Mrs A Saunders v Rainbow Corner Day Nursery: 3310499/2023

EMPLOYMENT TRIBUNALS

Case No 3310499/2023

Between

Mrs A SaundersClaimant

Rainbow Corner Day NurseryRespondent

Before

Employment Judge R Wood

In person for claimant

Mr P Sangha (instructed by Counsel) for respondent

Date 12 August 2024

JUDGMENT

The claimant was unfairly dismissed by the respondent. DECISION Claims and Issues

[1]Page numbering referred to in square brackets in these reasons are to pages in the bundle, unless otherwise stated.

[2]This a claim of unfair dismissal, brought by the claimant, Mrs Saunders, against the respondent, Rainbow Corner Day Nursery. In brief terms, the claimant says that she was constructively unfairly dismissed in that the respondent made a unilateral decision to demote her from her post as Under 2’s room leader. The claimant asserts that she resigned in response to this demotion a number of months later. The respondent denies that the claimant was dismissed. It states that there was a misunderstanding, and that the claimant was not demoted. The respondents asserts that it had concerns about the claimant’s performance, which were reasonable, and that it only proposed to reassign her to an alternative role. It suggest that it anticipated that the clamant would go away and give the proposal some thought in the light of the discussions. It was not a fait accompli, as alleged by the claimant. Procedure, Documents and Evidence Heard

[3]The Hearing took place on 24-25 June 2024. The claim was heard via a remote CVP hearing. I first of all heard testimony from the claimant, Mrs Saunders. I then heard from respondent’s witnesses: Susan Grove (early years teacher); Sandra Hope (assistant manager); Mrs Debbie Hemmins (nursery manager); Ms Sarah Warner (chair of the management committee); Ms Gillian Morris (management committee member); and Mrs Henstridge (deputy under 2’s room leader). Each of the aforesaid witnesses adopted their witness statements and confirmed that the contents were true. I also had an agreed bundle of documents which comprises 146 pages. I was also sent an additional version of the document at B44 and B66 i.e. a record of the meeting on 18 November 2022., which will be referred to as ‘S1’.

[4]I also heard helpful submissions from the claimant, and Mr Sangha, who expanded upon his written submissions dated 25 June 2024.

[5]In coming to my decision, I had regard to all of the written and oral evidence submitted, even if a particular aspect of it is not mentioned expressly within the decision itself. Legal Framework 5. The relevant case law in relation to unfair dismissal is to be found in the Employment Rights Act (“ERA”) 1998 at section 98: “General(1) In determining for the purpose of this part whether the dismissal of an employee is fair or unfair it is for the employer to show– (a) the reason (or if more than one, the principal reason) for the dismissal, and (b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.

(2) A reason falls within this subsection if it- (a) relates to the capability of qualifications of the employee for performing work of the kind which he was employed to do, (b) relates to the conduct of the employee, (c) is that the employee was redundant, or (d) is that the employee could not continue to work in the position which he held without contravention (either on his part or on that of his employer) of a duty or restriction imposed by or under an enactment.”

[6]In terms of the law applicable to the question of constructive dismissal and affirmation, I have applied the following principles, distilled from the case of Leaney v Loughborough University

[2023] EAT 155

, and the references to other authorities referred in that judgment.

[7]The starting point is that, where one party is in fundamental breach of contract, the injured party may elect to accept the breach as bringing the contract to an end, or to treat the contract as continuing, requiring the party in breach to continue to perform it – that is affirmation. Where the injured party affirms, they will thereby have lost the right thereafter to treat the other party’s conduct as having brought the contract to an end (unless or until there is thereafter further relevant conduct on the part of the offending partythere is no suggestion of that in this case).

[8]The innocent party may indicate by some express communication that they have decided to affirm, but affirmation may also be implied (that is, inferred) from conduct. Mere delay in communicating a decision to accept the breach as bringing the contract to an end will not, in the absence of something amounting to express or implied affirmation, amount in itself to affirmation. But the ongoing and dynamic nature of the employment relationship means that a prolonged or significant delay may give rise to an implied affirmation, because of what occurred during that period.

[9]In particular, acts of the innocent party which are consistent only with the contract continuing are liable to be treated as evidence of implied affirmation. Where the injured party is the employee, the proactive carrying out of duties falling on him and/or the acceptance of significant performance by the employer by way of payment of wages, will place him at potential risk of being treated as having affirmed. However, if the injured party communicates that he is considering and, in some sense, reserving, his position, or makes attempts to seek to allow the other party some opportunity to put right the breach, before deciding what to do, then if, in the meantime, he continues to give some performance or to draw pay, he may not necessarily be taken to have thereby affirmed the breach.

[10]When an employer commits a repudiatory breach there is naturally enormous pressure put on the employee. If he or she just ups and goes they have no job and the uncomfortable prospect of having to claim damages and unfair dismissal. If he or she stays there is a risk that they will be taken to have affirmed. Ideally a wronged employee who stays on for a bit whilst he or she consider their position should say so expressly. But even that would be difficult and it is not realistic to suppose it will happen very often. For that reason the law looks carefully at the facts before deciding whether there has really been an affirmation.

[11]An employee with long service might reasonably need longer to make up her mind. But the matter is fact sensitive. The tribunal needs to consider the nature of what is at stake for the particular employee in the particular case and the practical implications of the decision whether or not to resign for that particular employee. In a given case lengthy service might provide the context for other more specific factors, such as whether the employee would be abandoning a secure and stable job that would be difficult to replace, or whether resigning would entail the loss of valuable benefits that had been built up over time, and would be hard to replicate. Findings

[12]Based on the evidence that I heard and read, the Employment Tribunal made the following primary findings of fact relevant to the issues that I had to determine.

[13]The claimant was employed by the respondent in 1995. Her employment came to an end on 28 April 2023. As of 18 November 2022, the claimant was employed as the Under 2’s Room Leader. The respondent is a small nursery. At the material time, it had a manager, Mrs Debbie Hemmins; a assistant manager, Mrs Sandra Hope; an early years teacher, Mrs Grove; the under 2’s room leader (the claimant); and the pre-school team leader, Becky Hemmins. The latter three posts reported to the manager/assistant manager. Below that level of management were the nursery teachers. The claimant therefore occupied a management position. She was invited to management team meetings held weekly. Leadership/management responsibilities made up a significant part of her role. By reason of this, and her length of service, she was a senior member of staff.

[14]In the few years prior to 18 November 2022, there had been some issue raised about the claimant’s performance. I accept that some members of staff had mentioned the issue of the claimant’s management style. This included Mrs Henstridge, who was the Under 2’s deputy room leader at the time. I also accept that the claimant experienced some difficulties with Mrs Henstridge. However, it is impossible for me to go any further with findings on this issue since no-one lodged a formal complaint prior to 18 November 2022; nothing was put in writing to speak of; and there was no investigation of the matters. I note that when told on 18 November 2022 that the claimant had been ‘demoted’, that Mrs Henstridge was shocked and that she had thought that things were absolutely fine between her and the claimant. I accept this evidence in its generality.

[15]On 18 November 2022, the claimant was called into a meeting with Mrs Grove and Mrs Hope. It had been scheduled as an appraisal so far as the claimant was concerned. The notes of this aspect of the meting are at [B45]. There were some critical observations as to the claimant’s management technique. However, towards the end of the meeting, and without notice in my judgment, there was a further discussion about the organisation of the baby room leadership.

[16]This is the critical part of the evidence in many ways. There is dispute about precisely what was said. The claimant suggests, in summary, that she was presented with a 'fait accompli’, a done deal as it were, that she would be stripped of her leadership role, and placed into a co-ordinator role for the 18-24 month old age group, albeit she was to remain on the same terms and conditions otherwise.

[17]For their part, the respondent’s witnesses all told me that a proposal to this effect was put to the claimant, and that she was given time to consider the suggestion and then discuss it further with the respondent. In other words, that it was far from a done deal.

[18]On this important issue, I prefer the claimant’s evidence. I found the evidence of the respondent’s witnesses to be vague and unconvincing. The witness statements of Mrs Grove and Mrs Hope barely touch upon the actual content of the meeting itself, or how matters were explained to Mrs Saunders. There are various version of the record of the meeting made by Mrs Hope which appears at S1, [B44] and [B66]. I had understood this to be a note of the meeting of 18 November 2022. However, it is clear that it was an evolving document, partly completed before the meeting, but in large part after the event, about matters which occurred after 18 November 2022. It has been updated which means that it is not a contemporary note of what was said on 18 November. In so far as it is a record of what was said at the meeting, it is also rather vague. It is surprising that a proper contemporaneous note was not made of such an important meeting. What record exists is clearly tainted by subsequent events in my view.

[19]However, taken as a whole, it is my view that the general tone of the document (all three versions), and the language it uses, are more consistent with the claimant’s recollection of the meeting than with the respondents’ witnesses.

[20]By contrast to the respondent’s witnesses, the claimant has been consistent and clear throughout. She left the meeting clearly very upset by what had been said. On the next working day, she told her colleagues that she had been, in her eyes, demoted. This is not consistent with it having been merely suggested that she relinquish her leadership role. I note that there was no real attempt by the respondent to correct the message the claimant was broadcasting to staff on 21 November. It seems that the respondent’s approach did not alter until Mrs Warner took some legal advice on the situation about a week later, after the claimant had gone on leave, on a trip to Australia for a month.

[21]I am also satisfied that the claimant was given the version of the document at B44 to sign during the meeting, as well as a copy of the appraisal document. The claimant has been consistent about this namely, that she refused to accept the change of role and refused to sign it. I note that she was not cross-examined about this by Mr Sangha. However, Mrs Grove and Mrs Hope both denied she had been given a copy of this document. As stated, I accept that this document evolved during the few days following the meeting on 18 November. The claimant told me that she asked for changes to be made, mainly to the bullet points at the top of the document. She then signed the amended version during the following week, on 23 November 2022. This is the version at B44. However, the document was created before the meeting. It is dated 18 November 2022. It was clearly envisaged by Mrs Hope that the claimant would sign it to indicate agreement to the change. I find that it is more likely than not that she was asked to sign and refused, at which point she left the meeting.

[22]Returning to the timeline, the claimant came into work on the following Monday, 21 November 2022, which was the next working day for her. As stated she told her colleagues that she had been demoted. She told me that she felt this was appropriate, notwithstanding that she had been told by the respondent that she could tell them that she had stood aside of her own volition. The claimant thought it was important to tell the truth. She also thought it necessary to tell them first thing on Monday because they were asking her questions as if she remained the room leader, when in her view she was not.

[23]There was no substantive discussion or meetings between the claimant and respondent in the week commencing 21 November 2022, although the claimant attended work as normal. She signed her appraisal form and the document at [B44]. She also submitted a letter on the same day which is at [C75], in which she again repeated that she had been demoted. I have not read or listened to any evidence which suggests the respondent took issue with this at the time. The claimant stated “I hope we can move forward from now as I have been demoted”. She said she was looking forward to working in the New Year with a new room leader. She said she was sorry that she was not able to stand down, but she could not lie to her staff.

[24]She was off sick on the following Monday, and then left for Australia. She did not return to the UK until 29 December 2022, and not to work until 3 January 2023. Whilst away, Mrs Hope sent the claimant a text message saying they had taken legal advice and that a meeting would be organised on her return. She was told that “no further action” would be taken until this meeting. Again, this was not consistent with the respondent’s case that the question of the reorganisation had been left with the claimant for her consideration in the first place.

[25]That meeting was held on 3 January 2023, with Mrs Hope and Mrs Warner. It was suggested that on reflection, the respondent wanted to work with the claimant to resolve the concerns raised in her appraisal and that they would like her to continued as room leader with a performance improvement plan. The claimant raised concerns about her working relationship with Mrs Henstridge, and it was decided to hold a mediation meeting between the two of them.

[26]On 6 January 2023, the claimant went to see Mrs Hope and explained that she had taken some advice and needed more time to decide what to do. She refused to join other staff on the Christmas outing.

[27]On 9 January 2023, the respondent conducted a mediation between Mrs Henstridge and the claimant. The former indicated that she did not have any problems with the latter. The claimant also discussed her mental health problems and suggested that she needed support.

[28]There was a meeting with the claimant on 11 January 2023, when she said she was feeling much better and that she had had a good week in the baby room. She also suggested that she needed more time to consider her position On 16 January 2023, a performance improvement plan (PIP) was written up. The claimant was given a copy of the PIP a few days later.

[29]On 23 January 2023, the claimant went to her GP complaining of symptoms related to anxiety and stress at work. There is a letter from her GP, Dr Hoy, at B59. It is apparent from Dr Hoy’s letter that the claimant had explained to him that the symptoms stemmed from the meeting on 18 November 2023. I accept that the claimant did not have mental health issues prior to that meeting, and that the problems she experienced thereafter were the direct result of the events of 18 November 2022. I find that the claimant experienced symptoms such as stress, anxiety, low mood, sleeplessness and headaches.

[30]As a result of her meeting with, and advice from, her GP, the claimant told the respondent on 27 January 2023 that she wished to move to the coordinator role. She felt anxious about getting things wrong. She was asked to reconsider by the respondent in the hope that the PIP, and the process associated with it, would remove her stress and anxiety.

[31]There was a further PIP meeting on 30 January 2023, at which the claimant again expressed the wish to step down from the leadership role for the sake of her mental wellbeing. She stated she was worried about being told off each day. She told me at the hearing that she felt sick coming into work every day but that she felt better once the days had started. In her view, there remained an underlying feeling that the respondent would repeat what it had done on 18 November. I accept this evidence. It was also explained to the claimant that if she stepped down, she may well have to work under Mrs Henstridge as room leader. The claimant expressed the view that this would be inappropriate. The matters were to be reviewed on 10 February 2023.

[32]On that occasion, the claimant again repeated the advice of her GP, and that she had the worry that her job would be taken away again. As she put it, “the seed had been planted” and that it was human nature to remember the negative. It was suggested by the respondent that she have a period as shared room leader. The claimant requested a ‘time out’ from the team leader role to enable her to concentrate on her mental health and then return to the role the she felt recovered.

[33]On 13 February 2023, the claimant wrote to the respondent explaining that she wished to stand down as baby room leader [C76-77]. She stated this was due to the stress and anxiety she was experiencing, and that she was doing it on her doctor’s advice. She attributed these symptoms to the ‘demotion’ and the immediate aftermath. As she put it in the letter, and as she repeated in her evidence to the Tribunal, she could not get the events of November out of her head, and was waiting every day for them to do it again. She indicated that she would continue to carry out the role of coordinator for the 18-24 month age group and be a key worker. The claimant reiterated all this at a meeting on 24 February 2023.

[34]There was a meeting held between the respondent and the claimant on 2 March 2023 [B54]. The claimant again complained that she felt she had been demoted and that it would be unfair to allow Mrs Henstridge to benefit from instigating many of the problems in the baby room by making her room leader. She remained of the view that she wished to change her role. The claimant worked as a coordinator from 13 March 2023 to 30 March 2023, which was her last day at work for the respondent. I note at [B58] that the claimant expressed a sense of relief at the change.

[35]The claimant’s submitted a resignation by letter dated 3 April 2023 [C79]. She gave a months notice, for which she was absent due to ill health. She explained she was resigning as a result of her mental health conditions. On the same day, the claimant also submitted a grievance. There was a meeting with the claimant on 13 April 2023 at which she was asked to change her mind. She refused to do so again referring to her mental health.

[36]The respondent accepted her resignation by letter dated 19 April 2023 [C83]. There was a grievance meeting on 24 April 2023. The outcome letter is dated 4 June 2023 [C99].

[37]It is important to note that throughout the period 3 January 2023 to 3 April 2023, the claimant was at work (save a for a few days of absence), performing her contacted duties, whether as room leader, or as coordinator.

[38]The claimant quickly found a new job after leaving the respondent’s employment. She applied for a role as a shop assistant at a farm shop on or around 6 April 2023, and started working there on or around 13 April 2023.

[39]Mrs Henstridge took over as baby room leader in or around March 2024. In the interim, she had acted up in the role. Reasons and Decision Unfair Dismissal

[40]The primary issue in this case was whether there was a dismissal. In other words, whether there was a fundamental breach of the contract of employment by the respondent which entitled the claimant to accept it’s repudiation; and also whether the claimant had, notwithstanding, affirmed the contract prior to resigning.

[41]I turn first to the question of whether there was a repudiation of the contract. It is suggested that the alleged conduct by the respondent constituted a fundamental breach of the implied term requiring the parties to the contract of employment not to act in a way likely to damage their relationship of trust and confidence.

[42]The answer to this question is largely dictated by the findings of fact above in the sense that if the discussion on 18 November amounted to a proposal to reorganise the baby room as alleged by the respondent, then there could be no fundamental breach of the implied term of the contract such as might constitute a repudiation by the respondent.

[43]However, as I have already indicated, I prefer the claimant’s evidence on this point. It is my judgment that the respondent informed the claimant of it’s intention to unilaterally change her terms and conditions by changing her role. She was taken wholly by surprise about this change. From her perspective, it had come out of the blue. I am satisfied that to some extent, the respondent’s witness’ believed that the question of the claimant’s purported shortcomings as the under 2’s room team leader were genuine and had been raised sufficiently so as to justify the reorganisation they intended i.e. to move the claimant to a coordinator role.

[44]However, this belief was born out of a lack of proper consideration of the circumstances, and a deficiency of employment law expertise. The only significant mention of performance concerns apparent from the documentation in this case is in the claimant’s appraisal of 2021, some 12 month before the relevant matters. It is difficult to see these as anything other than the sort of typical observational and constructive discussions one often finds gets in appraisals. There was no attempt in my view to escalate these matters. The capability policy was not engaged. There is nothing here that might have put the claimant on notice that she was the subject of, or in danger of being the subject of, formal proceedings by her employer in respect her work as under 2’s room leader. I take the view that is is trite to observe that good practice made the application of the policy an important pre-requisite of the change which the respondent sought to impose on capability grounds.

[45]The respondent asserts that the respondent was justified in doing what it did on 18 November because a number of staff under the claimant had raised concerns as to her abilities as room leader. As I have found, it is difficult to assess the nature and extent of these concerns because nothing was put in writing by the employees concerned (assuming complaints were made at all), and the respondent failed to document any action taken as consequence. As I understand matters, there is no suggestion that the claimant was ever asked to respond to any complaints, or that she was even made aware of them. I also note that Mrs Henstridge, who was identified by the respondent as one of the more discontented members of staff, expressed surprised that it had been proposed that she be moved out of her role, and thought that her relationship with the claimant was ‘absolutely fine’.

[46]Accordingly, it is my impression that the significance of these ‘complaints’ has been exaggerated somewhat by the respondent in order to bolster the justification for a decision about which the respondent itself quickly had grave reservations. In my judgment, the action taken by the respondent was in flagrant breach of it’s own written policy and good industrial relations practice in terms of performance management. It was the result of a certain amount of naivety. I note that the only one of the respondent’s witnesses who appeared to have any employment law/HR background was Mrs Morris, who did not join the management committee of the respondent until after the relevant events had transpired.

[47]I am satisfied that the reason for the decision was, at least in part, that the management was concerned about succession planning. It is expressly mentioned in the document at [B44]. They were keen to see Mrs Henstridge take over the baby room. She was younger than the claimant, and was the daughter of the the existing manager, Mrs Hemmins. No one else was interviewed for the role, which Henstridge now occupies. I note that Mrs Hemmins’ other daughter is pre-school team leader. In my view, it is these factors which provide the important context to what is otherwise a difficult process to understand. Having said that, if they had taken legal advice before, rather than after the meeting of 18 November, then the problems would likely have been averted. Instead, it did not do so until the end of November/early December when it was too late.

[48]For all of the reasons set out, I am satisfied that the conduct of the respondent amounted to a fundamental breach of the implied term, and repudiation of the contract of employment. In context, this was particularly so given that all agreed that the nursery was run on a ‘family’ basis. The bonds were close between the staff. This made the breach of trust on 18 November more surprising, and perhaps explains the nature of the claimant’s reaction to it. The change would clearly have been seen as a demotion by the claimant and all of the other staff. Even if not a reduction in wages, the role of coordinator was likely to be perceived as a less senior role, with less status than role of under 2’s room leader. For someone with the claimant’s length of service, she could hardly see the change as anything other than criticism of her performance, and as a demotion. I was surprised that the respondent’s witnesses continued to argue this aspect fo their case at the hearing.

[49]I make clear that the repudiation took place on 18 November 2022. There are no allegations of later breaches of the implied term by the claimant.

[50]I must then address the submission made by Mr Sangha, in the alternative, that the claimant affirmed the contract between the 18 November 2022 and the time of her resignation on or about 3 April 2023. Mr Sangha provided very helpful written submissions on this and other issues. He made a very plausible argument that the claimant had, by reason of her conduct, affirmed the contract. However, having carefully considered his arguments, I have concluded that the claimant did not affirm the contract. It was a finely balanced decision on this issue. My reasons for finding against the respondent are as follows.

[51]The tribunal must to focus the question of what conduct there had been during the relevant period that might or might not have amounted to an express or implied communication of affirmation. From the respondent’s point of view, there are a number of factors militating towards affirmation. In broad terms, the claimant continued to work, and to be paid wages. She was next in work on 21 November 2022 when she requested a document S1 in writing, which following amendments, was signed by her on 22 November.

[52]The Claimant was on annual leave and overseas between 29.11.2022 and 29.12.2022 but she was back in work on 3 January 2023. On that day she agreed to continue as under 2’s room leader, and to engage in a personal improvement plan (PIP) and mediation with Mrs Henstridge.

[53]On 20 January 2023, there was a PIP Review meeting which noted positive improvement. In meetings in January, the claimant expressed the desire to move to the coordinator role. A further PIP review meeting was scheduled for 10 February 2023 at which the claimant again suggested changing roles. The respondent proposed adopting a situation in which she wold share the under 2’s room leader role with Mrs Henstridge for six weeks.

[54]On 24 February 2023 at a follow-up meeting, the claimant confirmed that she wished to step down from her room leader role due to stress and anxiety. On 9 March 2023, there was a ‘Tracking Meeting’ which concerned the monitoring of children’s progress and the targets. On 20 March 2023 the claimant discussed her health with her GP, who advised she should be signed off as sick. However, the claimant wished to continue working. As stated, it was not until the first week of April that the claimant resigned, which was about four and half months after 18 November. She was away from work in Australia for about 5 weeks of that period. Nonetheless, it is a significant amount of time in the context of an argument about affirmation, during which she has continued to work, and has been remunerated. She has positively engaged with the respondent who, rather belated, in effect began to implement its performance policy from January onwards.

[55]The law looks very carefully at the facts before deciding whether there has really been an affirmation. But there is no doubt that this conduct could be seen as conduct which implicitly indicated affirmation of the contract. However, what is important in this type of appeal is to see the evidence in it’s appropriate context.

[56]It is my view that looked at in the round, the evidence in this case depicts an employee who has “stayed on for a bit whilst he or she considers their position” (to quote Jacob’s in the case of Bournemouth University Higher Education Corporation v Buckland

[2010] EWCA Civ 121

). In the first instance, I have come to to this conclusion by reason of the length of claimant’s service and the nature of her employment. She had been employed by the respondent for about 28 years. Much of this period was as room leader. The nursery operated like an extended family. This was not in issue. This was reflected in the impact the events of 18 November had on the claimant, who I find was devastated. Her reactions was genuine and profound. She told me that losing that job affected her mental health, and resulted in her consulting her GP and being treated for stress related symptoms. It was apparent that she remained deeply affected even at the hearing. She explained to me that she lived near to the nursery, and found that after the relevant events she was unable to even walk past the nursery on a day to day basis. It was clear that she had seen herself as finishing her working life with the respondent, in a job that she clearly loved. There was no suggestion she was not good with the children for which she cared.

[57]Notwithstanding the nature of the breach on 18 November, it is my view that she could not reasonably have been expected to immediately walk away. It was employment she valued very highly, and given her age, might find it difficult to replace. To the claimant, this was clearly a vocation, and not just a job.

[58]Secondly, I find that this case falls with a category anticipated by the judgment in Leaney in which it was stated: “As discussed in Brooks at [30], where an employee postpones resigning in order to pursue a contractual grievance procedure which might lead to a resolution of their concern, that will generally not amount to an affirmation. Rather, the employee should be treated as continuing to work and draw pay for a limited time while giving the employer the opportunity to put matters right. So, in the present case, some consideration needed to be given to whether, although he did not say in terms that he was working under protest, the claimant could be said to have been working on while he allowed the respondent some opportunity to try to address his concerns in some way through these negotiations, before deciding whether to resign.”.

[59]In my view, what the respondent does from 3 January onwards is to belatedly adopt a capability performance policy. It also initiates a mediation between the claimant and Mrs Henstridge, aimed in part at addressing the grievances that the former had against the latter. It was, in my judgment, an attempt by the respondent to repair the damage to the relationship between employer and employee. If you like, it was designed to rebuild trust destroyed by what had happened on 18 November. This was likely to have been a long process, with limited prospects of success. As the claimant repeatedly put it to me, and the respondent at the time, “the seed has been planted” and “it's human nature to remember the negative”. The claimant stated that only time and positive experience would ease her feelings. She told me at the hearing that she felt sick coming into work every day. There remained an underlying feeling that the respondent would repeat what it had done on 18 November.

[60]She repeatedly attributed mental health symptoms to the ‘demotion’ and the immediate aftermath. As she put it in the letter [C76], and as she repeated in her evidence to the Tribunal, she could not get the events of November out of her head, and was waiting every day for them to do it again. I accept that her GP was advising the claimant to be off sick, and that against the doctors view, she continued to engage in the process. However, the claimant always gave the impression that she remained deeply affected by the events of 18 November, and that her decisions were informed by the impact of that day, and the consequences for her sense of wellbeing.

[61]In her resignation letter, she makes clear that she was resigning as a result of her mental health conditions caused by the events of 18 November [C79]. In my judgment, there is no sense that the claimant either expressly or implicitly affirmed the breach of 18 November, rather she made space for the respondent to attempt to put right it’s repudiatory behaviour. The impression given by the claimant’s conduct, express and implicit, is that the respondent remained on trial with a view to fixing the damage to the relationship of trust. When it became clear that this would not happen by reason of her health conditions, then she resigned. Looked at in the round, and in context, the evidence in this case is not sufficient to establish affirmation by the claimant.

[62]In summary, there was a dismissal as a matter of law in this case by the respondent. The question remaining is whether it was unfair. I deal with this aspect of the claim fairly briefly. It was not part of Mr Sangha’s submissions that this might still be characterised as a fair dismissal if it was the case that the respondent was found to be in fundamental breach of the implied term. It was my impression he did not seek to argue this as part of his case.

[63]In any event, I am not satisfied that the principal reason was related to capability. It may have been part of the reason, but it was not the main or principal reason. I am satisfied that the main reason was to do with succession planning. The respondent’s intention was to have Mrs Henstridge as under 2’s room leader, as she was younger and was Mrs Hemmins’s daughter. She was seen as providing a better future for the nursery, whether rightly or wrongly. As I have said, any queries as to the claimant’s performance were exaggerated. In my view, this reason was not a potentially fair one.

[64]In any event, even if the reason for the dismissal was genuinely one related to capability, and therefore potentially fair, then in the circumstances of this claim the respondent did not act reasonably in treating the reason as sufficient to dismiss. I accept that the respondent was a small business run on family style lines, with a certain informality perhaps not entirely inappropriate for a nursery.

[65]However, I find that the respondent failed to warn the claimant and gave her inadequate chance to improve what were perceived to be her deficiencies in performance terms. As already stated above, the respondent failed to present cogent evidence of failures in her performance. What was stated by the witnesses about this was simply not corroborated by the documentary evidence. The respondent had completely failed to apply it’s own policy in this regard. In effect, the decision made by the respondent to dismiss the claimant was both substantively and procedurally unfair and fell outside the range of reasonable decisions that an employer might have made in the circumstances.

[66]In summary, the claim of unfair dismissal is allowed.

[67]There will need to be a remedy hearing in this claim. I will make directions for the preparation of this hearing by separate case management order.