Mr M Acton Davis v Ebury Partners UK Ltd: 2203590/2019
EMPLOYMENT TRIBUNALS
Case No 2203590/2019
Between
Mr M Acton DavisClaimantEbury Partners UK LtdRespondent
Before
Employment Judge NicolleIn person for claimantDate 10 February 2021
JUDGMENT
The claims for constructive unfair and wrongful dismissal fail and are dismissed. No claims were pursued for unauthorised deductions from wages and accrued holiday entitlement and these claims are dismissed on withdrawal.
REASONS
[1]Whilst the hearing took place in person the witness evidence of Juan Lobato, Co-Founder and Co-Founder CEO (Mr Lobato), Jane Sim, Chief People Officer, (Ms Sim) and Duane Swailes, Head of Sales Acceleration (Mr Swailes) was given by video link. The Claimant and Aliz Simon, the Respondent’s former Manager of Special Projects and Incentive Team (Ms Simon), gave evidence in person. Whilst the Respondent served a witness statement on behalf of Paolo Giabardo, Chief Commercial Officer (Mr Giabardo) he was not called to give evidence. - 1 -[2]There was an agreed bundle comprising of 485 pages. During the hearing, a small amount of additional documentation was added to the bundle pertaining to an exchange between the parties regarding the disclosure process.[3]In advance of the hearing the Claimant produced a list of issues and a chronology. Whilst neither of these documents were agreed by the Respondent, they nevertheless contained what was accepted to be a factually accurate chronology of principal events. Mr Skinner also provided the Tribunal with an opening proposed reading list, list of key dates, list of issues and summary of the legal framework. Both parties provided the Tribunal with written closing submissions in respect of which they extemporised during oral submissions.
The Issues
[4]There was no agreed list of issues and no list of issues set out in any earlier case management order. Nevertheless, I consider that the issues to be determined were clear from the pleadings and by opening discussions with the parties. In short:a. Was the Claimant constructively dismissed on 3 July 2019 because of a breach by the Respondent of an express and/or implied term of his employment relating to its decision to end the payment of commission as first communicated to him at a meeting on 10 May 2019?b. Did the Claimant affirm the contract prior to his resignation?c. If not, was the alleged repudiation the reason for the Claimant’s resignation?[5]In his closing submissions Mr Skinner argued that events after the meeting between the Claimant and Mr Lobato on 10 May 2019 were outside the scope of the Claimant’s pleaded case. He referred specifically to the Claimant’s reliance in evidence and his submissions to subsequent events to include email communications, the receipt of his payslip on 27 June 2019 and his telephone and email communications with Mr Lobato in the period 1-3 July 2019.
Findings of Fact
[6]The Respondent was co-founded by Mr Lobato and Salvador Garcia (Mr Garcia) in 2009. It provides a global transaction banking platform for FX risk management, international payments, trade finance and currency accounts. It has grown rapidly and now has approximately 1000 employees based in 24 offices across twenty countries. Its Headquarters are in London. The Claimant - 2 -[7]The Claimant commenced employment with the Respondent on 15 April 2013 as a Business Developer. In December 2013 he was promoted to Senior FX Sales and in July 2014 to Head of Desk – FX Sales.[8]In May 2016 he was appointed as a Partner. The Respondent promotes a very small number of Partners to reflect their outstanding financial contribution to the business. At the time of the Claimant’s promotion, he was one of only four or five Partners within the business. This has now increased to 10.[9]In May 2017, the Claimant was appointed Co-Head of Sales UK. The Claimant’s Contract of Employment[10]The contract provides for a commencement date of 26 October 2017 (the Contract) and states that the Claimant’s position is Head of Sales UK.[11]Clause 1.7.1 provides that the terms and conditions in the Contract are valid for an indeterminate period.[12]Clause 1.12 headed Commission provides as follows:1.12.1 at the Employer’s discretion you may earn commission that may be notified to you from time to time.1.12.2 any previous payments or payments to you of commission will not act to establish a right for you to be paid commission. 1.12.4 the Employer reserves the right to amend their commission policy from time to time. 13. 1.14.1 provides for four weeks’ written notice to be given by either party. The Claimant’s Secondment to Canada[14]In late October 2017, the Claimant was approached by Mr Giabardo and Mr Lobato asking him if he was willing to become Country Manager in Canada. This opportunity arose because of a decision made by the Respondent that Ian Taylor, who had been appointed to the position was not the right fit for the post.[15]The Claimant accepted the offer. He saw the secondment to Canada as a steppingstone to his wish to work in the US where the Respondent did not at that time have an office. Work Permit Application[16]In a letter dated 30 October 2017 to Canada Border Services Agency the Respondent applied for a one-year work permit – ICT Start-Up for the Claimant. This included the following details of the Claimant: - 3 - “Within nine months, due to his excellent performance, he was promoted to the role of Senior FX Sales. After that, he has had several promotions and was the Head of Desk, Head of Sales, Partner and now, Country Manager.” Commencement in Toronto[17]The Claimant arrived in Toronto on or about 2 November 2017. He was responsible for setting up and developing the Respondent’s office. Side Letter[18]Negations took place between the Claimant and the Respondent as to the terms of a Side Letter to his Contract of Employment. The bundle contained three drafts of the Letter.[19]The first draft dated 3 November 2017 provided for a one-year fixed term ending 26 October 2018. It did not provide for the payment of commission to the Claimant.[20]Version two of the Letter, also dated 3 November 2017, again provided for a one-year fixed term but included a provision regarding the payment of commission. The final version of the Side Letter is dated 29 November 2017. Its material provisions in the context of this claim are:a. It is subject to and governed by the Contract.b. Its terms are legally binding.c. The Claimant shall be Interim Country Manager commencing from 26 October 2017 and after 12 months, shall continue on a rolling basis until the parties agree otherwise.d. The terms of this Side Letter shall apply for 12 months and will continue on a rolling basis until the parties agree otherwise. Upon the terms of this Side Letter ceasing to apply, the terms of the Contract of Employment shall apply instead.e. Clause 1.10.1 of the Contract shall be amended and during the Appointment you shall not receive the salary stated within clause 1.10.1 of the Contract and instead, you shall receive an annual salary of $170,000 (CAD equivalent of £100,000 per annum).f. You will continue to receive commissions due to you on UK accounts and receive 10% commissions on all new business from Canada for the duration of the one-year secondment.g. No variation of this Side Letter shall be effective unless it is in writing and signed by the Parties. The Claimant’s Role in Canada - 4 -[21]The Claimant’s role was in effect to develop the Respondent’s Canadian office from scratch as well as developing client relationships this included setting up the office, hiring a team of employees, the setting up of required technology, a bank account, necessary regulatory and compliance authorisation and processes.[22]The Claimant says that he lacked required support from the Respondent in the establishment and development of the office. This is disputed by the Respondent.[23]He says that it was difficult to generate significant profits in Canada partly because of the very small margin between US and Canadian interest rates but also because of what he considered to be the difficulty recruiting employees of the required calibre because of what he thought to be the Respondent’s uncompetitive remuneration. He also referred to the Canadian marketplace being crowded and the difficulty of developing a business in a competitive market.[24]The Claimant says that despite the above difficulties that revenue and profitability were progressing. He says that January 2019 was the first month in which revenue hit $100,000 and that $200,000 was achieved for the first time in April 2019.[25]Whilst the Respondent considered that the financial performance of the Toronto office was below expectations there was no direct criticism of the Claimant. Mr Lobato says that the Claimant was a highly valued employee, and it was his and the Respondent’s wish that he should continue as Canadian Country Manager.[26]I find that notwithstanding the difficulties which the Claimant experienced that he remained committed to using his best endeavors to develop the Canadian office. Further, I find that the Respondent remained supportive of the Claimant and did not effect changes to his remuneration on a punitive basis because of shortcomings in his performance. Extension of Visa[27]In a letter dated 6 September 2018 the Respondent applied for an extension of the Claimant’s Canadian visa. The letter set out details of the Claimant’s role in Canada as follows:• Building commercial strategy for Ebury’s entrance into the Canadian market including assessing viability of key verticals/sectors.• Liaising with stakeholders in the market including regulators, trade groups, banks and other partners. - 5 -• Day to day management of the office including setting targets, hiring, coaching and training. Driving the soliciting and marketing process including conducting relevant meetings and calls.[28]The letter stated that the Claimant received an annual base salary of $170,000 CAD. Commission Payments[29]It is acknowledged that commission comprised a significant part of the Claimant’s remuneration. For the year 2 April 2016 his total gross earnings were £147,463 of which £40,000 was base salary. In the tax year to 5th April 2017 his total gross earnings were £164,684 of which £50,000 was base salary.[30]The bundle included a copy of the Respondent’s Commission SOP dated 1 May 2019. It includes the following disclaimer on the first page: “Commissions by nature are considered variable compensation and therefore, commission payouts remain discretionary and subject to managerial approval at all times. SOP document is subject to change based on managerial decisions”.[31]The remainder of the commission SOP document contains details of the basis upon which commission payments are calculated. In principle commission is payable to those employees who obtain sales at various defined rates for up to five years after the first trade is booked.[32]Most of the revenue that the Respondent generates is on forward contracts. It offers forwards for up to seven years, and the commission is paid to the salesperson when the transaction closed.[33]The effect of this was that whilst the Claimant’s entitlement to commission based on his UK sales would gradually diminish his attributable to Canadian clients would progressively increase. Country Manager Contracts[34]The bundle contained several offer letters for various Country Managers. These were redacted to protect confidentiality. The Claimant referred to them with a view to demonstrating that the Country Managers were engaged on disparate remuneration terms with some receiving significant payments of commission. The Respondent’s position is that the remuneration of Country Managers would vary dependent on whether they were new recruits to the Respondent or had previously been employed but in a sales position. The Respondent says that for all Country Managers it was always an expectation that any entitlement to residual commission based on previous sales positions would have a finite duration and last no longer than 12 or 18 months. The Respondent - 6 - says that this was common knowledge amongst all staff to include Country Managers. Process leading to change in the Claimant’s remuneration in 2019 The use of the square brackets below reflects redactions in the documents included in the bundle.[35]In an email from Mr Lobato to Mr Giabardo on 20 March 2019 he stated: “I think we can stop all commission payments next year (despite being booked in trades this year) this would be cleaner for the CMs. I would not cause conflicts with [ ] for the last six weeks of the year, and I would impose a new comp package for all CMs based on your targets to drive them where we want to drive them”.[36]In an email of 20 March 2019 to Ms Simon, Mr Giabardo stated: “For clarity if we want to stop from 1 May we have two options:• We won’t pay any commissions next year.• We still pay commissions on drawdowns for trades of the [ ] office booked until 1 May. This is potentially 10% of [ ] m so very significant.[37]In an email from Mr Lobato to Mr Giabardo of 1 May 2019 he stated: “I would like to stop CM commissions from today. In my mind you should tell all your CMs in EMEA that from this year everyone moves to a fixed plus bonus, no one is to receive any commissions from new or older clients. So, a clean start”.[38]Also, that day in reply to Mr. Lobato, Mr. Giabardo stated: “I agree CM commissions should stop from this year. Does any CM have different agreements? I know [ ] was an issue last year to stop because of [ ] law, where pay could not go down”.[39]I find it to be clear from the above exchange of emails that the Respondent was proposing a change to Country Managers’ existing remuneration and that this was not part of the normal annual review process but rather because of a change in the Respondent’s policy. This may in part have arisen because of the previous flurry of new office openings having stablised and all the Country Managers therefore having been in situ for several years. Meeting between Claimant and Mr Lobato on 10 May 2019 - 7 -[40]There was inconsistency in the evidence as to whether this meeting took place on 10 or 17 May 2019. However, based on the conversation chain from Google Chat contained in the bundle it is apparent that it was on 10 May 2019.[41]The meeting took place in the Respondent’s London office and lasted for approximately 15 minutes. As well as a general discussion regarding the Respondent’s business in Canada Mr Lobato informed the Claimant that his entitlement to commission would cease with effect from 1 May 2019, but he would be compensated by an increased basic salary, a discretionary bonus and eligibility for being granted equity.[42]Following the meeting with Mr Lobato the Claimant spoke with Mr Giabardo. In his witness statement Mr Giabardo says that during this meeting with the Claimant he told him that the Canadian office was not doing well and that he was lucky to still have a job. Also, in his statement Mr Giabardo refers to the Claimant having told him during this meeting that he was not very happy with his compensation. Mr Giabardo did not take the matter further and was of the view that if the Claimant had an issue, he should take it up with Mr Lobato.[43]On 10 May 2019, the Claimant had an exchange with Patrick Hodge (Mr Hodge) regarding his meeting that day with Mr. Lobato. This included the Claimant stating: “Going to summarise our conversation and ask for the bonus structure in writing”. Mark Hewlet – Visit to Toronto Office[44]Mark Hewlet, Wholesale Banking Relationship Director (Mr Hewlet) visited the Toronto office and reported in an email of 14 May 2019. There is no need for me to provide details of his findings save to say that he identified strengths of the office to include the Claimant and weaknesses to include salaries and the commission structure. Email from Ms Simon dated 31 May 2019[45]In an email of 31 May 2019 Ms Simon in the Commissions Team set out details of Country Managers’ remuneration to Mr Giabardo and Martin Fest. This document is largely redacted albeit capable of a process of inference based on the size of the redacted columns. The Claimant sought to highlight other Country Manages who he believed continued to receive commission. In her email Ms Simon asked: “Can you please confirm which should be continued and which should be stopped for FY 2019?”[46]In an email from Mr Fest to the Commissions Team, and copied to Mr. Giabardo, of 3 June 2019 he stated: - 8 - “I understood the plan was to stop paying commission. Was this for all or just new business?”[47]Later that day Mr Giabardo replied: “We will stop all commission payments to all Country Manager, excluding Rick. This includes all commissions, including sales commissions. To clarify: CMs should get only base salary and no commission payments whatsoever”.[48]In an email from Mr Giabardo to the Commissions Team and copied to Mr Fest dated 12 June 2019 he stated: “They all know they are not receiving commissions any longer, all reviews are done”. Claimant’s query regarding commission payments of 14 June 2019[49]The Claimant raised a query with the Commission Team regarding his not having received a commission statement for the previous month and in respect of some missing information that needed to be added for various trades which he contended should be paid at 10%. In response the Claimant was advised in an email of 17 June 2019 from the Commissions Team that commissions would not be paid to Country Managers for May 2019. The Claimant clarified in reply that this was to rectify errors made for April 2019. Salary review letter[50]In a letter dated 17 June 2019 Suzie Yong, Head of HR advised the Claimant that his salary had been increased to $202,800 CAD per annum. This was back dated to 1 May 2019 and that payment would be made in the June payroll. He was advised that all other terms and conditions of his employment remained unchanged.[51]Mr Lobato said that this was a standard letter, but it should have come with a revised contract. He said that he had not seen or approved the letter. Mr Giabardo email of 20 June 2019[52]In an email of 20 June 2019 from Mr Giabardo to Mr Lobato he included the following comments: “Main issue is that the deals we gave CMs in the last two years have multiple wordings with some suggesting that they would receive commission. Our commissions are earned or locked in when booking, e.g., a trade booked last year and DD next month could fall under the agreement (again depending on wording), this is an issue mainly for: Tom, Matthew, Nils (to a lesser extent to Wolfgang and Cyril). The three of them are kicking off now. - 9 - The real issue here is that it could very well be that we legally cannot effectively stop paying them. There is another issue that is less immediate but potentially more problematic, a CM or a big hub gets [ ] bonus on average in a good year. These guys are used to much higher levels of pay (like everyone in front office). The usual argument would be that CMs get less cash but get shares, but that cannot really be used because they all got shares on top of the cash. EG [ ] was on [ ] there is no way I can pay him that next year”.[53]Mr Lobato replied later that day as follows: “In any case I think you are in a good place. CMs have a lot in shares. If they resign, they lose the shares as they are bad leavers. If they do not perform and we fire them they lose the component that has not yet vested (also a lot). The same time your quarterly bonus scheme should make them work very hard to achieve it. Failing to achieve they can work hard to get their annual bonus. Think that we are in a good spot and we can push them harder”. 27 June 2019 Pay Slip[54]The Claimant says that he was surprised to receive this pay slip which stated that he had received nil commission for the preceding month. He complains that his basic pay had not been increased to reflect the salary increase effective from 1 May 2019.[55]The pay slip stated that the Claimant received over $87,000 CAD of commission for the first five months of 2019. The majority of this related to UK trades.[56]In summary the Claimant says that his pre-1 May 2019 remuneration comprised a base salary of circa £100,000 together with commission payments of circa £100,000 so a total package worth approximately £200,000. He says that because of the changes effected by the Respondent effective from 1 May 2019 his base salary was circa £120,000 with potential entitlement to quarterly discretionary bonus payments of an undetermined amount. Mr. Lobato says that the Claimant would have been in a no less advantageous position. He referred repeatedly to Country Managers doing extremely well and becoming very wealthy both because of bonuses but also the grant of equity. 1 July 2019 - 10 -[57]The Claimant had a nine-minute telephone conversation with Mr Lobato. He expressed dissatisfaction regarding losing his UK commission. Mr Lobato accused him of lying about this and saying that he was aware that the change was going to made. Mr Lobato perceived that the Claimant had been satisfied with the proposal made at his meeting with him on 10 May 2019. Mr Lobato says that he was surprised by the Claimant’s unusual tone during this call.[58]Shortly after the call the Claimant sent, undercover of an email, a four-page letter to Mr. Lobato. Given the brief time between the call and the letter being sent it is apparent that it had been largely prepared in advance. The Claimant referred to there having been a fundamental breach of his contract of employment. He said that the Respondent had unilaterally forced through its decision to withdraw the commission arrangements which in effect represented a 50% cut to his remuneration.[59]In an email a few moments after receipt of the letter Mr Lobato said to the Claimant: “Good luck with whatever you do in the future, you are a talented guy, I hope you make the right calls for the future”.[60]In an email of 16:03 to Ms Yong, Ms Sim, Mr Swailes and Mr Giabardo. Mr Lobato stated: “It is not clear from his letter whether he is resigning or not, perhaps the best way to play it is to offer him to be back in UK with a HOD role and hence ending his secondment in Canada. Let’s play it well”.[61]In an email from Mr Lobato to Mr Swailes, Ms Sim, Mr Giabardo and Ms Yong of 16:54 he included the following: “Quite sad to see how Matt has behaved and how little attachment he had for what has been built in Toronto so far. Jane to contact him, making clear to him that we are not going to change any of the conditions communicated to him several times over the last few weeks (from May this year he is on a CM package with his base plus bonus, bonus to run quarterly and annually based on Canada hitting targets). Hence, we are happy for him to resign as soon as possible”.[62]Mr Lobato says that his comments in respect of being happy for the Claimant to resign related to his position as a Country Manager in Canada rather than from the Respondent Group. He says that the Claimant remained a valued employee. He also says that this email was sent in the heat of the moment and that his position changed on further reflection. In an email of 21:54 to the Claimant Mr Lobato included the following: - 11 - “When I last met with you in London a few week ago, I thought that moving you to our more standard Country Manager compensation structure was going to be a better incentive for you. I thought you were ok with them (clearly I was wrong to assume that). I have thought hard about what to do that is best for you and the company. I am going to revert back to your previous compensation structure once your secondment in Toronto is over, I would like to you to be back in the UK where you will resume your role as HOD”.[63]The Claimant says that he was insulted by the proposal. He says that reverting to his position as Head of Desk would have been a demotion given that he had previously been Head of Sales. He also says that it had always been clear that he did not want to return to the UK but regarded Canada as a steppingstone to the US. 2 July 2019[64]The Claimant sent a further two-page letter to Mr. Lobato. He complained that Mr Lobato had accused him of lying regarding the proposed change to the UK commission terms and that he would not be welcome in the London office again. Mr Lobato disputes making this second comment. He says that the relationship of trust and confidence between him and the Respondent had been destroyed.[65]Mr Lobato sent the Claimant an email at 18:29 to say that he wanted him to continue working in the Toronto office on his pre-1 May 2019 terms and then to return to the London office to resume his role as HOD. 3 July 2019[66]The Claimant sent Mr. Lobato a two-page letter saying that he wished to resign because of the Respondent’s fundamental breach of his contract of employment. He referred to Mr Lobato’s action since the review meeting in May and his accusation on 1 July that he way lying. He says that the alternative role as Head of Desk would be a demotion given his previous position as Head of UK Sales. He referred to his pay slip received on 27 June 2019 not including commission. Subsequent Events[67]In an email of 4 July 2019 Mr Lobato advised the Claimant that the Respondent did not wish him to resign.[68]In an email of 4 July 2019 from Ms Sim to Mr Lobato she referred to having spoken with Tom who was also aggrieved regarding changes to the bonuses. She said that Lloyd and Niels were also upset. She also stated that it sounds like Alpha is where the Claimant was going. - 12 -[69]Alpha is a direct competitor of the Respondent which has a history of aggressive recruitment. However, neither Mr Lobato nor Ms Sim had any actual evidence that Alpha had approached the Claimant or that the Claimant was in negotiations with them. The Claimant say this was not the case. I find no evidence that the Claimant was in negotiations with Alpha whilst still employed by the Respondent.[70]Ms Sim sent the Claimant an email on 10 July 2019 saying she hoped that the situation could be resolved and that he would remain with the Respondent. She then travelled to Toronto with the intention of meeting with him. However, he had already left and travelled to France.[71]On 28 November 2019, the Claimant was sent an email by Ellie Stringer, Senior HR Generalist setting out his entitlements to commission payments up to the termination of his employment on 3 July 2019. Future Employment[72]The bundle included a printout from the Claimant’s LinkedIn showing various positions applied for. It was not until 7 April 2020 that he was successful in commencing employment as Head of Corporate Product Sales with Revolut in London. Mr Giabardo’s Evidence[73]As Mr Giabardo did not attend to give evidence limited weight attaches to his statement. Nevertheless, it is relevant to highlight the following points from paragraphs 17-19 of his statement:• “The plan was that any Country Manager who earnt commission “and was not on the basic salary plus bonus compensation structure) would change from being paid a basic salary plus commission to a basic salary plus a bonus – which would be paid out quarterly and annually”.• “Juan’s view was that we could move any Country Manager who received commission on to the bonus scheme”.• I remember being surprised that so many Country Managers earned commissions, particularly those who have been Country Managers for over 12 months. It had always been my understanding that any individual would only receive commission for a limited period (i.e., 12 months), unless there was extenuating circumstances, however, it had been extended in some cases. Eligibility for Bonuses[74]Mr Lobato says that bonuses are discretionary. They generally reflect financial performance. However, in the case of the Claimant he was willing to - 13 - use KPIs, based on the Claimant’s effort rather than solely financial performance, as a reflection of the difficulties the Canadian office had encountered. Mr Swailes was not aware of any other occasions where nonfinancial metrics were used as KPIs to determine the size of a bonus.[75]The Respondent has a Remuneration Committee which determines and approves the size of individual bonuses and aggregate remuneration packages for senior employees, to include Country Managers.
The Law
[76]Section 95 (1) (c) of the Employment Rights Act 1996 (the ERA) states that there is a dismissal when the employee terminates the contract, with or without notice, in circumstances in which he or she is entitled to terminate it, with or without notice, by reason of the employer’s conduct.[77]The leading authority is Western Excavating ECC Ltd v Sharp [1978] ICR 221. The employer’s conduct which gives rise to constructive dismissal must involve a repudiatory breach of contract Lord Denning stated: “If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract then the employee is entitled to treat himself as discharged from any further performance. If he does then that terminates the contract by reason of the employer’s conduct. He is constructively dismissed.”[78]In summary there must be established first that there was a fundamental breach on the part of the employer; second, the employer’s breach caused the employee to resign; and third, the employee did not affirm the contract as evidenced by delaying or expressly.[79]I also note Bournemouth University v Buckland 2010 IRLR 445 CA. The head note reads: “In constructive dismissal cases, the question of whether the employer has committed a fundamental breach of the contract of employment is not to be judged by a range of reasonable responses test. The test is objective: a breach occurs when the proscribed conduct takes place. The following stages apply to the analysis of a constructive dismissal claim:(i) in determining whether or not the employer is in fundamental breach of the implied term of trust and confidence the unvarnished Malik test applied;(ii) if acceptance of that breach entitled the employee to leave, he has been constructively dismissed;(iii) it is open to the employer to show that such dismissal was for a potentially fair reason; and(iv) if he does so, it will then be for the employment tribunal to decide whether the dismissal for that reason, both substantively and procedurally, fell within the range of reasonable responses and was fair. - 14 - It is nevertheless arguable that reasonableness is one of the tools in the employment tribunal's factual analysis kit for deciding whether there has been a fundamental breach. There are likely to be cases in which it is useful. But it cannot be a legal requirement…”[80]In Malik v Bank of Credit and Commerce International SA 1997 IRLR 462. The House of Lords confirmed that there is an implied duty of mutual trust and confidence 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”.[81]I note that it is generally accepted that it is not necessary that the employer's actions should be calculated and likely to destroy the relationship of confidence and trust, either requirement is sufficient.[82]There is no breach of trust and confidence simply because the employee subjectively feels that such a breach has occurred no matter how genuinely this view is held. If, on an objective approach, there has been no breach then the employee's claim will fail (see Omilaju v Waltham Forest London Borough Council [2005] EWCA Civ 1493, [2005] ICR 481, CA). The legal test entails looking at the circumstances objectively, i.e., from the perspective of a reasonable person in the claimant’s position. (Tullett Prebon PLC v BGC Brokers LP [2011] IRLR 420, CA.) Last Straw[83]In so called last straw dismissals there can be a situation where individual actions by the employer, which do not in themselves constitute a breach of contract, may have the cumulative effect of undermining the implied term of mutual trust and confidence. One or more of the actions may be a fundamental breach of contract, but this is not necessary. It is the course of conduct which constitutes the breach. The final incident itself is simply the last straw even if in itself it does not constitute a repudiatory breach. The last straw should at the least contribute, however slightly, to the breach of the implied term of trust and confidence.[84]In cases where there has been a course of conduct, the tribunal may need to consider whether the last straw incident is a sufficient trigger to revive the earlier ones. In doing so, I may take account of the nature of the incident, the overall time spent, the length of time between the incidents and any factors that may have amounted to waiver of any earlier breaches. The nature of waiver is also relevant in the sense of was it a once and for all waiver or was it simply conditional upon the conduct not being repeated.[85]Omilaju v London Borough of Waltham Forrest is authority for the proposition that the last straw does not have to be of the same character as the earlier acts, nor must it constitute unreasonable or blameworthy conduct, - 15 - although in most cases it will do so. But the last straw must contribute, however slightly, to the breach of the implied term of mutual trust and confidence. An entirely innocuous act on the part of the employer cannot be a final straw. The test is objective. It is unusual to find a case where conduct is perfectly reasonable and justifiable but satisfies the last straw test. Reason for Resignation[86]I must consider causation, the employee must show that he has accepted the breach, the resignation must have been caused by the breach and if there is a different reason causing the employee to resign in any event irrespective of the employer’s conduct there can be no constructive dismissal.[87]The repudiatory breach or breaches need not be the sole cause of the claimant’s resignation. The question is whether the claimant resigned, at least in part, in response to that breach. (Nottinghamshire County Council v Meikle [2004] IRLR 703, CA; Wright v North Ayrshire Council UKEATS/0017/13.)[88]I note that where there are mixed motives the tribunal must consider whether the employee has accepted the repudiatory breach by treating the contract of employment as at an end. Acceptance of the repudiatory breach need not be the only, or even, the principal reason for the resignation, but it must be part of it and the breach must be accepted. Waiver[89]The question of waiver must be considered. A clear waiver, or simple passage of time, may demonstrate that the employee has affirmed the contract at any particular moment. However, it may be that a final incident would be sufficient to revive any previous incidents for the purpose of showing a breach of the implied term. Submissions The Respondent[90]Mr Skinner contends that the case is predicated on a misunderstanding that has been blown out of proportion. He says that the Claimant knew about the changes from 10 May 2019 but failed to put his concerns in writing until after his telephone call with Mr Lobato on 1 July 2019.[91]He says that there was no breach of the express terms of the Contract as commission is stated to be discretionary and the Side Letter is subject to the terms of the Contract. He also says there was no breach of the implied term of trust and confidence. He says that moving the Claimant on to a standard Country Manager package was unquestionably a reasonable and proper cause for making the changes proposed.[92]He says that by continuing in employment for a further eight weeks after the meeting with Mr Lobato on 10 May 2019 that the Claimant had affirmed the - 16 - Contract. He referred to Chindove v William Morrison Supermarket [2014] UK EAT /02/01/13/BA which indicated that four weeks was a benchmark period for affirmation. The Claimant[93]The Claimant’s closing submissions largely represented a further detailed summary of the chronology and events upon which he relies. I should, however, note that at paragraphs 1-3 of his submissions on pages 11-12 he includes reference to events after the meeting with Mr Lobato on 10 May 2019 and as stated above Mr Skinner contends that these are not expressly included within his ground of claim. Conclusions What acts are relied on by the Claimant as constituting a repudiatory breach or breaches?
Conclusions
[94]Before I consider whether there was a repudiatory breach, or breaches, of the express and/or implied terms of the Claimant’s employment I will consider what acts or omissions he is entitled to rely on. Mr Skinner submits that his claim as pleaded relates solely to what was communicated to him by Mr Lobato at the meeting on 10 May 2019. The Claimant seeks to rely on matters up to and including his telephone call and subsequent email communications with Mr Lobato on 1 July 2019.[95]I have revisited the Grounds of Complaint appended to the Claimant’s Claim Form. Whilst at paragraph 11 he refers to the meeting on 10 May 2019 (wrongly stated as 17 May) it is notable that paragraph 15 refers to the letter of 17 June 2019 notifying him his revised salary, paragraph 17 refers to the statement of earnings received on 28 June 2019 and paragaraph 18 refers to his communications with Mr. Lobato on 1 July 2019.[96]Whilst paragaraph 21 under the heading “The Claims” refers to changing the terms of the Side Letter as being the breach which the Claimant accepted when he resigned, I do not consider that this should be narrowly construed to what was communicated to him on 10 May 2019. I consider that the claim as pleaded includes the subsequent matters which involve the implementation of what was proposed, to include the reduction in salary paid to the Claimant as notified to him on 28 June 2019, and subsequent communications with Mr Lobato relating thereto. I do not, however, consider that the claim includes the Claimant alleging that being called a liar, and that he was not wanted in the London office, were separate breaches of the implied term of trust and confidence in respect of which he resigned. Was the change in remuneration arrangements i.e., the cessation of commission payments in breach of the Claimant’s contractual terms? - 17 -[97]Mr Skinner argues that there was no contractual breach. I find that neither the Contract nor the SOP Commission Plan provided a contractual entitlement to the payment of commission. I reach this finding for the following reasons:(a) Clause 1.12 of the Contract expressly states that commission is discretionary, previous payments of commission establish no right to future payments and that the Respondent reserves the right to amend its commission policy.(b) Further, the Commission SOP Plan includes a disclaimer stating that commissions are discretionary and subject to change based on managerial decisions.[98]I then need to consider whether the terms of the Contract and the Commission SOP regarding discretionary commission payments were varied by the Side Letter. I accept the Claimant’s evidence that the terms of his secondment were important, and it is apparent that there was a process of dialogue between him and the Respondent regarding its terms prior to being finalised in the version dated 29 November 2017.[99]I find that the terms of the Side Letter had contractual effect and continued to have such effect in the period up to the Claimant’s resignation on 3 July 2019. I reach this finding based on the following: a) It provides that its terms are legally binding (clause 1). b) It provides that it continues on a rolling basis until the parties otherwise agree (clause 2). c) It provides for a substitution of clause 1.10.1 of the Contract for the duration of the secondment under the Side Letter and that the Claimant would continue to receive commissions due on UK accounts and receive 10% commissions on all new business from Canada (clause 4(e)). d) No variation of the Side Letter shall be effective unless it is agreed in writing and signed by the parties (clause 9).[100]It is, however, significant that the sub paragraph in respect of commissions in clause 4(e) refers to “this one-year secondment”. As this clause was inserted at the Claimant’s request, and the reference to a one-year secondment was included in the previous draft, I find this inconsistency between the other terms of the Side Letter continuing on a rolling basis and the express limitation of the entitlement to commissions to a one-year secondment as significant. Whilst I acknowledge this may have been because of an oversight on the Claimant’s behalf, I nevertheless need to interpret the terms of the contractual arrangements between the parties as written.[101]I consider that the express reference to a one-year secondment in the Side Letter, during which entitlement to commission would arise, is particularly significant in the context of the Respondent’s evidence, and particularly that of Mr Lobato, that this represented the Respondent’s practice. Further, this is relevant in my interpretation of what the parties would have intended by the drafting. - 18 - Whilst I was referred to what the Claimant says are disparate terms for Country Managers, I do not consider that any clear evidence exists that Country Managers transferred from previous sales-based roles continued to receive commission on a long-term basis. I rather find that the Respondent’s practice was that there would be an initial period, sometimes longer than one year, but not ongoing for significantly beyond two years, for a transition from remuneration, to include significant retrospectively earnt commission, to a system based on performance related bonuses.[102]I therefore find that when read in totality the terms of the Contract, the SOP Commission and the Side Letter did not provide for an ongoing entitlement to the payment of commission for the duration of the Claimant’s secondment to Canada as Country Manager. I therefore find that the proposed cessation, and then implementation of the cessation of commission, did not constitute a breach of an express term of the Contract and other contractual documents relating to his employment and secondment. Implied term of trust and confidence[103]As well as considering the express terms of the contractual documentation I need to consider whether by its actions in the communication and timing of the change to the Claimant’s remuneration the Respondent breached the implied term of trust and confidence. As I have set out in my findings of fact, I find that the Respondent was seeking to consolidate terms and conditions for its Country Managers to include the cessation of commission payments from 1 May 2019. I do not, however, find that Mr. Lobato’s communication regarding this change, during his short meeting with the Claimant on 10 May 2019, breached the implied term of trust and confidence. I reach this finding for the following reasons:(a) At that stage it remained a proposal, and the option would have existed for the Claimant to challenge the proposal or put forward a counter proposal or KPIs against which his entitlement to a quarterly bonus could be assessed, but he failed to do so.(b) Whilst the Claimant undoubtedly had a subjective perception that the proposed change was to his detriment, I do not consider it of a sufficient magnitude that considered objectively it was likely to destroy or damage the relationship of trust and confidence.(c) It is necessary to consider the alleged repudiatory breach from an objective perspective. In considering whether the Respondent conducted itself without reasonable and proper cause I need to consider the proposed change in the context of the framework of contractual documents. I find that moving the Claimant to what the Respondent says was a standard Country Manager package was a reasonable and proper cause for making the changes proposed.(d) Whilst the Claimant was undoubtedly surprised to receive his pay slip on 28 June 2019, I do not find that this was a sufficiently serious breach to constitute a reprediatory breach of his terms of employment. This is - 19 - based on my findings that the Respondent had the contractual discretion to vary, or cease, the payment of commission. Whilst the Claimant had an expectation that he would receive the higher salary with effect from 1 May 2019 as part of his June salary (and this was not paid) I find that this represented an oversight which would have been rectified by the Respondent on the matter being brought to its attention. This is consistent with the approach the Respondent took when the Claimant questioned shortfalls in his commission payments in the period up to 30 April 2019.(e) I do not consider the Claimant’s telephone conversation with Mr. Lobato and the email sent by Mr. Lobato on 1 July 2019 breached the implied term of trust and confidence. Whilst Mr Lobato’s initial reaction to the Claimant’s letter of 1 July 2019 was of annoyance, and arguably somewhat petulant, I do not find it to have been of a magnitude to breach the implied term of trust and confidence. I also find that by the time he sent his four-page letter on 1 July 2019 the Claimant’s mind was made up and therefore when he ultimately resigned on 3 July 2019, it was not in response to Mr Lobato’s conduct on 1 July 2019, but the implementation of a decision he had reached by the time he received his pay slip on 28 June 2019 or arguably earlier.(f) As I have decided that the Respondent did not breach an express or an implied term of the Claimant’s employment it is not strictly necessary for me to consider the question of affirmation or in respect of what matter the Claimant resigned. However, for completeness I will address these matters briefly. Affirmation[104]Had I found that the proposed change in remuneration communicated to the Claimant at the meeting on 10 May 2019 constituted a repudiatory breach I would have found that he had not affirmed this breach and the Contract by remaining in employment until his resignation on 3 July 2019. I would have reached this decision as result of the ongoing communications throughout June between the Respondent’s managers regarding changes to commission arrangements but also because of the impact of the change on the Claimant having crystalised on receipt of his pay slip on 28 June 2019. Reason for resignation[105]I do find that the Claimant resigned in response to his sense of grievance regarding the cessation of commission payments. This represents an important matter for him. I do not accept the Respondent’s suggestion that the Claimant manipulated a potential constructive dismissal situation to facilitate his exit and release from restrictive covenants with a view to joining a competitor.[106]It was also relevant that Mr Lobato was willing to discuss remuneration arrangements with the Claimant. In other words, it was not a done deal. First, he proposed quarterly rather than an annual bonus to address any cash flow - 20 - concerns the Claimant had. He was also willing for the Claimant to propose KPIs. Whilst it would not follow that there was a guarantee of the payment of a bonus equivalent to the Claimant’s commission if performance was poor this would in my view be consistent with the Respondent’s reasonable business objectives and the terms of its remuneration arrangements. It is also consistent with the terms generally applicable to Country Managers. The Respondent understandably considers that it is important that they are incentivised and remunerated based on their performance as Country Managers rather than being able to rely on an ongoing revenue stream based on past performance.[107]It is also relevant that Mr Lobato, once it became apparent as to the extent of the Claimant’s dissatisfaction, was willing for him to revert to his previous commission arrangements whether continuing in Canada or returning to London. Whilst I accept the Claimant’s grounds for rejecting a position in London as a Head of Desk as a demotion, he was not compelled to do this, it was merely an option presented to him, should he wish to return to London. He had the option of remaining in Canada for the duration of the secondment on his existing terms but nevertheless declined this.
Conclusion
[108]I therefore find that the claims for constructive unfair dismissal and wrongful dismissal fail and are dismissed.[109]It is, however, relevant to note that Mr Lobato confirmed in evidence that the Claimant could keep his shares and was not treated as a Bad Leaver, as would have been an option for the Respondent, but it exercised its discretion to allow him to retain his shares based on his contribution to the business and as an exercise of its good will towards him.
Conclusion
[1]Following an in person hearing between 9-11 December 2020 (the FMH) my reserved judgment was promulgated on 10 February 2021. The claims for constructive unfair and wrongful dismissal failed and were dismissed.[2]In an application dated 1 March 2021 the Claimant requested reconsideration of the Judgment (the Reconsideration Application). The Claimant set out the detailed grounds upon which his application was made.[3]The Respondent’s solicitors replied in a letter dated 29 March 2021 setting out the reasons why the Judgment should not be reconsidered.[4]I decided that given the complexity of the issues in the Judgment and the 39 paragraphs in the Reconsideration Application it would be appropriate for there to be a further hearing at which the parties would be given the opportunity to articulate their respective arguments. The parties agreed with my proposal.[5]The Claimant submitted a 58-paragraph rebuttal to the Respondent’s letter of 29 March 2021 on 4 September 2021 (the Claimant’s Rebuttal).
The Hearing
[6]The hearing was a remote public hearing, conducted using the cloud video platform (CVP) under Rule 46. The parties agreed to the hearing being conducted in this way.[7]In accordance with Rule 46, the Tribunal ensured that members of the public could attend and observe the hearing. This was done via a notice published on Courtserve.net. No members of the public attended the hearing.[8]The parties were able to hear what the Tribunal heard.[9]The participants were told that it is an offence to record the proceedings.[10]From a technical perspective, there were no major difficulties.[11]I was provided with a bundle of relevant documents for the hearing comprising of 216 pages. However, I was also in possession of the bundle of documents from the from the FMH together with my notes.
The Law
[12]I consider it appropriate to set out the relevant principles for a reconsideration application before considering the detailed grounds upon which the Claimant requests reconsideration.[13]Rule 70 of the Employment Tribunals (Constitution & Rules and Procedure) Regulations 2013 (the Rules) provides that on the application of a party a tribunal may reconsider any judgment where it is necessary in the interest of justice to do so. On reconsideration the original decision may be confirmed, varied or revoked. If it is revoked it may be taken again.[14]Reconsiderations are thus best seen as limited exceptions to the general rule that employment tribunal decisions should not be reopened and relitigated. It is not a method by which a disappointed party to proceedings can get a second bite of the cherry. In Stevenson v Golden Wonder Ltd [1977] IRLR 474, EAT, Lord McDonald said of the old review provisions that they were ‘not intended to provide parties with the opportunity of a rehearing at which the same evidence can be rehearsed with different emphasis, or further evidence adduced which was available before.[15]Instead, a tribunal dealing with the question of reconsideration must seek to give effect to the overriding objective to deal with cases ‘fairly and justly’ - Rule 2. This discretion must be exercised judicially.[17]I took account of the guidance from the relevant case law to include Flint v Eastern Electricity Board [1975] IRLR 277, that it was necessary to consider the interest of the applicant for reconsideration, the party which was successful at the original hearing and the public interest in the finality of litigation.[18]In Council of the City of Newcastle Upon Tyne v Marsden [2010] ICR 743 Underhill J reviewed the case law and concluded that the “interest of justice” confirms a broad general discretion which should not be encrusted with too much case law, and that whilst the interests of finality in litigation remained important, this was not a conclusive argument.[19]Mr Skinner argued that the circumstances in which reconsideration, as opposed to an appeal, was appropriate our inherently limited. He referred to Trimble v Supertravel Limited [1982] IRLR 451 as authority for the use of reconsideration being inappropriate to correct a major error of law. The Reconsideration Application[20]Mr Skinner in his submissions said that the Reconsideration Application contained seven grounds to which the Claimant added a further during his oral submissions. In summary the application is predicated on the Judgment being based on an erroneous interpretation of the relevant contractual provisions governing entitlement to commission and it being based on a case other than that pleaded by the Respondent.[21]With a view to keeping this judgment to a reasonable length it needs to be read in conjunction with the Judgment, the Reconsideration Application, the Respondent’s letter of 29 March 2021 and the Claimant’s Rebuttal.[22]I consider the most appropriate way of setting out my decision in relation to the Reconsideration Application is to deal with the various matters separately but setting out relevant passages from the Judgment and where necessary witness statements and documents from the FMH.[23]At the commencement of his submissions the Claimant said that contrary to assurances provided by Mr Lobato during the FMH (and is recorded at paragraph 109 of the Judgement) he had not been treated as a good leaver and nor had he received payment of Canadian $36,502.32 commission which the Respondent had acknowledged as owing. I emphasised that these were not matters which were relevant to my consideration on the Reconsideration Application. Addressing the issues as they appear in the Reconsideration Application Pleaded case (Paragraphs 9-17).[24]At paragraph 9 the Claimant asserts that the Tribunal at the FMH had indicated that it was necessary to consider very carefully whether a specific case was pleaded. I should clarify that the indication I provided at the start of the FMH involved consideration of what the issues were before the Tribunal. As a matter of fact, there was no agreed list of issues. However, the Claimant had prepared a document entitled “Claimant’s List of Issues” and the Respondent had prepared a document which included a list of issues.[25]I do not accept the Claimant’s assertion that my initial remarks involved an approach pursuant to which there would be a rigid adherence to precisely what was in the respective pleadings. My comments were more generic in terms of establishing what the issues were rather than at a more granular level of asserting that a very prescriptive approach would be taken to the pleadings as they related to each potentially relevant point in dispute.[26]In relation to paragraph 10 it is necessary to consider the relevant extract from the Grounds of Resistance. At paragraph 8: The Side Letter was expressed to be for a fixed period.[27]Mr Skinner refers to paragraph 4 of the Grounds of Resistance which is a standard denial stating, “save where it is expressly admitted or not admitted, each and every claim advanced by the Claimant is denied”. He says that the onus was on the Claimant to plead his case and that the Claimant had failed to do so. Further, he says that whilst not advanced in the Grounds of Resistance the argument regarding the retention of residual discretion under the Claimant’s contract of employment dated 26 October 2017 (the Contract) had been advanced both in cross examination and in closing submissions.[28]He refers to paragraph 12 in his submissions at the FMH which in which she stated that commission was discretionary, as set out at clause 1.12.1 of the Contract, and that the terms as to commission under clause 4(e) of the Side Letter dated 29 November 2017 (the Side Letter) is subject to and governed by the Contract.[29]I therefore consider that whilst the Respondent’s defence of the claim undoubtedly advanced from what was contained in the Grounds of Resistance to the arguments put forward by Mr Skinner at the FMH that he was doing no more than relying on the contractual documents as they existed and the interpretation which the Tribunal should place on them. I do not accept that the failure by the Respondent to specifically refer to clause 1.12.1 of the Contract and clause 4(e) of the Side Letter in the Grounds of Resistance deprived it of the opportunity to seek to rely on the operative contractual provisions.[30]I do not accept the Claimant’s contention that in construing the Side Letter and the Contract it is possible to confine the position as he asserts to clause 1.10.1 of the Contract (salary) and not consider the position in relation to clause 1.12 of the Contract (commission). The Claimant’s arguments in respect of repudiatory breach and constructive dismissal concerned commission and not basic salary and therefore I consider it necessary to interpret what contractual entitlement existed for ongoing payments of commission and the extent to which the Respondent had retained a contractual ability to vary such entitlements.[31]In relation to paragraph 16(a) I do not accept the Claimant’s assertion that the Respondent’s position as set out in paragraph 19 of the Grounds of Resistance is necessarily inconsistent with it having retained a residual discretion to make amendments to his entitlement to commission payments.[32]I consider it relevant to consider the totality of what was discussed between the Claimant and Mr Lobato at the meeting on 10 May 2019. This did not solely relate to entitlement to commission payment but rather considered the overall terms of the Claimant’s remuneration to include his receiving an increased basic salary, a discretionary bonus based on the Canadian business and eligibility for being granted equity.[33]In relation to paragraph 17 whilst it is acknowledged that an issue before the Tribunal involved whether the Claimant agreed to the changes at the meeting on 10 May 2019 that does not represent the totality of the matter. I do not consider it inconsistent to reach a finding on the one hand that the Claimant did not agree to unilateral changes but to then find that the changes did not give rise to a breach of an express contractual term given the interpretation reached in relation to the overall effect of the operative contractual provisions. The proper interpretation of the terms of the Contract as specifically amended by the Side Letter[34]I consider that paragraphs 18-20 have already been addressed above and therefore I will not repeat.[35]In relation to paragraphs 21-24 I have reconsidered the totality of the operative contractual provisions and remain of the view as to the interpretation I reached in the Judgement. I have placed limited weight as to exactly what the Respondent put to the Claimant in cross examination but rather consider that the question of contractual interpretation represents an objective matter for the Tribunal to interpret.[36]In relation to paragraph 25 the Claimant may well be correct that he did not request that clause 4(e) of the Side Letter be inserted. Nevertheless, it is material that there was a significant process of negotiation as to its terms between the Claimant and the Respondent between 3 November 2017 and 29 November 2017, during which various amendments were made, prior to the Side Letter being finalised.[37]It is relevant that version one of the Side Letter did not make any reference to commission payments. Version two and the final version included: “You will continue to receive commissions due to you on UK accounts and receive 10% commissions on new business from Canada for the duration of this one-year secondment”.[38]In paragraph 100 of the Judgment, I emphasised what I considered to be the significance of the express limitation of the entitlement to commissions on UK business to a one-year secondment as provided for by clause 4(e) of the Side Letter.[39]In relation to paragraph 28(b) I accept that there was no amendment to the provisions for commission at clause 1.12 of the Contract. Nevertheless, it is relevant that at clause 1.12.4 of the Contract the Respondent reserves the right to amend its commission policy from time to time. Therefore, the Side Letter, as read in conjunction with the Contract, provided the Respondent with a residual discretion to vary the terms of the commission policy. This residual discretion was not vitiated by the Side Letter.[40]At paragraph 31(d) it is acknowledged that the Respondent did not make a generic variation to its commission policy in relation to its UK Sales Team. However, I do not consider that this precluded the Respondent’s ability to make a variation specific to the circumstances of the Claimant given that the first 12 months of the Side Letter had expired, and the Respondent was seeking to vary his overall terms of remuneration to introduce terms, which it says would have been no less favourable and, in all probability, more advantageous, to reflect his position as a Country Manager.[41]More generally in relation to paragraph 31 if the Claimant’s assertions as to correct contractual interpretation are correct the effect would be that save with his express agreement the Respondent would be precluded from discontinuing his entitlement to UK commission until such time as all payments relating to UK business had ceased which would involve a period of five or more years. I consider this to be inconsistent with the express provision in clause 4(e) of the Side Letter that his entitlement to receive commission due on UK accounts was for the duration of “this one-year secondment”. It is relevant that clause 4(c) of the Side Letter provides that its terms shall apply for 12 months and will continue on a rolling basis until the parties agree otherwise.[42]At paragraph 32(c) I do not accept the Claimant’s contractual construction that the limitation for the duration of the one-year secondment is confined to the 10% commissions on all new business from Canada but that the entitlement to receive commissions from UK accounts was intended to apply indefinitely. Had that been the parties’ intention the clause would have been drafted differently and unambiguous language would have been used that for the duration of the secondment the Claimant would retain an absolute entitlement to UK commission payments. This would further have necessitated an amendment to those provisions in the Contract and SOP pursuant to which the Respondent retained a discretion to amend the Claimant’s entitlement to commission.[43]In relation to paragraph 32 it is acknowledged that the Claimant’s entitlement to UK commission payments continued after the expiry of a one-year period from the commencement of the Side Letter. I accept that this is a relevant consideration. I accept that there are grounds for the Claimant to assert that the Respondent had by its conduct accepted the rollover of the UK commission entitlements beyond the initial 12-month period of the secondment. Claimant’s Rebuttal Letter[44]To the extent not already covered above I address additional points as set out. In relation to paragraph 19 I do not accept the Claimant’s argument (and repeated elsewhere) that the effect of clause 4(e) of the Side Letter was to include the ongoing entitlement to UK commission payments as part of the Claimant’s basic salary which had been payable pursuant to clause 1.10.1 of the Contract. Whilst the drafting of the Side Letter could have been improved by the Respondent, I nevertheless do not consider that the reasonable interpretation of the relevant provisions in their entirety was that UK commission payments hence forward formed part of salary. Further consideration of the relationship between the Side Letter and the Contract[45]It is relevant that the opening paragraph of the Side Letter provides that it is subject to and governed by the Contract which was attached as schedule one.[46]Whilst I found in the Judgement that the Respondent had the residual contractual entitlement to vary, or discontinue, entitlement to UK commission I will for completeness consider what the position would have been had I not made this finding. Mr Skinner’s argument is that the outcome would almost certainly have been the same given my findings in relation to there not having been a breach of the implied term of trust and confidence as set out in paragraph 103 of the Judgment.[47]Not every unilateral variation by an employer of an express contractual term necessarily constitutes a repudiatory breach of contract. For example, an employee may have a contractual entitlement to payment of commission calculated pursuant to a particular formula, but the employer may decide that for business/commercial reasons an alternative basis of incentivising employees is more appropriate and unilaterally discontinue the existing scheme but replace it with an alternative which is not inherently less advantageous from the employee’s perspective. In these circumstances an employee may have a subjective perception that the terms are less favourable but whether the variation constituted a repudiatory breach would need to be considered from both a subjective and an objective perspective.[48]What I consider to be important is the effect of any actual or proposed change on the employee. If the Claimant’s contention were to be accepted that he had an ongoing entitlement to UK commission until such time as all outstanding payments had ceased, and this could only be varied with his consent, it would still be necessary to consider what the effect would be of the Respondent unilaterally replacing entitlement to commission payments with an alternative.[49]Whilst I found in the Judgment that the Claimant did not agree to the revised terms, I nevertheless found at paragraph 103 that the Respondent’s approach in seeking to consolidate terms and conditions for its Country Managers, to include the cessation of commission payments from 1 May 2019, did not give rise to a breach of the implied term of trust and confidence. Interpretation of Clause 1.12 of the Contract[50]One issue I did not consider in the Judgment is whether the Respondent reserved entitlement to amend its commission policy would apply to introducing a new policy going forward or whether it would extend to varying, or potentially discontinuing, the entitlement of employees to what in effect was already earnt commission but where it had not yet been drawn down. There is clearly a potential distinction between these scenarios. Nevertheless, I consider that the crucial question is not whether there is a variation but whether any variation gives rise to materially less advantageous terms from the perspective of the employee, both from a retrospective and prospective basis.[51]The Claimant’s argument would in effect mean that for an employee who is transferred to a different country they would automatically have an ongoing entitlement to UK based commission earnings for a period of five or more years. The argument being that this would apply regardless of what alternative terms the Respondent may propose in relation to the new place of business. I consider that it is reasonable for the Respondent in the circumstances to be able to argue that it has a discretionary ability to vary the terms of its incentive-based remuneration providing that when looked at objectively the revised terms are no less favourable than those which previously existed. Variation of the Judgement[52]I have decided that it would be appropriate to reconsider certain elements of the Judgement with the effect that the outcome is varied. Approach taken[53]In reaching this decision I have carefully considered the case law as to the circumstances in which reconsideration would be applicable. I have looked at the position in its totality to include reviewing the witness statements, relevant documents within the bundle for the FMH, the parties’ submissions and my notes of the evidence.[54]I have sought to avoid an overly prescriptive approach as to exactly what was contained in the pleadings and what was argued in the submissions at the FMH and looked at matters in the round. I consider that this is the only sensible way of approaching matters given that there are voluminous arguments and grounds of application made by the Claimant and counter arguments advanced by the Respondent as to why the Judgment should stand.[55]Specific paragraphs within the Reconsideration Application which I consider directly applicable to my decision to vary the Judgement include 30, 31, 32 (b) and (e), 34 and 35. I also took account of paragraphs 30, 34, 38, 39 and 44 in the Claimant’s Rebuttal. I refer to these paragraphs by way of indication of the more significant arguments I considered pertinent but nevertheless approached my review and reconsideration based on the totality of the material before me and the arguments advanced. Prejudice to Respondent[56]I do, of course, appreciate that this decision will cause considerable prejudice to the Respondent particularly in circumstances where it represents a reversal of a decision made eight months earlier. Nevertheless, in circumstances where I have concluded that there is no evidence of the Claimant’s agreement to a variation of his terms as they existed as of 30 April 2019, and the subsequent unilateral imposition of remuneration payments substantially to the Claimant’s disadvantage without alternative remuneration proposals being documented, the Judgement is no longer sustainable and should therefore be substituted with a finding that the Claimant’s dismissal was both unfair and wrongful. Summary of the grounds for the variation[57]This summary is intended to be read in conjunction with the revised judgement which is promulgated on even date.[58]Whilst most of the findings of the Judgment remain extant, I have nevertheless concluded on reconsideration based on the arguments advanced by the Claimant, and following careful reflection, that my conclusion that he resigned in circumstances that did not entitle him to resign because of a repudiatory breach of an express or implied term of the Contract should be revoked. This is for the reasons as set out above but set out in more detail in the paragraphs to be inserted by substitution or addition to the Judgement.[59]Whilst I retain my conclusion that the Respondent had the express contractual right under the Contract to make variations to the commission arrangements, I nevertheless consider that given the parties’ conduct in connection with the Side Letter, and specifically the continuing payment of UK based commission to the Claimant after the initial 12 months of the secondment was such to give rise to an expectation of the claimant that the existing terms would continue unless varied by consent. It was incumbent upon the Respondent, pursuant to the implied term of trust and confidence, to replace such arrangements with terms which looked at overall were no less favourable to an individual employee. In other words, a change, albeit one pursuant to a retained discretion, would nevertheless require either the consent of the employee or the change should be so obviously no less favourable that looked at objectively it would not breach the implied term of trust and confidence.[60]Absent a finding that the Claimant agreed to revised terms as proposed, whether at the meeting with Mr Lobato on 10 May 2019 or otherwise, there were no proposed alternative terms against which a comparison could be made as to whether they were, or were not, comparable to those which the Claimant benefited from prior to 1 May 2019. What happened was that the Respondent with effect from 1 May 2019 unilaterally replaced the Claimant’s existing terms, to include the cessation of entitlement to UK commission payments. This only became fully apparent to the Claimant on receipt of his payslip on 27 June 2019.[61]Whilst Mr Lobato says that the Claimant would as a Country Manager have had the opportunity to earn substantial bonuses and be granted equity which would have the effect of potentially making him “very wealthy”, this was without tangible evidence. The Claimant had not received a formal proposal as to what the terms would comprise. I consider that it would have been appropriate for the Respondent to have fully documented the revised terms and discussed them with the Claimant.[62]Obviously in these circumstances the Claimant would have had the option of accepting the revised terms, seeking to negotiate them, or rejecting them and stating that he wished to remain subject to the existing contractual terms.[63]In these circumstances the Respondent may then have said that the option of remaining on the existing terms was not acceptable. It could then have offered the Claimant the opportunity of continuing employment on the revised terms. In circumstances where he rejected those terms and resigned a tribunal would have had to consider whether the offer of the new terms breached an express contractual provision and/or whether their imposition without the Claimant’s agreement breached the implied term of trust and confidence. The Respondent could potentially have relied on some other substantial reason to justify the unilateral imposition of the new terms, but this would have been subject to giving the Claimant notice under the existing contract and offering continuing employment on the revised terms.[64]What I find happened is that the Claimant remained in a state of limbo between his meeting with Mr Lobato on 10 May 2019 and his resignation on 3 July 2019.[65]I therefore consider it appropriate to substitute the following paragraphs in the Judgment by way of reconsideration.[66]Paragraph 102 should be substituted and replaced by the sequence of paragraphs set out below.[67]New paragraph 102: I find that when read in totality the terms of the Contract, the SOP Commission and the Side Letter did not provide for an indefinite ongoing entitlement to the payment of commission for the duration of the Claimant’s secondment to Canada as Country Manager. Nevertheless, I accept the Claimant’s analysis that contrary to the Respondent’s assertion the secondment was not for a fixed period. Whilst it contains reference to a one-year term it was self-evidently envisaged by the parties that it would continue a rolling basis until terminated by the parties or varied by their agreement.[68]New paragraph 103: I consider that given the parties’ conduct in connection with the Side Letter, and specifically the continuing payment of UK based commission to the Claimant after the initial 12 months of the secondment was such to give rise to an expectation of the Claimant that the existing terms would continue unless varied by consent. It was incumbent upon the Respondent, pursuant to the implied term of trust and confidence, to replace such arrangements with terms which looked at overall were no less favourable to him. In other words, a change, albeit one pursuant to a retained discretion, would nevertheless require either the consent of the Claimant or the change should be so obviously no less favourable that looked at objectively it would not breach the implied term of trust and confidence.[69]New paragraph 104: I find it to be significant that after the initial 12-month period of the secondment on 26 October 2018 the Claimant continued to be employed on the existing terms notwithstanding that clause 4(e) of the Side Letter provides that entitlement to receive commissions due to the Claimant on UK accounts and receive 10% commissions on new business from Canada was for the duration of the one-year secondment.[70]New paragraph 104: I accept the Claimant’s contention that there is potential ambiguity as to the meaning of this clause as in whether the reference to a one-year secondment was to commission on Canadian business alone or whether it also applied to commission on UK accounts. However, the reality is that by the course of conduct in the rollover of the terms beyond the initial 12-month period the parties’ demonstrated an intention that those terms remained operative, and would continue to be operative, subject to the overarching terms of the Contract. This would continue until a variation was agreed between the parties as provided for by clause 4(c) of the Side Letter, and as reflected in clause 9, that there should be no variation of the Side Letter unless it is in writing and signed by the parties. No such variation took place and there is no evidence of any documentation to this effect.[71]New paragraph 105: I do not accept the Claimant’s assertion that the wording of clause 1.10.1 of the Side Letter had the effect that commission payments to which he was entitled, whether on UK accounts or on new business from Canada, became “salary” as per clause 1.10.1 of the Contract. Whilst it is true that all elements of remuneration, to include commission payments, fall within the broad umbrella of salary I do not consider that the effect of the Side Letter was to convert what were otherwise commission payments, and thereby subject to the Respondent’s retained overarching discretion, to fixed salary payments.[72]New paragraph 106: The Claimant asserts that the entitlement to commission under clause 1.12 of the Contract relates to a debt which was already in existence and due to him at the date of the Contract. I do not accept that this necessarily precluded the Respondent’s ability to make changes to the terms at its discretion but nevertheless I consider that a distinction exists between a variation to already accrued, or in the process of being accrued, commission and making a variation solely in respect of the terms upon which future incentivisation would be provided. Commissions are regarded by the Respondent as earned or locked in when booked. This creates a distinction from purely discretionary payments but rather a situation where there is an expectation of an employee such as the Claimant that there would be commission payments made in accordance with a pre-agreed formula based on trades over previous years. In other words, this is a factor making it even more important that the Respondent carried out a proper process of consultation with the Claimant prior to the implementation of such a change and either obtained his express consent to the varied terms or imposed the terms having given a notice of its intention to do so.[73]New paragraph 107: I therefore find that the cessation of the payment of commission, without a detailed written proposal of alternative terms being provided to the Claimant and either agreed by him, or rejected without good reason, constituted a breach of the express and implied terms of his employment, based on an interpretation of the Side Letter in conjunction with the Contract, but also considering the implied term as to how the Respondent should affect any variation to existing terms based on the parties’ conduct of the relationship and their expectations based on their course of conduct. I therefore find that the unilateral imposition of the revised terms gave rise to a repudiatory breach of contract entitling the Claimant to resign and claim constructive dismissal.[74]New paragraph 108: Whilst I have found that the Respondent retained an overarching discretion to make amendments to its commission arrangements, I nevertheless find there was an implied term that any such variations would be made following appropriate consultation with the Claimant given that the commission element of his remuneration was significant and by the parties’ course of conduct of continuing its payment after the initial 12 months of the secondment and thereby giving rise to a legitimate expectation of the claimant that it would continue until revised by consent or at least following detailed proposed alternatives and negotiation. Whilst I do not find that the Respondent was precluded from making such changes, I do find that it was necessary for the Respondent to consult with the Claimant and provide him with written specifics of the alternative remuneration proposals intended to replace those which were extant as of 30 April 2019. The Respondent failed to do so.[75]New paragraph 109: What in effect took place was that Mr Lobato, and more generally the Respondent, assumed that the Claimant had acquiesced to the change but without having provided anything more than very general assurances that the Country Manager remuneration would provide him with significant upside potential. As set out above the process should, in my view, have entailed notification being given to the Claimant that the change would take effect from a specified date and his written consent being requested and obtained to the revised terms.[76]New paragraph 110: I consider it to be significant that the Respondent’s letter of 17 June 2019 setting out the revised salary did not include a replacement Side Letter and/or Contract and made no reference to a cessation of existing commission arrangements nor their replacement by any alternative scheme of incentive-based remuneration.[77]New paragraph 111: At no time after the review meeting on 10 May 2019 did the Respondent set out in writing any proposed variation to the Side Letter or the Contract. No offer of employment on standard Country Manager terms, including specific provisions for bonuses, quarterly or annually and equity was made to the Claimant.[78]New paragraph 112: What I find happened is that the Claimant remained in a state of limbo between his meeting with Mr Lobato on 10 May 2019 and his resignation on 3 July 2019.[79]New paragraph 113: I consider that receipt of his statement of earnings of 27 June 2019 was significant in the Claimant’s realisation of what was in effect a unilateral change to his remuneration. It is relevant that Aliz Simon confirmed that the Claimant had not been paid commission from both the UK and Canada of $ 21,575.92. It is therefore incontrovertible that there was a very significant reduction in the Claimant’s monthly earnings in June 2019 without any tangible replacement being offered or agreed.[80]New paragraph 114: Whilst I accept that the Respondent’s practice may have been that Country Managers only continue to receive commission based on UK business for a finite period, typically between 12-18 months, I nevertheless find that this would have been a change requiring consent or the imposition of revised terms but needing to be documented. Absent documentation it could not be assumed, as the Respondent appeared to do, that the Claimant had acquiesced to the changes. Paragraph 103 of the judgement and the implied term of trust and confidence[81]Whilst I acknowledge that the Claimant has not sought reconsideration of my findings at paragraph 103 of the Judgment, I nevertheless consider that my conclusion that there was no breach by the Respondent of the implied term of trust and confidence can no longer stand given my finding in relation to the construction of the express contractual terms and the conduct of the parties and the Claimant’s reasonable expectations. I have found that whilst the Respondent retained an overarching discretion to make changes to the commission terms that the Claimant had a reasonable and continuing expectation that the existing commission payable on UK business would continue notwithstanding the initial one-year period of the Canadian secondment having expired until such time as it was replaced by agreement or with the Respondent giving notice of the imposition of revised terms from a specified date.[82]In these circumstances I find that the change was unilaterally imposed and that this was in breach of both the express contractual terms but also the implied term of trust and confidence. As such whilst the Claimant did not seek reconsideration of paragraph 103 it follows automatically in view of my finding as to the prevailing express contractual position as of 30 April 2019 that the findings in relation to some elements of the application of the implied term can no longer stand and are accordingly revised.[83]In view of the above I do not consider that paragraph 103(b) remains sustainable and should be substituted to read: The Claimant undoubtedly had a subjective perception that the proposed change was to his detriment. Whether the proposed Country Manager terms would, or would not, have been equivalent to those the Claimant currently enjoyed is incapable of being answered as it solely involves the assertion of Mr Lobato that other Country Managers enjoyed extremely generous terms pursuant to which they became very wealthy. This may well have been the case. However, the Claimant was entitled to receive properly particularised proposed alternative terms which he could review and as appropriate seek to negotiate. No such opportunity was provided before the Respondent imposed a variation to the prevailing terms and I consider that in doing so the Respondent breached the implied term of trust and confidence.[84]Paragraph 103(c) should be substituted to read: It is necessary to consider the alleged repudiatory breach from an objective perspective. In considering whether the Respondent conducted itself without reasonable and proper cause I need to consider the proposed change in the context of the framework of contractual documents. Whilst I find that proposing to move the Claimant to what the Respondent says was a standard Country Manager’s package was a reasonable and proper cause, I nevertheless find that doing so unilaterally without his consent was in breach of the implied term of trust and confidence.[85]Paragraph 103(d) should be substituted to read: The Claimant was undoubtedly surprised to receive his payslip on 28 June 2019. This showed a significant reduction in his overall remuneration to include the failure to pay any commission. I find this to have been evidence of the Respondent’s unilateral imposition of new terms and conditions in circumstances where there had been no unequivocal agreement from the Claimant to the revised. Whilst Mr Lobato may well be correct in asserting that he believed the Claimant was happy with the revised terms there was nevertheless a failure to properly document what was proposed. The Respondent’s letter to the Claimant dated 17 June 2019 advising that his salary had been increased to $202,800 was insufficient as it merely increased his basic pay but not to a sufficient extent to be commensurate with the foregone UK and Canadian commission payments. At no point had the Claimant provided his agreement to this and certainly not in written form. I consider that given the potential magnitude of the change as it existed, and without the proposed new terms having been documented that his written consent was required. Paragraph 103 (f) should be deleted.[87]A new paragraph should be added after that concerning affirmation to read: Given that that the financial impact of the unilateral change to the Claimant’s remuneration only became apparent to him on 28 June 2019 I do not consider that sufficient time had elapsed for him to have affirmed the Contract in the absence of any positive actions pursuant to which his affirmation could be construed.[88]Paragraph 108 should therefore be substituted to read: I therefore find that the claims for constructive unfair dismissal and wrongful dismissal succeed. Remedy hearing[89]Mr Skinner argued that it would be prejudicial to the Respondent, and use valuable Tribunal time, if there needed to be a further remedies hearing. I do not accept this. The delay between the FMH and the reconsideration hearing is not the Claimant’s fault. Indeed, it was partly delayed because of Mr Skinner’s non availability for a significant period in the early summer of 2021 and further because of my absence on holiday.[90]I do not consider it would be appropriate for remedy to be determined based on evidence given at the FMH. There would be a real risk of findings and conclusions being made which did not properly reflect the evidence given the lapse of time. I therefore consider that it would be in accordance with fairness to both parties, and the overriding objective, for a remedy hearing to be listed if the parties cannot reach agreement.[91]For the avoidance of doubt the Judgment will be re-promulgated, together with this judgment on reconsideration, to reflect the changes set out above. The date of the Judgment will be of even date with this judgment on reconsideration.[92]The Judgement is therefore revoked and replaced by the judgement dated 3 October 2021.