Mr J Thumwood v Wooden and Steel Ship Repairs Ltd: 6003240/2024
EMPLOYMENT TRIBUNALS
Case No 6003240/2024
Between
Mr J ThumwoodClaimantWooden and Steel Ship Repairs LtdRespondent
Before
Employment Judge YallopIn person for claimantMr Sam Fulford (Director (instructed by the Respondent)) for respondentDate 7 March 2025
JUDGMENT
[1]The Respondent was in breach of contract by dismissing the Claimant without sufficient notice.[2]The Respondent is ordered to pay to the Claimant the sum of £1,750, being damages for the breach of contract. This figure has been calculated using gross pay to reflect the likelihood that the Claimant will have to pay tax on it as Post Employment Notice Pay.[3]The Respondent unreasonably failed to comply with the ACAS Code of Practice on Disciplinary and Grievance Procedures 2015 and it is just and equitable to increase the award payable to the Claimant by 10% in accordance with s 207A Trade Union & Labour Relations (Consolidation) Act 1992.
REASONS
Oral reasons were delivered on 28 February 2025, but written reasons were requested by the Respondent at the end of the hearing in accordance with Rule 60 of the Employment Tribunals Rules of Procedure. The following reasons are therefore provided:
Introduction
[1]Mr Thumwood was employed by the Respondent, Wooden & Steel Ship Repairs Ltd, as a general skills worker from 30 October 2023. On 27 February 2024 he was dismissed for reasons connected with poor performance, and was told he would work one month’s notice. However, on 28 February 2024, the Respondent informed him that he would not be permitted to work his notice.[2]The Respondent subsequently paid Mr Thumwood £585, which the parties agree constitutes one week’s gross pay. Mr Thumwood claims that the Respondent breached his contract by dismissing him without sufficient notice.[3]The Respondent contests the claim. It says that Mr Thumwood had repudiated the contract, and the Respondent was therefore entitled to dismiss him without notice.
The hearing
[4]I heard the claim on 28 February 2025. Mr Thumwood represented himself. The Respondent was represented by Mr Fulford in his role as Director. Mr Thumwood and Mr Fulford both gave sworn evidence. There were no other witnesses for either party.
Preliminary matters
[5]Before I heard any evidence, I dealt with a preliminary matter relating to the parties’ preparation for the hearing. On 14 November 2024, the Tribunal had ordered the parties to provide a paginated and indexed bundle of documents, and a witness statement for each of the witnesses. The parties had sent a number of documents to the Tribunal, but had not created a bundle. Mr Fulford had also not provided a witness statement.[6]I listed the documents that I had before me, and the parties agreed that there was nothing missing that I needed to see, and that they also had copies of the same documents. I explained to the parties that under Rule 6 of the Employment Tribunals Rules of Procedure 2024, I could take such action as I considered to be just in respect of their failure to comply with case management orders, including waiving a requirement. I said that my provisional view was that it would be in the interest of justice to proceed with the hearing on the basis that both parties knew what the case was about and had seen all of the relevant documents, and that adjourning the case would cause delay. In respect of Mr Fulford’s witness statement, I explained that we could adopt the information in the response form as constituting his evidence in chief, but that he would have an opportunity to add to it, if necessary, and would be questioned by Mr Thumwood about it. Both parties agreed that the hearing should proceed on that basis. I therefore decided that it would not lead to any prejudice and was in accordance with the overriding objective to waive the requirements with which the parties had not complied, and to proceed with the hearing.
Issues
[7]I explained that as the hearing was a short one and the amount at issue was well-defined, I was intending to deal with liability and remedy together. The parties confirmed that they were content with that approach.[8]I then agreed with the parties that the issues I needed to determine were as follows: a) The parties agree that Mr Thumwood’s contractual notice period was one month, and he was paid one weeks’ notice. Was the Claimant guilty of gross misconduct or did he do something so serious that the Respondent was entitled to dismiss him without notice? b) The Respondent alleges the following were repudiatory breaches of contract: i) The Claimant provided misleading information on his CV and in his interview about his qualifications, skills and experience. This breached the implied term of mutual trust and confidence. ii) The Claimant’s work was grossly negligent. This breached clause 2.2 of the contract, which required him to carry out his duties to what the Respondent considered ‘to be an acceptable standard’. iii) The Claimant was planning to fabricate a personal injury claim against the Respondent. This breached the implied term of mutual trust and confidence. iv) The Claimant’s discussion about bringing a fabricated personal injury claim was the last straw, and the Claimant’s conduct viewed together constituted a repudiatory breach of the implied term of mutual trust and confidence. c) If the Claimant succeeds, how much should he be awarded as damages? d) Did the ACAS Code of Practice on Disciplinary and Grievance Procedures apply? e) If so, did the Respondent unreasonably fail to comply with it by not meeting with him to discuss his grievance, or giving him the opportunity to appeal against the grievance outcome? If so, is it just and equitable to increase or decrease any award payable to the Claimant and, if so, by what proportion up to 25%?
Findings of Fact
[9]The relevant facts are as follows. Where I have had to resolve any conflict of evidence, I indicate how I have done so at the material point.[10]Mr Thumwood was employed by the Respondent as a general skills worker from 30 October 2023 until 28 February 2024. His gross salary was £20,080 a year.[11]Mr Thumwood’s contract of employment stated he was entitled to one month’s notice. The parties agreed at the hearing that if Mr Thumwood was entitled to contractual notice, the amount of notice he should receive would be one month’s notice.[12]Mr Fulford gave evidence that at the start of Mr Thumwood’s employment, he was happy with Mr Thumwood’s work, as he worked well enough with simple tasks. However, when Mr Thumwood was asked to do more complex work on a client vessel called the Somerset, serious concerns were raised about the quality of his work. Mr Fulford gave evidence that one of these errors was that Mr Thumwood incorrectly fitted the bow thruster unit. Had this not been discovered in time, it could have caused a major fire onboard, potentially leading to loss of life.[13]Mr Thumwood did not dispute that his work on the Somerset was inadequate. He gave evidence that he was inexperienced and had made mistakes. He said that he told Mr Fulford that he had not done anything on the scale of the Somerset before, but that he was willing to work on it on the basis that an experienced colleague would be checking it. Mr Fulford gave evidence that he would not have asked Mr Thumwood to work on the Somerset had Mr Thumwood expressed a concern about his experience to do it. I find on the balance of probabilities that the conversation did occur, as Mr Fulford agreed in his evidence that it was usual practice for work to be checked in this way and I found Mr Thumwood to be an honest witness.[14]After Mr Thumwood’s mistakes on the Somerset had been discovered, the parties agree that Mr Fulford and Mr Thumwood had a meeting to discuss his errors, at which Mr Thumwood was able to persuade Mr Fulford to give him another chance. Mr Fulford confirmed that he decided to mitigate the risk to the Respondent by only giving Mr Thumwood work on company vessels. However, Mr Fulford continued to find Mr Thumwood’s work to be inadequate and on 27 February 2024, Mr Thumwood was dismissed for reasons connected with poor performance, and was told he would work his one month’s notice. Mr Thumwood accepted that he made mistakes and said in his evidence that he took the job with the Respondent because he wanted to learn and improve his skills and he understood there would be support at the Respondent to do so. I therefore accept Mr Fulford’s evidence, which Mr Thumwood does not dispute, that Mr Thumwood’s work continued to be inadequate after the incident with the Somerset.[15]Mr Fulford gave evidence that Mr Thumwood’s poor performance led him to believe that Mr Thumwood lied on his CV and in his interview about his abilities, skills and experience. Mr Fulford pointed to the part of Mr Thumwood’s CV that recorded Mr Thumwood’s work as a race fleet refit engineer, and particularly to the part about his duties including ‘12 and 24v electrical systems, all aspects from alternators to bilge pumps’. Mr Thumwood gave evidence that his CV did accurately reflect his experience. He said that it was just the highlights and might paint him in a slightly better light than is true, but the duties were what he had done in his jobs before. Mr Fulford argued that in saying this Mr Thumwood was admitting that he lied on his CV. When asked to clarify what he had meant, Mr Thumwood explained that he had meant his CV put his best foot forward, but none of it was untrue. I accept Mr Thumwood’s account, which accords with what I consider to be a generally accepted understanding of how CVs work, i.e. that they highlight those aspects of a person’s work experience that are the most advantageous when applying for a particular role. I find that Mr Thumwood’s CV did only include duties he had previously carried out.[16]In relation to Mr Thumwood’s interview with the Respondent, Mr Fulford said he spoke to Mr Thumwood about his experience with 12 and 24 volt electrical systems, as Mr Fulford already knew the Respondent needed someone to work on the Somerset. Mr Thumwood and Mr Fulford agreed that the Somerset was a 48 volt system, which Mr Thumwood had not stated he had prior experience of mending. Mr Fulford said that this did not matter, as the principles are the same, so if Mr Thumwood had worked on 12 and 24 volt systems, he should have been able to manage the Somerset. I accept Mr Thumwood’s evidence that he had not worked on anything of the Somerset’s scale and that there was a difference between the experience he had said he had and what he was asked to do. I accept that he agreed to stretch himself because his work would be being checked by a qualified electrician. I accept this because Mr Thumwood’s CV specifically refers to 12 and 24 volt systems, Mr Fulford had previously confirmed that it was standard process to have worked checked in that way, and I found Mr Thumwood to be a reliable witness.[17]On 28 February 2024 - which was the first day on which Mr Thumwood was working his notice period - Mr Fulford gave evidence that he overheard Mr Thumwood having a conversation with his colleague Elliott about a former employee of the Respondent named Josh. Mr Fulford explained that Mr Thumwood had been talking about an accident that Josh had fabricated after being given a written warning, which Josh had then relied on to bring a personal injury claim against the Respondent. Josh’s claim was eventually found to be false, but at that time it was still being dealt with by the Respondent’s insurers. Mr Fulford said he did not think Mr Thumwood knew Josh and when he heard him saying he was going to contact him, Mr Fulford became terrified that Mr Thumwood was also planning to fabricate a claim. He therefore told Mr Thumwood that he would not be able to work his notice and escorted him off site.[18]Mr Thumwood accepted that his conversation with Elliott about Josh took place. He said that he knew Josh, as he had worked with him for a few weeks at the start of his employment. Elliott had pointed out that Josh might have leads on some work, so had suggested Mr Thumwood gave Josh a call. Mr Thumwood also accepts that in his conversation with Elliott, he may have discussed Josh’s claim against the Respondent. However, Mr Thumwood denies that he had any intention of fabricating a personal injury claim himself.[19]Mr Fulford explained in his evidence that Mr Thumwood did not specifically say he was considering making a personal injury claim, and Mr Fulford accepted that he had not asked Mr Thumwood to explain his conversation with Elliott. Mr Fulford also admitted that he might have misinterpreted the discussion between Mr Thumwood and Elliott because at the time he was scared to death of having another fabricated personal injury claim brought against the Respondent.[20]I find that Mr Thumwood’s discussion with Elliott did not indicate that he was planning to fabricate a personal injury claim. I accept his account that he discussed contacting Josh because he knew him and was looking for work. That is consistent with what Mr Fulford said he heard, it makes sense that Mr Thumwood would be looking for work after having just been dismissed, and I found Mr Thumwood to be an honest witness. Although I accept that Mr Fulford genuinely believed that Mr Thumwood was considering emulating Josh, viewed objectively, Mr Thumwood’s conversation with Elliot did not suggest that Mr Thumwood had that intention.[21]On 28 February 2024, Mr Fulford emailed Mr Thumwood confirming the dismissal and setting out examples of Mr Thumwood’s poor performance, which he stated he considered to be gross negligence. In that email, Mr Fulford confirmed that in his view the Respondent was under no obligation to give Mr Thumwood notice, but said that through his generosity, Mr Thumwood would be paid one week’s pay in lieu of notice. Mr Fulford also referred to ‘health and safety concerns in the shipyard’ as being the reason why Mr Thumwood could not work his notice. Mr Fulford made it clear at the hearing that this related to his concern that Mr Thumwood was intending to fabricate a personal injury claim.[22]The parties agree that after his dismissal, Mr Thumwood received one week’s pay in lieu of notice, being the sum of £585.[23]On 9 April 2024, Mr Thumwood raised a grievance. The email was entitled ‘Notice pay grievance’ and in the body of the email Mr Thumwood wrote: ‘Please consider this email to be the start of the formal grievance procedure’. It was therefore clear that Mr Thumwood was raising a formal grievance. Mr Fulford responded in writing on 15 April 2024. He did not hold a meeting with Mr Thumwood to discuss his concerns and Mr Thumwood was not offered the opportunity to appeal. Mr Fulford gave evidence, which I accept, that the Respondent does not have a grievance policy, that he did not realise that an ex-employee could bring a grievance and that he did not think a meeting was necessary.[24]Mr Thumwood confirmed that he did not secure new employment until 3 months after his employment with the Respondent terminated. I accept this assertion. The Respondent did not suggest that Mr Thumwood had failed to mitigate his loss. Relevant law and conclusions – breach of contract[25]It is for the employer to prove that the employee is in fundamental breach of contract. The Tribunal must make its own determination as to whether objectively the employee was in repudiatory breach entitling the employer to bring the contract to an end summarily (Shaw v B and W Group Ltd EAT 0583/11).[26]In relation to the breach of an express term of a contract, general contractual principles apply. The employer’s right to summarily dismiss an employee is restricted to cases where there is repudiation or fundamental breach of contract by the employee (Laws v London Chronicle (Indicator Newspapers) Ltd 1959 WLR 698).[27]It is well established that the parties in an employment relationship owe a duty to conduct themselves in a way that preserves trust and confidence in the relationship (Malik v Bank of Credit and Commerce International SA (in compulsory liquidation) 1997 ICR 606). The implied term of mutual trust and confidence is regarded as being so fundamental that its breach will invariably repudiate the contract. The question for the Tribunal to determine is whether the employee’s conduct "so undermine[s] the trust and confidence which is inherent in the particular contract of employment that the [employer] should no longer be required to retain the [employee] in [the] employment" (Neary v Dean of Westminster [1999] IRLR 288, approved by the Court of Appeal in Briscoe v Lubrizol Ltd [2002] IRLR 607 and by the Privy Council in Jervis v Skinner [2011] UKPC 2).[28]It is not only deliberate wrongdoing that can breach the implied term of mutual trust and confidence. In Adesokan v Sainsbury's Supermarkets Ltd [2017] EWCA Civ 22, Elias LJ explained that “Dishonesty and other deliberate actions which poison the relationship will obviously fall into the gross misconduct category, but so in an appropriate case can an act of gross negligence.” In the latter case, the question is whether the negligent dereliction of duty was "so grave and weighty" as to amount to a justification for summary dismissal.[29]A breach of the implied term of trust and confidence may consist of a series of actions on the part of the employee that cumulatively amount to a repudiation of the contract (Kearns v Glencore UK Ltd [2013] EWHC 3697). The Court of Appeal in Omilaju v Waltham Forest London Borough Council 2005 ICR 481, confirmed that, to constitute a breach of trust and confidence based on a series of acts, the act constituting the last straw must contribute, however slightly, to the breach of the implied term of trust and confidence. An entirely innocuous act cannot be a final straw, even if the injured party genuinely but mistakenly interprets the act as hurtful and destructive of his or her trust and confidence. In Kaur v Leeds Teaching Hospital NHS Trust [2018] 4 All ER 238, the Court of Appeal concluded that an employee who is the victim of a continuing cumulative breach of contract is entitled to rely on the totality of the employer’s acts notwithstanding a prior affirmation by the employee. This principle can also be applied where an employer is seeking to rely on a cumulative breach of contract by an employee.[30]An employer faced with a repudiatory breach by an employee can either affirm the contract and treat it as continuing, or accept the repudiation and terminate the contract, which results in summary dismissal.[31]Applying the law to the facts, I have concluded as follows: a) I found that Mr Thumwood did not provide misleading information on his CV and in his interview about his qualifications, skills and experience. Mr Thumwood therefore did not breach the implied term of mutual trust and confidence in that regard. b) I have found that Mr Thumwood’s work was inadequate. However, I do not find that it was so bad as to constitute a repudiatory breach of contract. Whilst the incident with the Somerset was serious, Mr Fulford was sufficiently reassured at the meeting on 17 January 2024 that he allowed Mr Thumwood to continue in the role and mitigated the risk by limiting Mr Thumwood’s work to company vessels. No formal disciplinary action was taken against Mr Thumwood at that stage. I therefore find that Mr Thumwood’s inadequate work on the Somerset was not so grave and weighty as to justify summary dismissal. I also find that even if Mr Thumwood’s work on the Somerset had been so poor as to be grossly negligent and a repudiatory breach of contract, by allowing him to continue to work for another 6 weeks, the Respondent affirmed the contract. c) In respect of Mr Thumwood’s inadequate work on the Somerset and on company vessels, I find that he was in breach of clause 2.2 of his employment contract, which required him to carry out his duties to what the Respondent considered 'to be an acceptable standard'. However, I have found that his work on simple tasks was adequate. I therefore conclude that the Respondent gained some benefit from the contract and Mr Thumwood’s poor performance did not constitute a repudiation. d) I have found that Mr Thumwood was not planning to fabricate a personal injury claim against the Respondent, and that his conversation with Elliot on 28 February 2024 did not objectively suggest that he was intending to do so. That conversation therefore did not breach the implied term of mutual trust and confidence. In addition, as it was entirely innocent, the conversation did not form a part of a course of conduct which, viewed cumulatively, amounted to a repudiatory breach of trust and confidence.[32]In summary, I find that there was no justification for Mr Thumwood to be summarily dismissed and his claim for breach of contract therefore succeeds. Relevant law and conclusions – remedy[33]The purpose of awarding damages for breach of contract is to put the employee in the position they would have been if the contract had not been breached.[34]Mr Thumwood did not secure another role during what would have been his notice period and the Respondent did assert that he failed to mitigate his loss. I therefore find that Mr Thumwood is entitled to receive the notice pay that he would have received had he not been summarily dismissed in breach of contract. The parties agree that a month’s gross pay in lieu of notice amounts to £2,340 and that Mr Thumwood has already received £585 in lieu of notice. I therefore award the balance, being £1,755. This is awarded gross to reflect that Mr Thumwood is likely to have to pay tax on the award.[35]Turning to the ACAS Code, s207A(2) Trade Union and Labour Relations (Consolidation) Act 1992 provides that if it appears to the Tribunal that the ACAS Code of Practice applies, the employer has failed to comply with that Code, and that failure was unreasonable, the Tribunal may, if it considers it just and equitable in all the circumstances, increase any award it makes to the employee by no more than 25%. When deciding whether the failure was unreasonable, Tribunals will take into account all of the circumstances, including the size and resources of the employer.[36]In Slade and anor v Biggs and ors 2022 IRLR 216, the EAT held that any uplift must reflect ‘all the circumstances’, including the seriousness of and/or motivation for the breach, and it set out a four-stage test to assist employment tribunals in assessing the appropriate percentage: a) is the case such as to make it just and equitable to award any uplift? b) if so, what does the Tribunal consider a just and equitable percentage, not exceeding, although possibly equalling, 25%? c) does the uplift overlap, or potentially overlap, with other general awards, such as injury to feelings in discrimination claims? If so, what in the tribunal’s judgment is the appropriate adjustment, if any, to the percentage of those awards in order to avoid double-counting? d) applying a ‘final sense-check’, is the sum of money represented by the application of the percentage uplift arrived at by the Tribunal disproportionate in absolute terms? If so, what further adjustment needs to be made?[37]I find that the ACAS Code applies in this case and that the Respondent did unreasonably fail to comply with it by not having a grievance process in place; not conducting a meeting with Mr Thumwood regarding his grievance; and not giving Mr Thumwood the opportunity to appeal against the grievance decision.[38]It is a basic principle that an employer should have a process in place to deal with grievances, as is reflected by s3 Employment Rights Act 1996. The Respondent confirmed on its ET3 that it employed 9 people, across more than one site, so I find that it was unreasonable that it did not comply with this requirement. I also consider that it is just and equitable to award an uplift in this case, as there is no good reason why the Respondent did not have a grievance process in place, and if it had done so (and it had complied with that process), Mr Thumwood would have had the opportunity to refute the Respondent’s justifications for summarily dismissing him, including explaining his conversation with Elliott. However, I accept that the Respondent is a small company and note that Mr Fulford did reply to Mr Thumwood’s grievance via email. I therefore award a 10% uplift in respect of the failure, which comes to £175. Approved by: Employment Judge Yallop 7 March 2025 Judgment sent to Parties on 09 April 2025 By Mr J McCormick Notes All judgments (apart from judgments under Rule 51) and any written reasons for the judgments are published, in full, online at https://www.gov.uk/employment-tribunal-decisions shortly after a copy has been sent to the claimants and respondents. If a Tribunal hearing has been recorded, you may request a transcript of the recording. Unless there are exceptional circumstances, you will have to pay for it. If a transcript is produced it will not include any oral judgment or reasons given at the hearing. The transcript will not be checked, approved or verified by a judge. There is more information in the joint Presidential Practice Direction on the Recording and Transcription of Hearings and accompanying Guidance, which can be found here: www.judiciary.uk/guidance-and-resources/employment-rules-and-legislationpractice-directions/