Mr P Garson v Natural Resources Wales: 1600302/2019
JUDGMENT
The Claimant’s claim for unfair dismissal does not succeed and the claim is dismissed.REASONS
[1]The ET1 was presented on 11 March 2019. The Claimant brought a claim of constructive unfair dismissal. There was an agreed bundle of documents before the Tribunal which ran to 363 pages (“the core bundle”). There was also a supplementary bundle largely containing reports, accounts and records of the Public Accounts Committee (“PAC”) proceedings which ran to 361 pages (“the supplementary bundle”). I heard witness evidence from the Claimant, and a Ms R Chamberlain on behalf of the Claimant. Witnesses for the Respondent were Mr Tim Jones, former Executive Director of Operations and the Claimant’s Line Manager, Mr K Ingram, Executive Director for Finance and Corporate Services, Ms C Pillman, Chief Executive Case Number: 1600302/2019 2 and Accounting Officer, and Sir David Henshaw, Interim Chair of Respondents Board.Issues
[2]The claim was one of constructive dismissal with the Claimant relying on a breach of the implied term of trust and confidence. The parties agreed a list of issues which were as follows(a) between March 2017 and December 2018 the Claimant was required to perform an excessively high workload and undertake an increasing amount of additional duties without sufficient management support,(b) between August 2018 and December 2018 the Respondent mis-managed the evaluation of Timber Marketing by consultants Grant Thornton,(c) [the last straw] at a meeting on 17 December 2018 through its Chair and Chief Executive stated it had no confidence in the Claimant, and resolved to take actions that would undermine the Claimant’s credibility to undertake a senior leadership role within the Respondent.[3]I make the following findings of fact on the balance of probability.[4]The Respondent is a Welsh Government sponsored body employing 1,900 staff across Wales. It was formed in April 2013 taking over the functions of the Countryside Council for Wales, Forestry Commission Wales and the Environment Agency in Wales as well as certain Welsh Government functions.[5]The Claimant commenced employment with the Forestry Commission in December 1988 as a graduate forester. The Claimant is a Chartered Professional Forester with experience of working in the public sector for almost 30 years. He was a member of the Forestry Commission Wales Management Board from 2006 and in 2007 he was responsible for the management of the Welsh public forest estate until the formation of the Respondent in April 2013.[6]Following the formation of the Respondent a change programme was run to ‘mix up ‘senior management responsibilities in order to foster an integrated organisation. The Claimant became responsible for land management and flood asset maintenance in the South Wales Directorate. He also provided the co-ordination between directorates on some forestry issues. This was formalised in 2018 when the role of Head of Service for Land Management was added to his responsibilities.[7]The responsibility for commercial aspects of land management including timber production and contracts were formerly managed by the Head of Enterprise in the National Services Directorate, Mr Edwell. Case Number: 1600302/2019 3[8]Mr Edwell presided over 8 long term timber contracts (“LTC’s”) awarded by the Respondent in 2014. It was a condition of the contracts that the contractor was obliged to invest in their sawmills in order to increase processing capacity for diseased larch timber. These investments were due to be completed in March 2016. In March 2016 the Claimant sought to persuade Mr Edwell to refrain from extending the contract with the specific sawmill as they had not, as per the contractual obligation, invested in the increasing processing capacity. It was anticipated this would have enabled the Respondent to use an exit clause to terminate the contracts. The Claimant pointed out to Mr Edwell that the contract was not serving the Respondent’s purpose and was not giving them value for money compared to open market sales, whereas the current situation was suiting the contractor very well given they were receiving the larger volume at a reduced price. Notwithstanding this advice, Mr Edwell with the support of the then CEO unconditionally extended the deadline by 12 months.[9]Mr Edwell departed from the Respondent in December 2016.[10]On 17 January 2017 the Claimant wrote to Mr Jones and the then CEO Mr Roberts on 17 January 2017 to warn them that he understood there had been significant further slippage in respect of the new line (to process diseased larch timber) which should have been up and running by the end of March 2016. (This was the line that they were given an extension for the previous year for 12 months to make the investment). The Claimant warned Mr Jones and Mr Roberts that in his view they needed to avoid giving any indication of a further extension before they had reviewed the situation, risks and options. This was because justification for the award of the contracts in the first place had been based on the investment taking place in order to increase capacity in the market to process infected larch. Since the initial award several things had happened including the pace of the disease slowing so they no longer needed to increase the larch programme and the general market for timber had improved and the demand for larch had increased. Furthermore the open market price for timber had risen much faster than the formula in the LTC’s and therefore the contracts now offered poor value for money.[11]The Claimant offered to take stock of the situation with assistance from the timber team and prepare a brief. This offer was taken up by Mr Roberts and him and the Claimant met the timber contractor on 16 February 2017. Mr Roberts forwarded that brief to the appropriate contact within the Welsh Government on the same day. The purpose of the meeting with the contractor was to establish how the contractor was proceeding with the investments in the sawmill. The contractual position was said to be clear as the contractor was required to have constructed and operated a new saw line by 31 March 2016. The Tribunal was told that the contract indicated that Case Number: 1600302/2019 4 failure to do so would cause the contracts to be terminated. This briefing was drafted by the Claimant.[12]The Claimant subsequently drafted an options paper to be shared with the Welsh Government and sent this to Mr Roberts. Mr Roberts indicated in an email on 20 February 2017 that he did not think this was a matter for the Welsh Government and gave a mandate to the Claimant and his Line Manager, Mr Jones to achieve an orderly termination with the timber contractor. The Claimant agreed to this course of action but reminded Mr Roberts and Mr Jones that there had previously been criticism in not seeking Welsh Government opinion on the original award of the contracts and felt that it would be advisable to make them aware of the broader options that they were considering in the form of a briefing in order that they were not later accused of making another potentially controversial decision without referring it to the Welsh Government. Mr Roberts replied that he was happy for the Claimant to work on a briefing for the Welsh Government but he felt that they needed to be clear they were not seeking their approval at that stage.[13]Subsequently the Claimant drafted a letter to the timber contractor dated 15 March 2017. This stated that the new saw line which was central to the submission of the contract had not been built and set out the Respondent’s legal advice. A conclusion and way forward was proposed to bring the contracts to a close and remarket the equivalent volume of timber in accordance with the directions set out in the Respondent’s timber marketing plan. Following exchange of legal letters the contractor eventually conceded the position and to enter into 59 transitional contracts with the Respondent. External legal advice was taken at the time which included reference to possible state aid issues relating to the transitional contracts. The Claimant at that point in time had not received any training on state aid. The Claimant’s view was that the transitional contracts were absolutely critical because the Respondent produces 60% of the timber into the supply chain in Wales. At that time around 30% of the Respondent’s supply came through these particular contracts operated by the timber contractor. Immediate cessation of supplies flowing from the long term contracts would have impacted on many timber processes and contractors hence the need for transitional volume. The long term contracts had to close on Friday 31 March 2017 and on a very tight deadline the Respondent agreed the transitional arrangements with the timber contractor. The Claimant’s role and responsibilities[14]In 2016 the Respondent had been considering a restructure of the senior management team and reducing the number of directorates. At this time the Claimant was still employed as Head of Operational Services South. The restructure led to a new role being created which was Head of Case Number: 1600302/2019 5 Commercial Operations which replaced the previous Head of Enterprise. The Claimant was appointed to this post as of 1 March 2017 after expressing an interest in that role.[15]This was a very senior role within the Respondent’s organisation. It encompassed the following responsibilities.• Timber marketing and business support (18 staff timber income £17 million);• Timber harvesting and silvicultural operations (50 staff with £8 million expenditure);• Forest civil engineering (20 staff with £3 million expenditure);• Oversight of land agency services (6 staff with around £1 million income);• Renewable energy development (23 staff with a growing income stream);• Capital projects delivery (12 staff with a capital budget of £15 – 20 million) and;• Laboratory analytical services team (35 staff based in a laboratory in Swansea) with an annual budget of £2 million.[16]Each team (apart from the harvesting and marketing team who had lost their manager in October 2016 and had not been replaced) was headed up by a manager who was responsible for delivering team outcomes. Four of the managers were downgraded to team leaders under a job evaluation exercise which affected morale generally amongst staff. The Claimant was not expected to actually manage all of these staff but he was responsible to coordinate management between teams.[17]Essentially the role had two combined distinct managerial functions one of which was the management and sustainability of the Respondent’s estate and the other was the maximisation of the commercial value of the Respondents timber sales.[18]Around October 2016 the Respondent had decided they needed to replace the existing IT system that was used by the Forestry Commission to manage timber sales and contract administration (called “TMP”). There were issues with the development and functionality of this system nonetheless it went live on 1 April 2017. This placed pressure on the timber and marketing and supply teams. Mr Jones accepted that staff continually raised that the new system was not as good as the old one. Case Number: 1600302/2019 6 Excessively high workload and increase of duties without sufficient management support Staff structure pressures[19]The Claimant’s evidence was that there was an unreasonable reduction/failure to replace staff which led to increased pressure on the Claimant.[20]It was common ground that the Respondent’s Forest Operations Manager, Mr Hugh Jones had been granted early retirement in October 2016 but was not replaced. Initially this was because he had been permitted to voluntarily retire. Mr Jones accepted this when giving evidence. Later in 2017 / early 2018 the Claimant did receive approval for his business case to replace Mr Jones but this did not transpire due to the restructure and splitting of the Claimant’s role in May 2018 (see paragraph 34 below).[21]The Claimant’s Principal Surveyor was absent on leave for 9 months from July 2017. Another Land Agent, Mr Evans was appointed to stand in but after a few months he went off sick and had to stand down. The Laboratory Manager was absent from work from January 2018 and only a part time (0.4 FTE) replacement was provided for him. Furthermore the Respondent was seeking to reduce the number of forestry roles from 125 in 2017 to 103 in 2018/19.[22]There had also been some difficulty with staff morale and capacity. The had been a job evaluation process which led to a regrading of all posts within the Respondent. Enterprise plan[23]One of the Claimant’s earliest priorities on appointment was to develop an enterprise plan. This was required by the Welsh Government and was one year overdue. The Claimant worked on this plan extensively and it was approved by the Board in July 2017. Fatality[24]In August 2017 there was a fatal accident in a harvesting operation in which a young forestry contractor was killed by a falling tree. The Claimant was responsible for leading the Respondent’s response to this accident until it was taken over by head of Legal in December 2017. Forestry Safety Review Case Number: 1600302/2019 7[25]The Claimant also was responsible for heading up the forestry safety review although he did have some support of a colleague, Richard Ninnes. Mr Ninnes did not have a background in forestry and found it difficult to deliver updates, for example, he had been unable to answer some questions at a Health and Safety briefing and he also did not have experience in timber sales and safety. Mr Ninnes was a helpful Secretariat and had been of support to the Claimant but it was the Claimant that was required to lead the project. Forest certification[26]The Claimant was also involved in another situation shortly after his appointment of a very urgent nature relating to forest certification. Following an audit in October 2017 the Respondent faced the prospect of loss of certification which would have been very damaging both financially and reputationally as without it the Respondent would have been in breach of £10 million of timber contracts and would not have been able to access most timber markets. The Claimant worked alongside Miss Chamberlain on a project to ensure that they did not lose the certification. The certification provides independent verification via audits that the timber from the Respondent’s managed woodlands had come from a sustainable source as demanded by most timber processing sectors in Wales. The background was that during 2016 the auditing authority UK Woodland Assurance Standards (UK WAS) had raised two corrective actions (this was before the Claimant’s appointment) around first aid kits and certificates for competencies as contractors. This had been the responsibility of Mr Edwell.[27]Miss Chamberlain gave evidence that the Claimant and herself met the auditors in October 2017 and the auditor explained that he required certain matters being put in place before the final audit closing on 28 November 2017. This included four major corrective action requests and if they were not complied with the Respondent’s certification would be suspended and they would be unable to sell timber. Following that meeting Miss Chamberlain and the Claimant worked to develop an action plan to close out the required major corrective action requests. The Claimant led on closing three of the four requests and the auditors were satisfied that the procedures that the Claimant had put in place and closed the actions. This involved ongoing work in 2018 with further actions required by the Claimant with the support of Miss Chamberlain. Swansea laboratory[28]Another matter which required management intervention by the Claimant was problems with the Swansea laboratory. In December 2017 the Claimant was required to instigate a formal health and safety investigation to support Case Number: 1600302/2019 8 another investigation and put in temporary management arrangements. The Claimant requested if management of the laboratory could be transferred to the South Wales Directorate because it was geographical location in Swansea but Mr Jones refused this request.[29]In July 2017 Mr Jones had worked with the Claimant to develop his performance and development plan (“PDP”) which would include his objectives for the forthcoming year. The Tribunal had sight of the PDP which included the Claimant’s later comments at the end of the year. Mr Jones wanted the Claimant to be placed on a rota operated by the Respondent called the DSM rota. This was a form of instant response rota operated by the Respondent to emergency situations for example flooding. Mr Jones was of the view the Claimant was too focussed on forestry and needed to develop a deeper understanding of other areas of the Respondent’s work. The Claimant raised an objection about this to the directors including Mr Jones on 16 February 2018. He outlined in an email he had practical concerns namely he had not received any training in “instant response”, it was high risk and also his workload. The Claimant stated as follows: “I am so stretched at the moment and have been doing a huge amount of out of hours work. This last year has affected my wellbeing and ability to sleep as well as my ability to meet the expectations of progress needed on commercial development, health and safety and address certification risks.”[30]He asked not to be part of the rota until his proposal to recruit a timber manager was in place and advised that if they insisted on him going on the rota that they were expecting too much of him and being complacent about the other risks to the Respondent and his own wellbeing.[31]Despite these concerns the Claimant was required to start on the rota from May 2018.[32]In Mr Jones’s mid-year comments on his review in October 2018 he acknowledged that the Claimant had worked hard to ensure the Grant Thornton review (see below) had been undertaken with participation and cooperation of his team and it meant at times he had had to put in very long hours and Mr Jones recognised this had had a “significant impact on his wellbeing and family life at times”. Appointment of Claire Pillman as CEO[33]Ms Pillman commenced her appointment as CEO following the departure of Mr Roberts in October 2017. She commenced on 26 February 2018.[34]One of the objectives for Ms Pillman was to deliver a full restructure of the entire organisation. As part of this she reviewed the structure of the senior Case Number: 1600302/2019 9 leadership team in full consultation with the members of that team. One of the areas of focus the Respondent wanted to undertake was to increase their commercial and business development opportunities. Ms Pillman reviewed the Claimant’s existing role encompassing all of the Respondent’s commercial responsibilities as well as stewardship of the estate and she concluded that having a single person covering such a broad remit was not sensible. She accepts that she made a comment that the Claimant’s role could be said to be “set up to fail”.[35]Ms Pillman therefore proposed to split the Claimant’s role into two which would be a new Head of Land Stewardship which the Claimant would perform and a new role of Head of Commercial which would be recruited into. This was announced at a briefing in May 2018 with no prior warning to the Claimant.[36]The Claimant was unhappy with the way the announcement was handled and also the proposed new structure of the roles. On 8 May 2018 he emailed Mr Jones and stated as follows “Reducing the pressure on me. The pressure that I have been under is not so much due to the breadth of my role (I have undertaken roles with a wider remit previously) but by the lack of management tier capacity this past year. This goes beyond the lack of Forest Operations Manager to the absence of our Principal Surveyor for 9 months while she was on leave and ongoing issues at the laboratory. In fact the only areas where I have had an MT in place has been on energy development projects delivery. Had I had more cover at MT I would have been better placed to deal with forestry safety issues, certification audits and WAOLTC issues. In these circumstances it is not surprising it has been an exhausting period”[37]In an email dated 14 May 2018 to Mr Jones he complained the way the announcement had taken place had never made him feel so under-valued. He went onto say “had there been genuine concern about my workload, I feel that I would have been consulted about the measures that could have been taken and would have been able to make some suggestion”. He also wanted the new role to be based on commercial delivery with the Claimant retaining operational delivery. Attached to the email was a proposal drafted by the Claimant for roles he believed should remain with him and those that could be dealt with by the new Head of Commercial (Development). The Claimant proposed retaining timber marketing sales planning, contract awards and negotiation amongst other aspects of the role the Respondent was proposing would sit under the new Head of Commercial.[38]Mr Jones responded to this email on 21 May 2018. He stated that without the Claimant’s “strenuous and unstinting work” in his role of Head of Commercial Operations the Respondent would be in a “much worse place” that they are now and acknowledged that the role had been made challenging, even more challenging by losses in the management tier for his part of the directorate. Case Number: 1600302/2019 10[39]The recruitment process for the new Head of Commercial role commenced on completion of consultation period with the Claimant and the intention was that the new role would come into effect on 1 January 2019. However the post was not advertised until December 2018 and therefore the Claimant would have been aware it was likely to be at least 3 – 6 months before he would be able to hand over those areas of responsibility being devolved to that post. The new Head of Commercial was appointed on 1 June 2019. Third Qualification of the Respondents accounts by the Auditor General[40]Prior to the Claimant’s appointment in his role of Head of Commercial Operations, the Auditor General (“AG”) had already qualified his regulatory opinion on the Respondent’s 2015/2016 accounts. The accounts had been qualified because the agreement of the 8 LTC’s with the sawmill operator did not comply with the framework of authority under which the Respondent was operating and the AG for Wales had been unable to satisfy himself that the decision to agree those contracts was lawful and in accordance with state aid rules. As set out above this was under Mr Edwell’s management and not the Claimant’s.[41]The background to third qualification is as follows. In the summer of 2016 the Respondent became aware that the AG for Wales was likely to qualify his regulatory opinion of the Respondent’s 2015/16 accounts on the basis of the letting of the 8 long term sales timber contracts. Mr Roberts and Mr Ingram subsequently attended the PAC to be scrutinised on the situation. This was in March 2017 and I had sight of the PAC report, scrutiny and annual report which was dated June 2017. In summary this found that the Auditor General for Wales had qualified his regulatory opinion on the Respondent’s financial statements in respect of its award of timber sales contracts to the sawmill operator in 2014. This was described as an unusual and rare occurrence. The PAC found the AG’s findings to be most concerning in that he had found the transactions relating to the contracts irregular, contentious and repercussive. He also raised concerns as to whether there was uncertainty around whether the Respondent complied with principles of public law and state aid rules. The report was highly critical of the Respondent and found them to be complacent in a number of areas in particular stating it was completely unacceptable they had not referred the decision to award the contracts in question to the Welsh Government, did not test the market and did not record decisions actions they deemed to be novel.[42]Mr Roberts and Mr Ingram were summonsed again to the PAC for a follow up meeting on 22 May 2017. Case Number: 1600302/2019 11[43]An action plan was subsequently drawn up in response to these qualifications and sent to the PAC by Mr Roberts on 5 July 2017.[44]In July 2017 the AGW qualified his regulatory opinion for a second time on the Respondents 2016/17 accounts for the same reasons. He had also observed that their contract had been unconditionally extended for 12 months from March 2016 even though the sawmill Operator had failed to construct the additional sawmill line (as had been flagged by the Claimant see paragraph 8 above).[45]In July 2018 Mr Ingram was notified that the transitional arrangements that had been put in place by the Claimant to bring to an end the 8 long term timber contracts in March 2017 would result in a third qualification of the Respondents accounts. The reasons in summary were as follows:(a) the Respondent had departed from its own policy set out in its timber marketing plan as they did not open the market for timber and were unable to demonstrate good reason to depart from the stated policy(b) the rationale for determining the volume of timber to be contracted under the transitional arrangements was not supported by the available contemporaneous documentation(c) the Respondent had not referred novel, contentious or repercussive proposals to the Welsh Government which the AGW considered the transitional contracts to fall within(d) some of the contracts were not authorised in accordance with proper delegation and powers(e) the AGW felt that the Respondent had not taken into account the market price of timber when the transitional contracts were determined and(f) there was considered to be failure to follow state aid rules. The PAC immediately made it clear that they would be calling Ms Pillman to a meeting on 24 September 2018 to answer questions. The Chair of the Board, Ms McCree, resigned following a third qualification of the Respondent’s accounts.[46]Ms Pillman worked closely with the Claimant, Mr Ingram and Mr Jones in preparation for this appearance before the PAC. The PAC had determined they wanted someone with forestry expertise to attend and after detailed discussions, Ms Pillman and Mr Jones asked the Claimant whether he would be prepared to attend. Ms Pillman made it clear to the Claimant that the PAC might be critical of him and the hearing could be exceptionally difficult for him personally, the Claimant nonetheless agreed that he wished to explain his decision making process in respect of the letting of the transitional contracts.[47]The Claimant and Ms Pillman appeared at the PAC hearing on 24 September 2018. It was common ground that they both found it a very challenging and hostile experience. Following that meeting the Claimant was contacted by a Ms Balmar who was Chair of the Audit and Risk Committee to compliment them on their performance at the committee meeting. The Claimant replied wanting to clarify some matters with Ms Case Number: 1600302/2019 12 Balmar, in particular that he had not thought it appropriate to inform the PAC that he had stepped into the role only very recently and also that he had taken a conscious decision not to mention the IT-system issues which he described as a “perfect storm”. The Claimant recognised that as a consequence of him not mentioning these matters he felt that the PAC concluded that the irregularities were a result of ineptitude or corruption on his part and that had impacted on his professional reputation within the industry and further undermined confidence within the Respondent on forestry elements.[48]At the commencement of the meeting Ms Pillman had made an opening statement accepting that they fully accepted the findings of the AG and explained that the transitional contracts had been let in difficult circumstances with the best of intentions but nevertheless accepted there were serious errors and irregularities in the ways they had been put in place. These were in summary as follows:• The transitional contracts were awarded without seeking competition from the market which was contrary to the Respondent’s policy;• The decision-making process had not been properly documented;• The decision should have been referred to the Welsh Government.[49]At the end of August 2018 Ms Pillman had taken the decision to appoint independent consultants Grant Thornton to conduct a thorough review of the timber and marketing operations. It was felt there was a need to bring in external consultants given the now third qualification of the Respondent’s accounts. Ms Pillman put in place a ‘care first’ procedure which provided a safe space for staff to talk about challenges that they had faced and also staff were reassured that they could talk to Grant Thornton on a confidential basis.[50]The scope of the review to Grant Thornton did not set out what the actual scope of the review was intended to be. There were no instructions to Grant Thornton in the document I saw that set out what the scope of the review was. There was reference to a formal letter of engagement but this did not cast any light on what Grant Thornton had been instructed to do. The Claimant raised this with the Respondent subsequently on 19 December 2018 pointing out that the scoping document did not state the purpose of the Grant Thornton review or what sort of report they wanted them to provide and requested terms of reference. It transpired that there were no written terms of reference. Case Number: 1600302/2019 13[51]There was an oversight group which included Ms Pillman, Mr Jones and Mr Ingram but not the Claimant. The role of the oversight group was to report back to the Board.[52]In November 2018 the PAC published a scrutiny of the Respondent’s annual report and accounts. The report was again highly critical of the Respondent. The committee described the decision to enter into the transitional arrangements as ‘bewildering and difficult to comprehend’ as to why the Respondent would reward an organisation that had failed to comply with contractual commitments [in reference to the failure to construct the additional sawmill line].[53]Despite this criticism there was no evidence at that time that anyone within the Respondent sought to blame or hold the Claimant to account for the PAC findings. Mr Jones had already told the Claimant this directly in an email dated 21 May 2018 in which he informed the Claimant that the restructure in no way reflected on him personally (the same email where he stated the Claimant had done strenuous and unstinting work).[54]Following the Claimant’s appearance at the PAC meeting he had accepted that the Respondent wanted him to take on the role of Head of Business for Land Stewardship. He received confirmation of his appointment on 4 October 2018 which indicated a start date of 1 January 2019. There was evidently going to be a transitional period while recruitment took place for the vacant posts in the structure including the new Head of Commercial Operations. The Grant Thornton Review[55]The Claimant was not directly involved in the Grant Thornton review although he prepared a briefing document for them. He was clearly concerned about the terms of reference and spoke to Mr Ingram about it and as referenced above later requested a formal copy of the scoping paper. The Claimant’s evidence which I accepted was that the consultants working on the audit emailed significant requests for data which the Claimant provided but which took up a significant amount of the Claimant’s time as well as time from his staff, sometimes days, to manually extract information from the IT system.[56]On 6 December 2018 Grant Thornton presented a draft review of their initial findings. This was a summary document which provided there was a need to significantly improve contract governance arrangements as a matter of urgency. In respect of authorisation the review asserted that controls to ensure financial scheme delegation limits are adhered to were not in place and limits were being applied to the net prices agreed after deductions for working costs. There were no automatic alerts in the IT system to monitor Case Number: 1600302/2019 14 contract volume and a lack of clarity amongst sales and harvesting about whose role it was to monitor contracts along with management oversight. The Government documentation was out of date and there were not contract addendums being created.[57]The Claimant relied upon this particular emerging finding (failure to create contract addendums) as an example of why Grant Thornton did not have an understanding of forestry issues which had led to an incorrect finding. The Claimant’s evidence was that addendums are not created in contracts for clearing timber. It can be very difficult to quantify the likely amount of timber in a particular area. If the contract specified a certain volume for example 2,000 tonnes there would be no incentive for the contractor to clear the remaining area which was of the benefits for the Respondent. They would simply take the high-volume timber and leave the remaining areas which required clearing.[58]Ms Pillman accepted under cross examination that Grant Thornton had been incorrect about this emerging finding but they had correctly understood the position in their final report.[59]Further emerging findings were as follows. Contract terms were not robust and legal advice obtained previously had not been put in place of particular note was the standing sales plus contracts. These were sales contracts with schedules of additional works to be carried out. The review stated there was insufficient documentation to demonstrate audit trails. In respect of value for money there was said to be no documentation to evidence standing sales plus contracts representing best value. The review acknowledged concern over the level of resources in forestry which acknowledged there had been a loss of line of defence level expertise when the role of Hugh Jones was removed in 2017.[60]Following this report there was a meeting of the Audit and Risk Assurance Committee during which Grant Thornton presented some of their emerging findings. This was attended by Ms Balmar, Ms Pillman, Mr Jones, Mr Ingram and the Claimant amongst others. Ms Pillman described herself as shocked and disappointed to hear that so many lessons that they had said they were learning were not being addressed and there was a sense that many of the problems were deep rooted complex and serious.[61]The Claimant described Grant Thornton’s report as being in their interest to present a stark picture and use it as a chance to pitch for further work. He also complained in his statement that he was not given the opportunity to present the plan for how they should take forward and respond to the findings. The Claimant’s evidence was that allowing Grant Thornton’s initial and untested findings to emerge at a meeting in this way without any context and giving him the opportunity to explain the actions he had taken and how Case Number: 1600302/2019 15 to organise a response gave the impression of a passive and unresponsive management. He believed it destroyed his credibility in the eyes of the committee and the influential Welsh audit office staff present.[62]After this meeting Mr Jones took some steps to reduce the Claimant’s workload so that he could work on an action plan. He had secured agreement to transfer the management of the laboratory service to the South Wales Operations Directorate and for line management of the Capital Project Delivery Team to transfer there also, but the Claimant described this as too little too late.[63]On 11 December 2018 the Claimant was requested to attend a meeting with Ms Pillman, Mr Jones and Mr Ingram. It was common ground that this was a very emotional meeting and Ms Pillman told all three individuals that she was struggling to have confidence that they could resolve these problems given that so many of the issues such as lack of processes and documentation had been previously flagged and not resolved. The Claimant’s evidence was that Ms Pillman was angry at this meeting and he had taken note of the meeting also in which he records the word “anger”. I find that it is likely Ms Pillman was angry at this meeting but not with the Claimant directly and in the context of delivering a message that needed to be understood by the individuals in attendance. It was agreed to develop an action plan which the Claimant had already started working on. Ms Pillman said in her statement that she did not feel the sense of urgency and seriousness of the problem was landing with the Claimant although this was not expressed to him at the time. Ms Pillman accepts that there was discussion about reducing the Claimant’s workload so as to enable him to concentrate on the emerging findings of the Grant Thornton review. Appointment of Sir David Henshaw[64]On 1 November 2018 Sir David Henshaw was appointed as Interim Chair of the Respondent Board effectively as a “trouble shooter”.[65]On 12 December 2018 Mr Jones joined the first part of the Team Leader meeting between the Claimant and his staff in Aberystwyth. The Claimant says that Mr Jones undermined him by clumsily reiterating the CEO’s anger and stated ‘we needed to make some dramatic improvements or we would all be out of a job’ or words to that effect. This alarmed the staff very much and they were very taken aback to be threatened and blamed for the problems which they felt they had warned would arise when the ICT systems changed and Mr Jones was given an early retirement package and was not replaced. After that meeting the Claimant sent an email to Ms Pillman, Mr Ingram and Mr Jones. He referred to Mr Jones’s attendance and that he had set the context in terms of the seriousness of the situation Case Number: 1600302/2019 16 and the scrutiny they would be under. He stated that the team got the message about the level of anger and frustration felt about this at senior level. He said that the team recognised improvement was needed but expressed some anger and frustration of their own about what had led to the standards falling and went on to list matters that the Claimant believed had fed into the failings. He ended the email by asking if we could be careful about how anger and frustration could be perceived and build on a ‘can do’ positive atmosphere that came out of the meeting. The last straw meeting[66]On 17 December 2018 Ms Pillman met with Sir David along with Mr Ingram, Mr Jones and the Claimant. This again was a very difficult meeting for all involved. The Claimant asserted that the criticism of Sir David at this meeting was very much directed at him and whilst Sir David told all three individuals he had no confidence in them, he felt that the comments were primarily related to him. Sir David made what the Claimant regarded as derogatory comments about the forest industry having a poor compliance culture and that there needed to be a root and branch change in the Respondent’s relationship with the timber industry. Sir David informed everyone that they would be bringing in a Senior Financial Consultant to do whatever it took to sort the matter out.[67]Ms Pillman accepted that Sir David used the words “poor compliance” and “root and branch change” in approaching the Respondent’s relationship with the timber industry but disputed that they were directed at the Claimant more at all of them. Ms Pillman described Sir David as a very straight talker. She accepted that Sir David had said ‘throw money at the problem’ in the context if there was a need for additional resources then they would try and make it happen. Ms Pillman accepted that whilst it was a very tough meeting with them all feeling a sense of accountability and responsibility for what had happened there was no bad language or shouting used.[68]Ms Pillman also accepted that whilst she acknowledged the Claimant, Mr Jones and Mr Ingram had done work to try and address the issues she did not have confidence it was enough and they needed to do more.[69]The Tribunal heard evidence from Sir David about this meeting. He accepted that he may have made comments such as “deeply disappointing”, “pitiful” and “very poor performance” but they were referring to the Respondent as a whole and not directly at the Claimant. He explained he is direct in these situations it being his role to sort out problems and turn out organisations around. He is accountable to Welsh Ministers. The Claimant did not agree with all of the issues pointed out by the Grant Thornton report. Sir David felt he had the choice of believing the Claimant’s Case Number: 1600302/2019 17 assurances that ‘everything was fine’ or relying on the work of independent auditors. He chose to rely on the latter.[70]The Claimant also considered that the conduct of Ms Pillman during this meeting contributed to the last straw. He described her behaviour as even worse, wholeheartedly endorsing the views and comments of Sir David and not in any way defending the Claimant despite having worked with him closely enough during the year to know how hard he had worked to resolve the wide ranging problems which were not of his making. He described Ms Pillman as ‘turning on him’ and expressing no confidence which destroyed their working relationship and trust and confidence.[71]A decision had been taken to appoint Victoria Rose Piper, Head of Procurement to oversee the project to lead the work needed to address the issues raised by Grant Thornton. Prior to the meeting the Claimant was aware of this and had met with Ms Piper. There was also reference in the minutes to a possible lead external consultant being appointed.[72]The Claimant was very distressed about the meeting and was visited at home by his colleague Ruth Jenkins who sought to dissuade him from resigning.[73]Following the meeting Mr Jones sent an email to the Head of HR in which he stated that Ms Pillman had said a consultant was being brought in because she had no confidence in our [Peter, Kevin and me] to sort out the issues around the timber sales and marketing team and their processes.[74]On 19 December 2018 the Claimant emailed Mr Jones and Mr Ingram as follows: “Tim, Kevin, I think you need to be aware that given the accumulated effect of the last year I found Monday’s session in Buckley was just about the last straw (I’m sure it didn’t feel good to you either). The messages were very clear, calculated and cannot be unsaid. It has made me question how I can continue in any sort of leadership role in NRW given what has passed, what lies ahead and the attitude towards forestry at the highest level in the organisation.” The Claimant’s evidence was he was humiliated to receive the unjustified criticism being reprimanded in front of other employees and it was symptomatic of a blame culture and it felt like the last straw.[75]The Claimant concluded the use of a consultant would signal a lack of confidence in him, remove authority and credibility to make his position intolerable and untenable and decided that he would resign. On 20 December 2018 at 9.15pm Mr Jones emailed Ms Pillman to say he had just come off the phone to the Claimant and that he would be receiving his written resignation letter tomorrow. Mr Jones goes on to say that the Claimant was ‘deeply damaged by recent events and has worked extreme hours over the last year. This has had a detrimental effect on his family and his personal health and he had had a very great deal of soul searching made Case Number: 1600302/2019 18 the decision he could no longer do this’. He went on to say that he was personally very saddened and that the Claimant had given his all to the Respondent, gone beyond exhaustion and led his team part of way out of the extremely dark place his predecessor had left them in. Mr Jones sought to explain in his evidence that email was sent in the context of emotions running very high at that time.[76]The Claimant subsequently tendered his letter of resignation on 21 December 2019, it was emailed to Mr Jones at 8.48am. The Claimant resigned with immediate effect. He set out he had no option but to resign in light of recent experiences regarding a breach of trust and confidence and the last straw doctrine. He cited that the Respondent had failed in a duty of care by the way it had unfairly placed increasing pressures on him during the period in the role and that the response to his expressions of concern had been wholly inadequate. He said that the increasingly long hours he had had to work had had a severely detrimental effect on his wellbeing and availability to take part in family life. He cited that more recently he had been undermined by the way the Grant Thornton review had been managed and very let down that the initial response from the highest level of the organisation was to blame staff who had participated in the review not explore the underlying causes of the problems or properly acknowledge the actions that had been taken to address the PAC and WAO findings. He cited the last straw was the meeting on 17 December where there was a lack of confidence expressed in him and a decision to bring in the high level consultant.The Law
[77]The relevant law is contained in Section 95 (1) c) ERA 1996 which sets out circumstances in which the Claimant will be dismissed if the employee terminates the contract.[78]Following Western Excavating (ECC) v Sharp [1978] IRLR 27, the employee must establish:• that there was a fundamental breach of contract by the employer;• that the employer's breach caused the Claimant to resign;• the employee must not delay too long before resigning or he will have affirmed the breach and lose the right to be discharged from the contract.[79]In Malik & Mahmud v Bank of Credit & Commerce International SA [1997] 3 W.L.R 95 the implied term of mutual trust and confidence was held to be as follows: ''The employer shall not without reasonable and proper cause conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee.'' Case Number: 1600302/2019 19 Conclusions Between March 2017 and December 2018 the Claimant was required to perform an excessively high workload and undertake an increasing amount of additional duties without sufficient management support.Conclusions
[80]It was clear from the evidence before me that the Claimant had been under significant and sustained pressure to work on a number of critical matters following his appointment in March 2017 namely negotiating the transitional timber contracts, the enterprise plan, the response to the fatality, forest certification issues and the forestry safety review. The Claimant was rightly commended and recognised for this commitment and achievements by Mr Jones in his PDP.[81]The Claimant raised concerns regarding his workload and the impact upon him in two emails on 16 February 2018 (see paragraph 29) and 8 May 2018 (see paragraph 36). In May 2018 Mr Jones acknowledged that the Claimant had worked very hard. In October 2018 in the Claimant’s mid- year review, Mr Jones recognised the long hours the Claimant had put in and that this had had a significant impact on his wellbeing and family life.[82]Also the Claimant pointed to gaps in the management tier structure left by the departure of Mr Jones, absence of the principal surveyor and lab manager suspension. However there was not any evidence before me as to how this impacted on the Claimant’s workload. He did not have to undertake any of the surveyor duties. He attended the Swansea laboratory once per month. I did not know how the replacement of the lab manager with a part time equivalent meant more work for the Claimant. I accept that Mr Jones’ loss was more keenly felt and this was even recognised by Grant Thornton in their later review. The Claimant had team leaders in place who managed the actual teams of staff.[83]In the response to the claim the Respondent acknowledged that the Claimant had faced significant challenges and that his management team was depleted but that capacity was maintained by back filling and reallocation. The Respondent sought to advance an argument that the Claimant was to blame for failing to recruit a replacement for Mr Jones. This was not sustainable as based on the evidence before me the reason he was never replaced was due to the restructuring of the Claimant’s role in May 2018 rather than any failing on the Claimant’s part.[84]In May 2018 the Respondent had identified that the Claimant’s role was too wide and proposed to split the role. The Respondent themselves recognised the role needed to be undertaken by two people instead of just Case Number: 1600302/2019 20 the Claimant. It therefore must follow that the Claimant’s role was too wide for one person to reasonably have undertaken. The Claimant was unhappy about the way the announcement was handled but also about the proposed role split. He wanted to retain all aspects of timber marketing.[85]This did not sit comfortably with the Claimant’s assertion that he had been required to work an excessively high workload and undertake increasing management duties without support. Whilst I do not doubt the Claimant worked hard and long hours, he did not at that stage welcome this particular reduction in his duties which was without doubt the most problematic and time consuming. It was timber marketing that had led to the qualification of the Respondent’s accounts three times. In particular in his email dated 14 May 2018 the Claimant does not even seem to agree that his workload was unmanageable or excessive. He is more concerned on the lack of consultation before the change to the role was announced.[86]I also bear in mind that the Claimant occupied a very senior and responsible role within the organisation.[87]As far as the Claimant was concerned, based on what he knew at the time I find that he was reasonable in assuming the steps taken by the Respondent to reduce the Claimant’s workload would not have made any impact until the middle of 2019 when the new head of Commercial was likely to have been ‘up and running’. I agree that the steps taken in December 2018 to reduce his workload were unlikely to have reduced his workload other than in a marginal way. The removal of the Swansea lab management was insignificant as the Claimant only attended there once a month in any event. The amount of work to be done was likely to remain static due to the involvement the Claimant would have had on remedying the Grant Thornton recommendations. I have taken into account the appointment of Ms Piper to lead on the project so the Claimant would have had input but not to the level that would have resulted in an increase in his workload. To a degree there was a plan in place to reduce the Claimant’s workload with the upcoming appointment of the new Head of Commercial.[88]Balancing all of the above factors I have concluded that whilst the Claimant was required to work excessive hours which impacted on his well-being, the extent of this was not at the level that amounted to a fundamental breach of the implied term of mutual trust and confidence. In reaching this conclusion I have taken into account the context of the role, its seniority and the issues faced by the Respondent at that time. I have also taken into account the limited extent that the Claimant brought this to the attention of the Respondent at the relevant time. Case Number: 1600302/2019 21 Between August 2018 – December 2018 the Respondent mismanaged the evaluation of timber marketing by external consultants Grant Thornton[89]I did not conclude, based on the evidence before me that the Respondent mis managed the evaluation of timber marketing by external consultants Grant Thornton.[90]In my judgment the Respondent were entitled and reasonable in instructing external consultants to prepare a report on the timber marketing given the qualification of the Respondent’s accounts by the Welsh Auditor general for the third time.[91]In terms of the choice of Grant Thornton I accepted Ms Pillman’s evidence that whilst they were not forestry specialists the issues that had caused the qualification of the accounts did not require forestry expertise. What was required was a specialisms in public sector obligations and compliance and there was no evidence before me that Grant Thornton were not suitably qualified to undertake this role.[92]In terms of the lack of scope of review it is correct there was no written scoping document. However there was an oversight group and in my view it must have been clear to everyone involved why Grant Thornton had been brought in. The Respondent acted reasonably in enabling Grant Thornton to have full and unfettered access to the information and staff they required in order to investigate the issues that required investigation.[93]I have taken into account that there was an error in the interim findings in respect of contract addendums (see paragraph 57 above). I accept the Claimant had grounds to be concerned about such an interim finding. However this was the only actual example the Claimant was able to cite for a reason to be critical of the findings. The Claimant accepted that there were some matters within the findings that needed addressing. For example the findings in respect of evidencing decisions. The Claimant had drafted an action plan to take these matters forward.[94]The Claimant’s main concern appeared to be that he (or no-one with forestry experience) was not included in the oversight group and therefore could not have an input or provide context. I have reached a view that I agree with the Respondent’s submissions that none of the criticism of the Grant Thornton review, save the error on respect of the contract addendums are convincing. The Claimant may have justifiably wanted to add context and reasons why certain things had happened (e.g. faults with the IT system) but this does not change the reasonable position taken by the Respondent to urgently change the way things needed to move forward and to have obtained external and independent advice on how this could be done. Case Number: 1600302/2019 22[95]I also find that the appointment of Ms Piper was reasonable in all the circumstances. The Respondent had already acknowledged the Claimant’s role was too wide and the Head of Commercial had not been recruited into. The Respondent needed someone to lead the response to the Grant Thornton review. Given that the Claimant’s case was that he was already substantially over worked, it was not a breach of trust and confidence to appoint someone to head this project up. It was clearly envisaged the Claimant would be involved and liaise with Ms Piper and he had already had an outline meeting with her.[96]There was no evidence other than the Claimant’s own view that his authority and credibility was wholly undermined. The Claimant was a highly regarded professional by his colleagues and staff. However notwithstanding the background context and the Claimant’s opinion he had acted in the Respondent’s best interests, there was an external view that the transitional contracts were validly subject to criticism. This had to be resolved by the Respondent.[97]The Claimant submitted that Ms Pillman’s view that the issues raised by Grant Thornton were not new (see paragraph 60) was simply wrong as the Respondent had been criticised for the timber contracts awards whereas the Grant Thornton review looked more at day to day contract management and systems. I did not agree with this contention. Ms Pillman was referring to the findings of the AG outlined at paragraph 48 all of which had been highlighted in the previous qualifications. In my judgment it was reasonable for Ms Pillman to have concluded that the issues Grant Thornton raised in their interim findings were not new. The issues with the LTC’s and the transitional contracts could not be sensibly viewed in a vacuum. As such, it was reasonable for the Grant Thornton review to look at how these decisions had been arrived at in the first instance.[98]Around this time it is evident that emotions were running high and the entire senior management team as well as Ms Pillman were under a lot of pressure. However I did not accept that Ms Pillman or Sir David were “angry” and “chastised” the Claimant in a manner that amounted to a breach of the implied term of mutual trust and confidence. They were entitled to express very serious concerns to the senior management team that there had been a third qualification of the accounts and some months later external independent auditors had found that matters were not effectively in hand to address these issues.[99]I have also concluded that some of the criticism levelled at the Claimant by Sir David failed to take into account the background and context of the situation. There was a failure by the Respondent to acknowledge that as far back as 2016 the Claimant had cautioned against extending the timber Case Number: 1600302/2019 23 contracts as the sawmill contractor had failed to fulfil their contractual obligations. The Claimant also warned the former CEO that there had ben previous criticism in not seeking Welsh Government approval (see paragraphs 10 and 11 above) but this advice was not followed by the former CEO.[100]There was also a lack of appreciation of the work undertaken by the Claimant in completing the enterprise plan and the forestry certification. The Claimant had had to engage in fire fighting when he took up the role in March 2017.[101]Nonetheless, the Respondent was highly criticised by the PAC and had their accounts qualified for a third time due to the transitional contracts negotiated by the Claimant in 2017. The Claimant acted and sought full authority for this proposal. No-one from the Respondent sought to blame the Claimant for the consequences of this process.[102]The actions of the Respondent are not in my view without criticism. However they were entitled to take the action they did in trying to resolve the very serious matter of having their accounts qualified. Sir David was entitled to speak plainly and directly about these matters not just to the Claimant but the other senior managers.[103]In a claim of constructive dismissal where the breach of contract is the implied term of mutual trust and confidence, I have carefully considered all of the events and behaviours of the Respondent towards the Claimant. Having regard to the three matters relied upon as a course of conduct I have concluded that the Respondent, whilst far from free of criticism, did not act in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust. Whilst there was an issue with the Claimant’s workload this in itself did not amount to a fundamental breach and there were plans in place to address this. The Respondent had reasonable and proper cause to engage Grant Thornton and express concerns as conveyed at the last straw meeting.[104]The Claimant’s claim is therefore dismissed.