which the claimant did resign, I indicated that it was unlikely to be an issue arising here at the outset of the hearing. The third question was whether a substantial reason for the claimant’s resignation was due to the breach of contract; the respondent questioned the claimant about a catering business he set up shortly after his resignation.[15]If these questions were found in the claimant’s favour, then I would find that a constructive dismissal had taken place, and I would need to consider whether the dismissal was fair. S.98 of the Act applies if I find that there has been a dismissal. The respondent has pleaded capacity or some other substantial reason as the reasons for the claimant’s dismissal in the event that I find there was a dismissal and it is for the respondent to show such a reason exists (if there is a dismissal). Capability refers to the ability of the claimant to perform work the kind which was employed by the respondent to do while some other substantial reason must be the kind such as to justify the dismissal of an employee holding the position which the claimant held, often described as a “sound, good business reason” (Hollister v National Farmers Union [1979] IRLR 238, [1979] ICR 542).[16]I am required to consider all the circumstances, including the size and administrative resources of the respondent, when deciding if the respondent acted reasonably in treating the reason for dismissal is sufficient for dismissing the claimant, as well as equity and the substantial merits of the case, and if the procedure used was fair. Finally, I need to consider whether the claimant had contributed to his dismissal through his own conduct and if any failing I may find on the part of the respondent made any difference and what the likely outcome would have been had such a failing not occurred (referred to as a Polkey deduction from the case of Polkey v AE Dayton Services Ltd [1987] UKHL 8).[17]Given that the constructive unfair dismissal case centres on whether a breach of contract had been undertaken by the respondent, and there is also a breach of contract claim in respect of the same issue, I will have to engage with the issue as to whether the respondent was entitled to withhold the claimant’s contractual sick pay in the circumstances. Did the respondent indicate that it no longer intended to be bound by the terms of the contract? I was supplied with authorities by Mr Singer (Abbey National and another v Chagger [2010] I.C.R. 397 (2009); IBM United Kingdom Holdings Ltd and another v Dalgleish and others [2017] EWCA Civ 1212 and United First Partners Research v Carreras [2018] EWCA Civ 323), who appeared on behalf the respondent, but at the outset of the hearing I confirmed with both Counsel that I would need to consider whether the respondent’s exercise of its discretion had been unreasonable or capricious, reminding myself that I should not substitute my view for that the respondent. I have to consider whether the respondent had acted in good faith and whether it had acted in a way consistent with the mutual duty of trust and confidence between the employer and the employee. Relevant to this was my view of the rationality of the process the respondent used to make the decision (rather than the rationality of the outcome), whether relevant matters were taken into account and if the decision was one that no reasonable decision maker would have reached.
The hearing
[18]The evidence before the tribunal consisted of an agreed hearing bundle, and witness statements from the claimant, Mr Kirman and Ms Hughes, all of whom gave evidence orally in addition and were subjected to questioning. Broadly, I found the relevant evidence of the witnesses to be internally consistent and also consistent with the contemporaneous documents, though understandably they had their own different perspective about the events relevant to this case and differed at points about dates. While Mr Singer, on behalf the respondent, asked the claimant a number of questions designed to challenge his credibility as a witness and challenging a number of allegations made about Mr Kirman’s conduct, I did not find this a particularly helpful approach. This was because the core of this claim turns on the decision of the respondent through Mr Kirman to notify the claimant of its intention to hold his sick pay - the allegations made by the claimant were irrelevant and his credibility on those points would not assist me to make findings, which would mainly be about the respondent and its decision making process. For example, it would not assist the tribunal to determine the claims to make a finding as to whether Mr Kirman referred to the chief executive as “David” or “Lepley” or the amount of support offered to the store when the claimant was appointed; what is relevant was why the decision was made to give the notification about sick pay to the claimant and the factors involved in making that decision.[19]The critical evidence within the hearing bundle was not challenged. The respondent’s policy allowed it to withhold sick pay – the issue at its heart was whether it made the decision to do so in the claimant’s case rationally or instead had acted unreasonably or capriciously. The claimant accepted in his evidence he had seen the email of 6 November and that this led to his departure on sick leave from the store, which is consistent with what happened and the surrounding evidence.[20]Was the claimant facing informal performance management? As set out in paragraph 9 above, the parties agree in the autumn of 2019 the claimant had been told that his performance was not satisfactory and he had four weeks to improve or face a formal performance improvement plan. The email of 6 November 2019 from Mr Kirman to the claimant was also clear – the store as managed by the claimant was not currently of a satisfactory standard and not achieving the “8 out of 10” goal set by Mr Kirman, and there would be a discussion about this. Mr Stewart in his submissions spent some length arguing that these events could not constitute informal performance management as there was no record on the claimant’s personnel file, no targets set and would leave employees subject to the “whim” of their line manager as to whether they would receive a benefit designed to support them when ill. He took me through the relevant policies of the respondent to support his argument.[21]The “My performance” policy of the respondent sets out that “All managers need to ensure colleagues understand what level of performance is expected and provide the right training, support and guidance needed to achieve it. All colleagues have a personal responsibility to do their job to the required standard. Open and honest performance conversations should take place regularly. Where there are performance concerns, detailed notes should be made to document any conversations and kept in the colleague’s file. Before any formal action, it’s important that colleagues have help and support over a reasonable timescale to improve their performance.” The policy goes on to set out a formal procedure, but there is nothing setting out the requirements of the informal procedure though managers are asked to consider particular questions before managing a colleague’s performance formally, which includes questions about whether the colleague has been made aware of what was required and given a reasonable period to demonstrate improvement.[22]Ms Hughes’ evidence was that the informal stage was effectively coaching to help the employee achieve the necessary standard, and little at that stage was recorded to avoid “freaking out” the employee. In addition, in my view to adopt the course urged by Mr Stewart would mean that informal performance management would not be possible – as soon as matters start to be recorded on personnel files for example, a process starts to look more formal than informal. I bore in mind that all involved knew the challenges the claimant faced in turning around a difficult store. From September 2019 onwards in my judgment based on the accounts of the claimant and Mr Kirman, the claimant knew what level of performance was expected, particularly the “8 out of 10” goal, and there were open and honest conversation about this issue from August 2019 onwards. While I noted the reference to taking detailed notes in the policy, it was not clear if this related to formal performance processes (where such notes would be fundamental) or to an informal process (where they may be of little assistance). The overarching message of the policy was that managers should give employees help and support over a reasonable timescale before any formal action; the claimant had received additional support by his own account and was given another four weeks to improve in autumn 2019 – I consider the parties in this case had reached the informal performance management stage by October 2019 at the latest.[23]I considered the point raised by the claimant about his performance rating in August 2019. The ratings used by the respondent consisted two halves - the first half is the performance objective the second half is how that performance is achieved. Looking at page 77 of the hearing bundle a grade of 2.2 indicates that the employee meets most of the required standards says that “performance is broadly meeting expectations and the colleague is doing a good job: most objectives are delivered to the required standard and the colleague demonstrates ways of working most of the time.” The band above for those who are meeting all the expectations, something which the parties accept the claimant was not when he was reviewed in August 2019.[24]Mr Kerman’s comment recorded at the midyear review was “Ben has had a challenging 6 months and operationally has faced some challenges which now need to address. Ben needs to utilise the relationship with the PM to support him to drive performance forward and get to the root cause of the problems. Ben has had some good successes around safe and legal and the KPI’s are now more consistent. Ben needs to reflect on his own leadership and face into performance issues in order to improve the store scorecard and great shop standards.” In my judgment, this demonstrates that Mr Kirman’s evidence was correct about the meaning of this grade for the claimant – the claimant had more to do to address his performance standards. The issue was then followed up in the meetings of autumn 2019, where the claimant understood that unless matters improved in the next four weeks, he would be facing formal performance management.[25]The reasonable conclusion in light of the facts and evidence before me is that the claimant was being informally performance managed, and further went onto sick leave after reading the email from Mr Kirman of 6 November 2019 which was an indicator that matters may be about to become formal, but certainly shows that sufficient progress had not been made.[26]The Handbook and the claimant’s contract confirms sick pay is contractual but there are circumstances in which it can be withheld. The policy sets out examples and says that the list is not exhaustive but includes “if you begin a period of sick leave at the point when you are being investigated or disciplined under the disciplinary policy, if you are in your notice period or if you begin a period of leave during any informal or formal performance management.” Given that the claimant was being informally performance managed and accepts he read the email from Mr Kirman of 6 November 2019 before going on sick leave, I am satisfied that the claimant began a period of leave during informal performance management.[27]This finding does not though mean that the respondent had an absolute right to withhold the claimant’s sick pay. The legal principles, which were agreed with Counsel at the start of the hearing and set out above, make it clear that the employer must act rationally in making such a decision. The evidence of Ms Hughes does not greatly assist, though her evidence was that she agreed with the decision – it is the evidence of Mr Kirman, the decision maker, that is critical.[28]At the time Mr Kirman made his decision, he had limited information available to him – there was no medical evidence (though the claimant had said he was going to see his GP and had provided details about the current state of his mental health). Mr Kirman knew that informal performance management of the claimant was underway and the sick leave had commenced after his email of 6 November had been read (and the email was clear that Mr Kirman was unhappy with the claimant and the standards of his store as the photographic evidence had been attached). Mr Kirman’s oral evidence was “wanted to make decision on the facts”. While I was unpersuaded by Mr Kirman’s suggestion that the letter withdrawing sick pay was supportive (given its tone and the fact that the majority of the letter was about the withdrawal of sick pay, I find that the offer of a welfare meeting was a minor additional point, rather than the core of the letter), I could not find that his decision to withdraw sick pay on the basis of what he knew was irrational. The policy made it clear that sick pay could be withdrawn if the period of leave commenced in these circumstances, and there could hardly be a clearer example of informal performance leading to the taking of leave than the claimant reading Mr Kirman’s email of 6 November and then commencing sick leave. Mr Kirman’s letter sets out in detail the reasons why he decided to withhold sick pay and his position has remained consistent – he set out the mid-year review conclusions, the warning given that the claimant needed to improve within four weeks or go onto a formal performance plan, and his email of 6 November 2019 appeared on the face of it to trigger the sick leave.[29]Mr Kirman made the point that the decision could be reversed if evidence from the claimant was provided, and it was for this reason that an early welfare meeting was offered. His letter of 8 November 2019 did not say this in a clear way – all it says is “If the circumstances that have led to your sick pay being withheld change , then we will consider reinstating your sick pay.” That said, the letter demonstrates that the decision could be reversed. The claimant in his response of 10 November said he would provide further information and disputed that his sick leave was connected to Mr Kirman’s email of 6 November, but due to work related stress/anxiety. The rest of his response disputed in detail the decision to withhold sick pay. The sick note that followed gave no detail of the claimant’s illness and the claimant resigned shortly thereafter without attending the welfare meeting. The failure to provide medical evidence, attend the welfare meeting, the lack of explanation as to how the receipt of the email of 6 November did not lead to the sick leave (given what the claimant had already told Ms Hughes and what Mr Kirman knew), and the swift resignation meant that it was rational for Mr Kirman to not change his mind about the withholding of sick pay in my view, given the reasons he made the decision in the first place.[30]There was some discussion in submissions about whether this was an anticipatory breach case as the payroll was processed later in the month – the case as put by the claimant in his ET1 did not say this, but the respondent accepted it that this was an anticipatory breach case in its written submissions. Given my findings above, I am satisfied that the decision to withhold sick pay was made and was anticipatory until put in effect, but the decision was potentially reversible, which is a relevant fact. However, as the claimant did not provide further evidence or engage with the process, but resigned, I am persuaded that he “jumped the gun” as Mr Singer submits on behalf of the respondent. In any event, my answer to the question as to whether the respondent fundamentally breached the contract in a way that goes to the root or the heart of the contract is that it did not. It was entitled contractually to withdraw the sick pay and did so for rational reasons using a rational process – I cannot find that the respondent acted unreasonably or in a capricious manner. This finding means that the claim for constructive unfair dismissal fails.[31]I further find that the actions of the respondent in deciding to withhold the claimant’s sick pay is not a breach of contract in any way, let alone a fundamental breach. In addition, his decision to resign (when he was not constructively dismissed) means that the claimant is not contractually entitled to notice pay. This means that the claim for breach of contract fails.[32]I would like to conclude by thanking both Counsel for their professional and flexible approach through the proceedings, but I thank Mr Stewart in particular who appeared on the claimant’s behalf pro bono on two different days and provided detailed written submissions as directed. Given the current difficult situation faced by all due to the pandemic, Mr Stewart’s commitment to ensuring individuals in need of legal representation is impressive and assisted both Mr Singer and myself in undertaking our respective roles. The claimant could not have been better represented.