UNITED BANK LTD v MR S AKHTAR [1989] UKEAT 230_88_1210

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [1989] UKEAT 230_88_1210Case No Appeal No. UKEAT/230/88
Between
UNITED BANK LTDAPPELLANTMR S AKHTARRESPONDENT
Before
Mr Justice Knox Mr T S Batho Ms D WarwickDate 12 October 1989
[1]MR JUSTICE KNOX : This is an appeal by United Bank Ltd from the decision of the Industrial Tribunal sitting at Leeds on 16 December 1987 and on 3 February 1988, when written submissions were considered, that Mr. Akhtar, an employee of the appellant Bank was unfairly dismissed. Full reasons were asked for and were sent to the parties on 4 March 1988. The question whether or not Mr. Akhtar was unfairly dismissed was accurately identified by the Industrial Tribunal as turning on a constructive dismissal claim that he made under Section 55 (2)(c) of the Employment Protection (Consolidation) Act 1978. An employee is to be treated as dismissed by his employer if:
"the employee terminates that contract, with or without notice, in circumstances such that he is entitled to terminate it without notice by reason of the employer's conduct."
The Tribunal held that Mr. Akhtar satisfied that requirement. They made it clear, as was common ground at all times, that the entitlement that is referred to in Section 55 (2)(c) is an entitlement under the common law and that the essentials that have to be shown for constructive dismissal to be established are authoritatively summarised in Western Excavating (ECO Ltd v Sharpe (1978) ICR 221 . Mr. Akhtar was an employee of the Bank at the bottom of their employment structure. He was paid some £560 a month gross and £450 a month take-home pay. He had been employed by the Bank since October 1978 and the events in question which led to what the Industrial Tribunal held was a constructive dismissal occurred in June and July of 1987. There was an internal Bank document, which spoke of Mr. Akhtar's services in laudatory terms which the Industrial Tribunal accepted, saying that although he had had some time off because of illness from time to time, he was nevertheless an excellent man at his job and thought well of by his manager at Leeds. His family circumstances were in early June not easy because his wife had lately had a miscarriage and there were two small children in the family already. Mr. Akhtar's own contract of employment was not proved in evidence but it was accepted on all sides that it was in the same terms as another contract that is in evidence, which sets out in two parts, first the terms and conditions of employment of an employee of the appellant Bank and, secondly, service rules and regulations of that Bank. The clauses which have been the subject of express consideration in the terms of employment are only two in number. One, clause 12, dealing with future alterations in terms of employment, provides:
"Any future alterations in the terms of employment will be notified to the Employee in writing as and when they take place, and the document notifying the changes will form part of the Terms and Conditions of Employment. The Employees (sic) will have 28 days to raise any objections and will be deemed to have agreed to the change should no objections have been received by the end of that period."
Clause 13 is central to this case, it reads as follows and I make a clerical insertion which it was common ground before us should be made of the word "may" as the third word of the clause:
"The Bank may from time to time require an employee to be transferred temporarily or permanently to any place of business which the B Bank may have in the United Kingdom for which a re-location allowance or other allowances may be payable at the discretion of the Bank. The salary and allowances of any employee so transferred may be adjusted at the discretion of the Bank."
The service rules and regulations contain one paragraph lettered "P.", headed "Transfer", which reads:
"Unreasonable refusal by an employee to accept transfer to another place of business of the Bank in accordance with the Terms and Conditions of Employment may result in dismissal."
This case essentially turns on the question whether the Bank was in repudiatory breach of contract as a matter of common law in the way in which it sought to exercise its powers under Clause 13 of the Terms of Employment. It was accepted very properly by Mr. Lynch that very short notice was given and that no offer of relocation allowance or other allowances was made by the Bank. A fortiori, no such allowance was made. We can dispose at once of one possible argument, which does not figure in the Industrial Tribunal's decision and that is that Clause 12 governed the exercise of the powers in Clause 13. We accept Mr. Lynch's submission for the purposes of this appeal, that Clause 12 is concerned with an alteration in the terms and conditions of employment which do not, in fact, include the place where an employee is to be employed and do not directly govern the operation of Clause 13. In so finding we should make it clear that we have not, in fact, heard argument in favour of the proposition that Clause 12 is of significance in this case. It was not, in fact, mentioned in the papers relating to this issue but we need not take further time on that aspect of the matter because it is not on that aspect that our decision is based. The facts, as Mr. Lynch in his helpful submission said to us, are fairly plain. Mr. Akhtar was required by a notice in writing sent from the Bank's headquarters to the branch where he worked in Leeds, to move to Birmingham on 8 January. That is to say, to take up his duties in Birmingham on that day. That notice was dated 2 June and, although the Bank's documentation suggests that a carbon copy was intended to be sent to Mr. Akhtar, there is a finding that it was only an oral intimation that he received of its receipt by the Manager of the Leeds Branch. There is no doubt but that he did learn on 2 June that he was being required to remove his activities to Birmingham because he wrote a letter that very same day addressed to his manager at Leeds, saying amongst other things:
"I understand from the order that I have to report to Birmingham Branch with immediate effect."
He then draws attention to the family problems which I have mentioned as to his wife's medical condition and also that he had back trouble and that he was, by coincidence, in the process of selling his house, although not, of course, at that stage with any intention of going to Birmingham as a result of that sale. He concluded his letter by saying:
"Therefore, I am requesting you to seek a stay in the transfer order to its effect from 3 months from now which would enable me to overcome some of the problems mentioned above. I shall be extremely grateful to you. May I also draw to your attention that Birmingham is not so close to Leeds that I could commute every day otherwise I would have done so. Therefore due to this impracticality I once again seek your cooperation."
That was rejected orally in the sense that there was a telephone conversation, it would appear, between the Bank's headquarters and the manager at Leeds and that request was turned down. A written notification of a requirement to move was received in confirmation of what he had heard orally on 2 June by a document which originally bore the date 4 but was re-dated 5 June, and reached Mr. Akhtar the same day. It is addressed to Mr. Saeed Akhtar, Clerk, United Bank Ltd, with its address, and it has the merit of brevity. It reads in toto:
"Dear Sir, Re: Office Order In terms of Zonal Office Posting and Transfer Order No. 23 dated 28th May, 1987, you are hereby relieved from this branch and are advised to report to the manager at our Birmingham branch on 8th June, 1987." 8 June was, in fact, a Monday, so that gave Mr. Akhtar a weekend in which to effect that removal of his activities. He then on that Monday when in the Bank's view he should have turned up for work in Birmingham, wrote another letter, of which a copy was sent to headquarters and one to Mr. Iqbal, the Leeds Branch Manager but which was addressed to the Birmingham Branch Manager, in which he related that he had previously made a request for a postponement and that that had been turned down so he was informed verbally by the Leeds manager, and he repeated his request for a postponement in somewhat different terms. He said: "
May I now, therefore, request you to allow me my privilege leave of 24 days which is due to me. This would at least give me some time to sort out some of the problems which I am facing. This means that my leave will start on 8/6/87 to 9/7/87 and I would then report to the Branch on 10/7/87. Could you please be kind enough to sanction my P/leave. I look forward to a favourable reply." To that, reply came there none for a considerable period of time. He then went to a Law Centre at Leeds, the Harehills and Chapeltown Law Centre and they, on his behalf, wrote on 18 June saying, amongst other things, that the instruction from head office had put their client in a very difficult position which they understood he attempted to explain in a letter addressed to the Bank and dated 8 June and they repeat the fact that he had, to date, not received a reply. They then advanced the argument that I have already noted and not accepted under Clause 12 of the Terms of Employment and they set out various physical considerations about Mr. Akhtar's wife and family and his financial circumstances and, finally, suggest another two months for him to settle his affairs in Leeds and report in Birmingham on 10 August. That did get a reply. On 24 June 1987 the Vice President of the Bank wrote to the Law Centre acknowledging receipt of that letter that I have last mentioned, refuting the argument under Clause 12, and saying this:
"If you kindly refer to Clause 13 of the above said terms of employment you would find that Mr. Akhtar can be transferred in any of the B branches of the bank, depending upon the bank's requirement. You would please appreciate that due to the exigencies at Birmingham branch it was not possible to defer the transfer orders of Mr. Akhtar."
A further attempt was made by the Law Centre on 7 July asking twp question's: 1. "Whether our client, in your view, has been granted 24 days holiday. If so, he requests that he be paid his holiday pay directly, not later than Friday 10 July 1987. 2. Could you give a definite decision on whether our client could start on Monday 10 August 1987. If this is not possible, in your view, when is the earliest date he could expect to start work at the Birmingham Branch? Further he asked whether financial assistance could be provided by yourselves with regard to removal expenses." On 9 July there was a reply to that:
"We have sanctioned 24 working days holidays with effect from 8th June 1987 till 9th July 1987 (inclusive)."
Pausing there for a moment, that agreed his request that he had made over a month earlier by a letter which actually was dated itself on the day when the 24 working days' holiday expired but appears on the stamp not to have been received until 13 July, some four days later. In paragraph 2 of that letter the following was said "According to his holidays records he is having a credit balance of 14 working days holidays until 31-7-1987 and if he desires to avail the same from 10th July 1987 to 29th July 1987 a separate request may kindly be forwarded to us for an appropriate approval. We further advise you to contact our Birmingham Branch Manager for all further correspondence in this regard." On 15 July, at long last, Mr. Akhtar did get some money. He previously had not been paid, so far as the Industrial Tribunal has found and so far as the documents reveal, anything in respect of his activities or holiday pay since the 5 June 1987. On 15 July some money was sent to him and, in this respect, we do find grounds for criticising the decision of the Industrial Tribunal but it is not, in our view, a matter of fundamental importance. He was sent some money which all the evidence indicates was more than a mere fortnight's pay. He, himself, in evidence twice accepted that he had received on 15 July the 24 working days' pay. On page 29 of the record of the hearing there is the following recorded:
"Reference 15 July; I then got 24 days pay for a period which had expired earlier."
He had said much the same earlier in examination in chief:
"The first payment of any money from the Bank which I received from the end of May was on 15 July. It was said to be for 24 days leave. I got the money on 15 July. It was £200 or more. I am not sure. There was no letter - no explanation - nothing."
In this respect we find that the Industrial Tribunal have made a finding which is not in accordance with even Mr. Akhtar's own evidence in saying that he only got 14 days' pay at that stage. However, that is not a matter which, in our judgment, is of fundamental or, indeed, really significant relevance. In July also Mr. Akhtar, not receiving any other intimations of the Bank's attitude towards the difficulties in which he found himself, went to solicitors and they wrote a letter which, it is common ground between the parties, constitutes an acceptance of the repudiation by fundamental breach if there was such a repudiation by the Bank on that date. The letter was written by the solicitors on 20 July. It says, inter alia:
"Our client considers that the actions of your bank in transferring him without notice from the Leeds branch of your bank to the Birmingham branch is unreasonable and with which he cannot comply."
It then rehearses what had happened in the past and, finally, it says:
"In view of the actions of your bank our client has no alternative but to consider himself as having been dismissed by your bank's conduct."
The final fact which needs mentioning in relation to his financial predicament was that he had, in fact, managed to get a loan from the DHSS earlier in July before he was paid the 24 days' holiday pay but that was not of any great significance, financially speaking. It was of £37.48. Secondly, the arrears of pay which it was eventually discovered he was, in fact, entitled to in respect of the period after 5 June, was paid to him in September but, there again, that, on the other side, is not a matter which is of fundamental importance, not only because Mr. Akhtar accepted in cross examination that the lateness of that payment would not have led him to treat himself as dismissed if it had all occurred at Leeds but also because, intrinsically, a matter such as the failure to pay a relatively small amount of money by way of arrears of pay would not, save perhaps in exceptional circumstances, constitute a repudiatory breach of contract by an employer. The Industrial Tribunal's view of the Bank's conduct in dealing with Mr. Akhtar and his proposed removal from Leeds to Birmingham was trenchantly stated by them. They set out the facts in much the terms in which I have recited them. They said this of the situation when the notice was first given in writing to Mr. Akhtar, that is the one that is redated 5 June:
"At this stage one might well wonder how a responsible employer would expect his lowest paid worker to uproot himself instantly and present himself for work on a full-time basis over the weekend at Birmingham. The distances involved are enormous in terms of daily travel so as to render it completely impracticable, not only from the point of view of the time factor but also from the point of view of costs. The only other alternative would be to find lodgings for the week. However, that cost coupled with running a home for his wife and family, would be equally impractical. We find that the curt order put Mr. Akhtar in a quite impossible position. To compound his difficulties they stopped his pay as an employee of the Leeds branch with effect from 5 June 1987. Only if he were to turn up for employment at their Birmingham branch on 8 June, would his salary continue. The members drawn from industry on this tribunal wish me to say that they find that directive to be quite incredible, irrespective of what the terms of the contract might say."
I interpose to say here that the members of this Tribunal, who are drawn from industry, agree with the view of those members in the Industrial Tribunal. Later on, when commenting on the situation at the later period when some correspondence had passed from Mr. Akhtar to the Bank but only the verbal refusal had passed the other way, the Industrial Tribunal said this:
"11 Needless to say Mr. Akhtar found himself faced with an impossibility. The bank had not set out any terms which were available to the employee to assist him in the move. They had not even said that they were likely to exercise their discretion under the terms of the contract to make any payment whatever. They had failed to give him any reasonable notice of the move which must also inevitably be implied in any such term of employment."
In relation to the discretion which Clause 13 on its face clearly gives to a Bank whether to give a relocation or other allowances, they said this in paragraph 9:
"... we find as a fact that, unless the bank were to exercise its discretion by implementing re-location and other allowances, by their action, they were making the employee attempt to perform something which in practical terms was quite impossible. In other words, without reading into the contract an implied term so as to render the mobility clause feasible, the employer would effectively be driving one of its lowest paid employees out of his employment under the contract of employment which was then subsisting at the Leeds branch as between themselves and Mr. Akhtar."
A similar view was taken after the letter of 8 June had been written. It is in paragraph 14 of the Industrial Tribunal's decision. There, after reciting the inactivities of the Bank, they record the view that they have formed:
"These were acts of omission which show to those who are experienced in industrial matters that the employers were making it as difficult as possible for the employee. In other words they were evincing an intention to drive him out of their employment by their inertia."
We then get the correspondence between the Law Centre and the Bank and also findings that this short notice that was undoubtedly given to Mr. Akhtar was the product of inefficiency at best in that the Bank had a pool of employees on which they could and did call in emergencies and, in this case, they filled the Birmingham gap for one month by that means and also the staff resignations at Birmingham were the product of notices to that effect, of one month, so that the Industrial Tribunal was plainly justified in saying:
"Thus it had been known for about 2 months that they would have problems at Birmingham."
They draw the conclusion that the fact is that because of maladministration the Bank had got themselves into difficulties at a time when the applicant could have been given much longer notice of the intended move than that which he was given. Then they deal with the financial matters which we need not go further into and they express their final conclusions in relation to this matter in the following words:
"We have attempted to try this case against such a background." (That is, a background that this was a Bank whose principal business was conducted in Asia and, therefore, was not to be judged by the same yardsticks as might be applied to a major clearing bank in this country.) "
In a nutshell (and putting the most charitable interpretation on the facts from the employer's point of view) this is a case of a small employee being crushed by a stunning ineptitude and lack of foresight or understanding of what decisions taken in London mean to a £100 a week clerk in a branch in the provinces. If that were not the case, and if the negative attitude and response of the bank were deliberate, then they were the actions of a callous and indifferent employer consciously seeking to drive out from its employment an employee without wishing to compensate him in any way by way of redundancy or otherwise." It is evident from that passage that the Tribunal was not making a finding that the Bank was acting maliciously, as that last sentence, had there been a finding to that effect, would have involved. In fact, they deliberately refrained from making any such finding of malice on the part of the Bank. The fact remains that the most charitable interpretation was that stated in the earlier of those two sentences. The principal issue in this case, as argued by Mr. Lynch before us, is whether or not it was right as a matter of interpretation of the terms of employment of Mr. Akhtar, to imply the terms which the Industrial Tribunal did. They seem to us to be three in number. The first is derived from paragraph 11, which I have already read an extract from, that is to say "they failed to give Mr. Akhtar any reasonable notice of the move, which must also inevitably be implied in any such term of employment". That is, an implication of a requirement that reasonable notice should be given in the exercise of the power which the Bank undoubtedly has to require mobility amongst its employees and which it is notable that, at no stage, Mr. Akhtar challenged as a power. The second implication that the Industrial Tribunal was able to make, was one that the mobility clause must be operated in such a way as to make it feasible. Their actual words bear repetition, they are:
"In other words, without reading into the contract an implied term so as to render the mobility clause feasible, the employer would effectively be driving one of its lowest paid employees out of his employment under the contract of employment which was then subsisting at the Leeds branch as between themselves and Mr. Akhtar."
Coupled with their factual finding that unless the Bank were to exercise their discretion by implementing relocation and other allowances, their actions would make the employee attempt to perform something which, in practical terms, was quite impossible. That, in our view, amounts to an implication of a term that the discretion contained in Clause 13 was to be exercised in such a way as not to render impracticable the obligation thereby in the earlier part of the clause, imposed on the employee to change his place of employment. One can re-phrase such an implication of the way in which the discretion is required to be exercised by putting it as follows: that the discretion is one which the employer is bound to exercise in such a way as not to render the performance by the employee of his obligations to move impossible. The third implication is a much more general one and is to be found in the extract which Mr. Lynch accepted as stating the law, from Mr. Justice Browne-Wilkinson's Judgment in Woods v W.M. Car Services (Peterborough) Ltd. (1981) ICR 670 where he said this:
"In our view it is clearly established that there is implied in a contract of employment a term that the employers will not, without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee: Courtaulds Northern textiles Ltd. v. Andrew (1979) I.R.L.R. 84. To constitute a breach of this implied term it is not necessary to show that the employer intended any repudiation of the contract: the tribunal's function is to look at the employer's conduct as a whole and determine whether it is such that its effect, judged reasonably and sensibly, is such that the employee cannot be expected to put up with it."
Of that the Industrial Tribunal said:
"We find that that is precisely the situation which prevailed here." (Paragraph 24 of their decision). Mr. Lynch's argument was that the very terms of Clause 13 make all those implications impossible and erroneous in law. We accept, we should say in passing, that the question whether or not an implication is to be made is a question of law and, therefore, open to this Tribunal to rule upon. The lynch pin of Mr. Lynch's argument was that Clause 13 clearly gave a discretion to the Bank whether or not to pay removal expenses and that Mr. Akhtar and, indeed, any other employee who signed these terms, would by that acceptance of those terms be accepting the proposition that he might be required to move without any help from the Bank because the matter of allowances, relocation or other, was left to the discretion of the Bank and, therefore, ex hypothesi, not a matter of right. Mr. Lynch accepted, on the other hand, that some implication did fall to be made in interpreting the freedom of action which Clause 13 gave to the Bank. He was compelled, of course, to accept that some limitations must be read into the operation of such a clause, where, as was certainly the case in June 1983, an organization employs people on the basis that it can require them to move to any place of business which it has in the United Kingdom and it has places of business as widely spread as Accrington, Barking, Glasgow, Huddersfield and Luton, to take only a few examples. Quite plainly, it would have been a breach of contract for the Bank to require an employee to work one day in a particular week in each of those or any other five disparate and distant places and the explanation for such a conclusion, which Mr. Lynch advanced, was that he accepted that there was a duty of co-operation placed upon the Bank and a duty not to frustrate the other party's attempt to perform the contract. It seems to us that once that admission is made there is very little difference indeed between a duty to give reasonable notice, which the Industrial Tribunal found as an implication, on the one hand, and a duty to co-operate and not to frustrate the other side's attempt to perform its contract, on the other. We find that the Industrial Tribunal was well entitled to imply a term requiring such reasonable notice and we do not see any significant difference, as I have said, between that and what Mr. Lynch accepted, was their implied obligation. As regards the giving of relocation allowance or other allowances, it is of course plain that the Bank has a discretion. It seems to us that there is a fallacy in the argument that an employee, by accepting employment on terms which include the grant of such a discretion to an employer, was thereby accepting that he would be under an obligation to move without any financial assistance at all, if the Bank thought fit to require such a move. What Mr. Akhtar, by signing the contract, accepted was that there was conferred upon the Bank a discretion. What Mr. Akhtar did not, in our view, accept, was that the Bank, in any particular circumstances, would necessarily not be under an obligation to exercise that discretion. It seems to us that there is a clear distinction between implying a term which negatives a provision which is expressly stated in the contract and implying a term which controls the exercise of a discretion which is expressly conferred in a contract. The first is, of course, impermissible. We were referred to authority for that proposition but authority is hardly needed for it. The second, in our judgment, is not impermissible because there may well be circumstances where discretions are conferred but, nevertheless, they are not unfettered discretions, which can be exercised in a capricious way. The same acceptance of an implied obligation to co-operate and not to frustrate another party's attempt to perform a contract, would appear to point in the same direction because the facts, as found by the Industrial Tribunal, in our judgment, clearly indicate that the Bank was acting or, rather, failing to act, in a manner which frustrated Mr. Akhtar's attempts to perform the obligation which he accepted of removing his seat of activities on behalf of the Bank from Leeds to Birmingham. It, therefore, follows that the contract does, in our view, include as a necessary implication, first the requirement to give reasonable notice and, secondly, the requirement so to exercise the discretion to give relocation, or other allowances in such a way as not to make performance of the employee's duties impossible. We see no conflict between that conclusion and the well established principles to which Mr. Lynch drew our attention that terms can only be implied in contract at common law in clearly defined circumstances and according to well established rules. The first to which we were referred was that no term can be implied which is contrary to or inconsistent with an express term and, upon this aspect of the matter, we have already expressed our view. There is no conflict between a limit on the way in which a discretion can be exercised, on the one hand, and the existence of the discretion on the other. Secondly, we accept that it is now well-established that implications of a term in a contract, which the parties have reduced to writing, can only be made first to give business efficacy to their contracts; secondly, where the implication is to give effect to an obvious combined intention of the parties and, thirdly, where it is a necessary addition to the expression of the particular relationship between the parties and an implication which completes their contractual arrangements. Reference was made to Chitty on Contracts paragraph 847 which sums up this branch of the law by saying: "
The touchstone is always necessity and not merely reasonableness." Those arguments are aimed at the construction of the contract and the question whether or not an implication can be made in it. The third principle, which is enunciated by Mr. Justice Browne-Wilkinson's Judgment, from which I read an extract, is of much wider import and is capable of applying to a series of actions by an employer, which individually can be justified as being within the four corners of the contract because we take it as inherent in what fell from Mr. Justice Browne-Wilkinson that there may well be conduct which is either calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee, which a literal interpretation of the written words of the contract might appear to justify and it is in this sense that we consider that in the field of employment law it is proper to imply an overriding obligation in the terms used by Mr. Justice Browne-Wilkinson, which is independent of, and in addition to, the literal interpretation of the actions which are permitted to the employer under the terms of the contract. On that aspect of the matter, we have the Industrial Tribunal's finding that the situation here was that the Bank's conduct, in which we include inactivity rather than activity, was such that if one looks at it reasonably and sensibly, it was such that the employee could not be expected to put up with it. It would not, of course, be for this Tribunal to substitute its view on the factual aspect of that matter. What we have power to do is to control matters of law. We find that the law was very accurately stated and we can see no ground for crticising the conclusion that the Tribunal reached in applying that particular statement. Mr. Lynch argued that the Industrial Tribunal's view on this aspect of the matter was coloured and, as he would have it, vitiated, by the errors that they committed in their process of interpretation. It is already apparent from this Judgment that we do not accept that their interpretation was incorrect and, therefore, that particular criticism obviously falls to the ground. We should also refer to a paragraph in the Industrial Tribunal's decision upon which Mr. Lynch placed considerable emphasis but which seems to us not to be the foundation of the implications that the Industrial Tribunal, in our view rightly, felt able to make in the terms of the contract. That is paragraph 8 of their decision, which read as follows: '"It must be remembered, however; that the whole of the employment legislation with which tribunals have to deal is based on the understanding that there must be a balance as between the interests of the employer and the interests of the employee. In most cases these interests should be mutually compatible." If we had accepted that the Industrial Tribunal in deciding whether or not to imply a term in the contract between the Bank and Mr. Akhtar, had used as their yardstick the question whether or not such an implication kept the balance between the interests of the employer and the interests of the employee, we would have had no hesitation in reversing their decision or, at least, sending it back for reconsideration to another Tribunal, for that would, of course, have been to substitute the reasonable for the necessary implication but, as we have sought to make clear earlier in this Judgment, the basis upon which we find the implied terms as to notice and as to the provision of relocation or other allowances, which we agree with the Industrial Tribunal should be made, is that they are not just reasonable but necessary in order for the rest of the contract to operate according to its terms. We make them to avoid an impossibility of performance. Accordingly, we regard paragraph 8 as an aside, which does not state the basis upon which the implications that are later made in the Industrial Tribunal's decision as a matter of construction of the contract, were founded. That is made particularly clear, as it seems to us, when one has regard to the fact that it is the employment legislation that is identified as being based on the necessity for a balance between the interests of the employer and the employee and there can be no doubt at all, in our view, that the Industrial Tribunal fully appreciated its function was to look at the contractual situation and not the statutory situation between the parties. In paragraph 24, they said: "We find that the test under section 55(2)(c) of the 1978 Act is always a contractual test" It seems to us clear that what they were rightly concerned to do was to identify exactly what the contractual obligations on either side were. Accordingly, that plank does not bear the weight that Mr. Lynch was disposed to place upon it and we do not regard Clause 8 as providing the philosophy, as he put it, for the implications that were made. Finally, we should deal with an argument that was advanced to us that the bank did not intend to do anything other than exercise their powers under what they took to be the true construction of Clause 13 of the contract of employment and we were referred to Frank Wright & Co (Holdings) Ltd v Punch (1980) IRLR 217 where the summary of the case states this: "It is a general principle in relation to repudiation of contract that where there is a genuine dispute as to the construction of a B contract, the courts are unwilling to hold that an expression of an intention by one party to carry out the contract only in accordance with its own, erroneous interpretation of it amounts to a repudiation, and the same is true of a genuine mistake of fact or law." We were taken very fairly by Mr. Lynch in the best traditions of the Bar to a variety of cases where a somewhat qualified enthusiasm, to put it mildly, was expressed in various courts on the widest construction of that principle stated in Frank Wright & Co (Holdings) Ltd v Punch . It is not necessary for us to go through those authorities in detail because it seems to us that this was not on any realistic appraisal a case where it could be said that the employers were having a dispute with their employee as to the construction of the contract. What the employers were doing was nothing in the way of answering their employee's perfectly reasonable requests for time and help. It is, of course, true that on the 9 July, when I say they did nothing, they did write a letter which I have already read, granting, ex post facto, leave and advising contacts with the Birmingham branch manager and the findings of inactivity are, of course, qualified by that positive step. Subject to that rather mitigated help that was accorded to Mr. Akhtar, we find the criticisms that the Industrial Tribunal made of the way in which the Bank dealt with Mr. Akhtar, as stated in paragraph 33 of its n decision which I have already read and need not repeat, were fully justified. It is not, in our view, legitimate to interpret that course of conduct, which the Industrial Tribunal described as something which the employee could not be expected to put up with, as the same as or comparable with a dispute as to the construction of an agreement and, on that basis alone, we find that far from there being an overt disagreement, what there was a failure to do what the contract on its true construction required the Bank to do. Accordingly, the Punch principle seems to us not to be applicable but it should also be recorded that there is, in fact, no finding that the Bank genuinely believed and was contending, as a matter of construction, for any particular construction, of Clause 13. There is, of course, no finding that the Bank acted maliciously but that seems to us to be a long way from finding that what the Bank was doing was advancing a construction on a written contract which, in the end, turned out to be erroneous. For that second reason we find the principle in the Punch decision to be distinguishable from this case. In those circumstances I do not propose to go through the subsequent authorities. For those reasons, we have reached a conclusion that this is a decision of the Industrial Tribunal which should stand and, accordingly, we dismiss the appeal. The question whether or not Mr. Akhtar was unfairly dismissed was accurately identified by the Industrial Tribunal as turning on a constructive dismissal claim that he made under Section 55 (2)(c) of the Employment Protection (Consolidation) Act 1978. An employee is to be treated as dismissed by his employer if: "the employee terminates that contract, with or without notice, in circumstances such that he is entitled to terminate it without notice by reason of the employer's conduct." The Tribunal held that Mr. Akhtar satisfied that requirement. They made it clear, as was common ground at all times, that the entitlement that is referred to in Section 55 (2)(c) is an entitlement under the common law and that the essentials that have to be shown for constructive dismissal to be established are authoritatively summarised in Western Excavating (ECO Ltd v Sharpe (1978) ICR 221 .[3]Mr. Akhtar was an employee of the Bank at the bottom of their employment structure. He was paid some £560 a month gross and £450 a month take-home pay. He had been employed by the Bank since October 1978 and the events in question which led to what the Industrial Tribunal held was a constructive dismissal occurred in June and July of 1987. There was an internal Bank document, which spoke of Mr. Akhtar's services in laudatory terms which the Industrial Tribunal accepted, saying that although he had had some time off because of illness from time to time, he was nevertheless an excellent man at his job and thought well of by his manager at Leeds. His family circumstances were in early June not easy because his wife had lately had a miscarriage and there were two small children in the family already.[4]Mr. Akhtar's own contract of employment was not proved in evidence but it was accepted on all sides that it was in the same terms as another contract that is in evidence, which sets out in two parts, first the terms and conditions of employment of an employee of the appellant Bank and, secondly, service rules and regulations of that Bank.[5]The clauses which have been the subject of express consideration in the terms of employment are only two in number. One, clause 12, dealing with future alterations in terms of employment, provides:
"Any future alterations in the terms of employment will be notified to the Employee in writing as and when they take place, and the document notifying the changes will form part of the Terms and Conditions of Employment. The Employees (sic) will have 28 days to raise any objections and will be deemed to have agreed to the change should no objections have been received by the end of that period."
[6]Clause 13 is central to this case, it reads as follows and I make a clerical insertion which it was common ground before us should be made of the word "may" as the third word of the clause:
"The Bank may from time to time require an employee to be transferred temporarily or permanently to any place of business which the B Bank may have in the United Kingdom for which a re-location allowance or other allowances may be payable at the discretion of the Bank. The salary and allowances of any employee so transferred may be adjusted at the discretion of the Bank."
[7]The service rules and regulations contain one paragraph lettered "P.", headed "Transfer", which reads:
"Unreasonable refusal by an employee to accept transfer to another place of business of the Bank in accordance with the Terms and Conditions of Employment may result in dismissal."
[8]This case essentially turns on the question whether the Bank was in repudiatory breach of contract as a matter of common law in the way in which it sought to exercise its powers under Clause 13 of the Terms of Employment. It was accepted very properly by Mr. Lynch that very short notice was given and that no offer of relocation allowance or other allowances was made by the Bank. A fortiori, no such allowance was made.[9]We can dispose at once of one possible argument, which does not figure in the Industrial Tribunal's decision and that is that Clause 12 governed the exercise of the powers in Clause 13. We accept Mr. Lynch's submission for the purposes of this appeal, that Clause 12 is concerned with an alteration in the terms and conditions of employment which do not, in fact, include the place where an employee is to be employed and do not directly govern the operation of Clause 13.[10]In so finding we should make it clear that we have not, in fact, heard argument in favour of the proposition that Clause 12 is of significance in this case. It was not, in fact, mentioned in the papers relating to this issue but we need not take further time on that aspect of the matter because it is not on that aspect that our decision is based.[11]The facts, as Mr. Lynch in his helpful submission said to us, are fairly plain. Mr. Akhtar was required by a notice in writing sent from the Bank's headquarters to the branch where he worked in Leeds, to move to Birmingham on 8 January. That is to say, to take up his duties in Birmingham on that day. That notice was dated 2 June and, although the Bank's documentation suggests that a carbon copy was intended to be sent to Mr. Akhtar, there is a finding that it was only an oral intimation that he received of its receipt by the Manager of the Leeds Branch. There is no doubt but that he did learn on 2 June that he was being required to remove his activities to Birmingham because he wrote a letter that very same day addressed to his manager at Leeds, saying amongst other things:
"I understand from the order that I have to report to Birmingham Branch with immediate effect."
[12]He then draws attention to the family problems which I have mentioned as to his wife's medical condition and also that he had back trouble and that he was, by coincidence, in the process of selling his house, although not, of course, at that stage with any intention of going to Birmingham as a result of that sale. He concluded his letter by saying:
"Therefore, I am requesting you to seek a stay in the transfer order to its effect from 3 months from now which would enable me to overcome some of the problems mentioned above. I shall be extremely grateful to you. May I also draw to your attention that Birmingham is not so close to Leeds that I could commute every day otherwise I would have done so. Therefore due to this impracticality I once again seek your cooperation."
[13]That was rejected orally in the sense that there was a telephone conversation, it would appear, between the Bank's headquarters and the manager at Leeds and that request was turned down. A written notification of a requirement to move was received in confirmation of what he had heard orally on 2 June by a document which originally bore the date 4 but was re-dated 5 June, and reached Mr. Akhtar the same day. It is addressed to Mr. Saeed Akhtar, Clerk, United Bank Ltd, with its address, and it has the merit of brevity. It reads in toto: "Dear Sir, Re: Office Order In terms of Zonal Office Posting and Transfer Order No. 23 dated 28th May, 1987, you are hereby relieved from this branch and are advised to report to the manager at our Birmingham branch on 8th June, 1987." 8 June was, in fact, a Monday, so that gave Mr. Akhtar a weekend in which to effect that removal of his activities.[14]He then on that Monday when in the Bank's view he should have turned up for work in Birmingham, wrote another letter, of which a copy was sent to headquarters and one to Mr. Iqbal, the Leeds Branch Manager but which was addressed to the Birmingham Branch Manager, in which he related that he had previously made a request for a postponement and that that had been turned down so he was informed verbally by the Leeds manager, and he repeated his request for a postponement in somewhat different terms. He said:
"May I now, therefore, request you to allow me my privilege leave of 24 days which is due to me. This would at least give me some time to sort out some of the problems which I am facing. This means that my leave will start on 8/6/87 to 9/7/87 and I would then report to the Branch on 10/7/87. Could you please be kind enough to sanction my P/leave. I look forward to a favourable reply."
[15]To that, reply came there none for a considerable period of time. He then went to a Law Centre at Leeds, the Harehills and Chapeltown Law Centre and they, on his behalf, wrote on 18 June saying, amongst other things, that the instruction from head office had put their client in a very difficult position which they understood he attempted to explain in a letter addressed to the Bank and dated 8 June and they repeat the fact that he had, to date, not received a reply.[16]They then advanced the argument that I have already noted and not accepted under Clause 12 of the Terms of Employment and they set out various physical considerations about Mr. Akhtar's wife and family and his financial circumstances and, finally, suggest another two months for him to settle his affairs in Leeds and report in Birmingham on 10 August. That did get a reply. On 24 June 1987 the Vice President of the Bank wrote to the Law Centre acknowledging receipt of that letter that I have last mentioned, refuting the argument under Clause 12, and saying this:
"If you kindly refer to Clause 13 of the above said terms of employment you would find that Mr. Akhtar can be transferred in any of the B branches of the bank, depending upon the bank's requirement. You would please appreciate that due to the exigencies at Birmingham branch it was not possible to defer the transfer orders of Mr. Akhtar."
[17]A further attempt was made by the Law Centre on 7 July asking twp question's: 1. "Whether our client, in your view, has been granted 24 days holiday. If so, he requests that he be paid his holiday pay directly, not later than Friday 10 July 1987. 2. Could you give a definite decision on whether our client could start on Monday 10 August 1987. If this is not possible, in your view, when is the earliest date he could expect to start work at the Birmingham Branch? Further he asked whether financial assistance could be provided by yourselves with regard to removal expenses."[18]On 9 July there was a reply to that:
"We have sanctioned 24 working days holidays with effect from 8th June 1987 till 9th July 1987 (inclusive)."
[19]Pausing there for a moment, that agreed his request that he had made over a month earlier by a letter which actually was dated itself on the day when the 24 working days' holiday expired but appears on the stamp not to have been received until 13 July, some four days later.[20]In paragraph 2 of that letter the following was said "According to his holidays records he is having a credit balance of 14 working days holidays until 31-7-1987 and if he desires to avail the same from 10th July 1987 to 29th July 1987 a separate request may kindly be forwarded to us for an appropriate approval. We further advise you to contact our Birmingham Branch Manager for all further correspondence in this regard."[21]On 15 July, at long last, Mr. Akhtar did get some money. He previously had not been paid, so far as the Industrial Tribunal has found and so far as the documents reveal, anything in respect of his activities or holiday pay since the 5 June 1987. On 15 July some money was sent to him and, in this respect, we do find grounds for criticising the decision of the Industrial Tribunal but it is not, in our view, a matter of fundamental importance. He was sent some money which all the evidence indicates was more than a mere fortnight's pay. He, himself, in evidence twice accepted that he had received on 15 July the 24 working days' pay. On page 29 of the record of the hearing there is the following recorded:
"Reference 15 July; I then got 24 days pay for a period which had expired earlier."
[22]He had said much the same earlier in examination in chief:
"The first payment of any money from the Bank which I received from the end of May was on 15 July. It was said to be for 24 days leave. I got the money on 15 July. It was £200 or more. I am not sure. There was no letter - no explanation - nothing."
[23]In this respect we find that the Industrial Tribunal have made a finding which is not in accordance with even Mr. Akhtar's own evidence in saying that he only got 14 days' pay at that stage. However, that is not a matter which, in our judgment, is of fundamental or, indeed, really significant relevance.[24]In July also Mr. Akhtar, not receiving any other intimations of the Bank's attitude towards the difficulties in which he found himself, went to solicitors and they wrote a letter which, it is common ground between the parties, constitutes an acceptance of the repudiation by fundamental breach if there was such a repudiation by the Bank on that date. The letter was written by the solicitors on 20 July. It says, inter alia:
"Our client considers that the actions of your bank in transferring him without notice from the Leeds branch of your bank to the Birmingham branch is unreasonable and with which he cannot comply."
[25]It then rehearses what had happened in the past and, finally, it says:
"In view of the actions of your bank our client has no alternative but to consider himself as having been dismissed by your bank's conduct."
[26]The final fact which needs mentioning in relation to his financial predicament was that he had, in fact, managed to get a loan from the DHSS earlier in July before he was paid the 24 days' holiday pay but that was not of any great significance, financially speaking. It was of £37.48. Secondly, the arrears of pay which it was eventually discovered he was, in fact, entitled to in respect of the period after 5 June, was paid to him in September but, there again, that, on the other side, is not a matter which is of fundamental importance, not only because Mr. Akhtar accepted in cross examination that the lateness of that payment would not have led him to treat himself as dismissed if it had all occurred at Leeds but also because, intrinsically, a matter such as the failure to pay a relatively small amount of money by way of arrears of pay would not, save perhaps in exceptional circumstances, constitute a repudiatory breach of contract by an employer.[27]The Industrial Tribunal's view of the Bank's conduct in dealing with Mr. Akhtar and his proposed removal from Leeds to Birmingham was trenchantly stated by them. They set out the facts in much the terms in which I have recited them. They said this of the situation when the notice was first given in writing to Mr. Akhtar, that is the one that is redated 5 June:
"At this stage one might well wonder how a responsible employer would expect his lowest paid worker to uproot himself instantly and present himself for work on a full-time basis over the weekend at Birmingham. The distances involved are enormous in terms of daily travel so as to render it completely impracticable, not only from the point of view of the time factor but also from the point of view of costs. The only other alternative would be to find lodgings for the week. However, that cost coupled with running a home for his wife and family, would be equally impractical. We find that the curt order put Mr. Akhtar in a quite impossible position. To compound his difficulties they stopped his pay as an employee of the Leeds branch with effect from 5 June 1987. Only if he were to turn up for employment at their Birmingham branch on 8 June, would his salary continue. The members drawn from industry on this tribunal wish me to say that they find that directive to be quite incredible, irrespective of what the terms of the contract might say."
[28]I interpose to say here that the members of this Tribunal, who are drawn from industry, agree with the view of those members in the Industrial Tribunal.[29]Later on, when commenting on the situation at the later period when some correspondence had passed from Mr. Akhtar to the Bank but only the verbal refusal had passed the other way, the Industrial Tribunal said this:
"11 Needless to say Mr. Akhtar found himself faced with an impossibility. The bank had not set out any terms which were available to the employee to assist him in the move. They had not even said that they were likely to exercise their discretion under the terms of the contract to make any payment whatever. They had failed to give him any reasonable notice of the move which must also inevitably be implied in any such term of employment."
[30]In relation to the discretion which Clause 13 on its face clearly gives to a Bank whether to give a relocation or other allowances, they said this in paragraph 9:
"... we find as a fact that, unless the bank were to exercise its discretion by implementing re-location and other allowances, by their action, they were making the employee attempt to perform something which in practical terms was quite impossible. In other words, without reading into the contract an implied term so as to render the mobility clause feasible, the employer would effectively be driving one of its lowest paid employees out of his employment under the contract of employment which was then subsisting at the Leeds branch as between themselves and Mr. Akhtar."
[31]A similar view was taken after the letter of 8 June had been written. It is in paragraph 14 of the Industrial Tribunal's decision. There, after reciting the inactivities of the Bank, they record the view that they have formed:
"These were acts of omission which show to those who are experienced in industrial matters that the employers were making it as difficult as possible for the employee. In other words they were evincing an intention to drive him out of their employment by their inertia."
[32]We then get the correspondence between the Law Centre and the Bank and also findings that this short notice that was undoubtedly given to Mr. Akhtar was the product of inefficiency at best in that the Bank had a pool of employees on which they could and did call in emergencies and, in this case, they filled the Birmingham gap for one month by that means and also the staff resignations at Birmingham were the product of notices to that effect, of one month, so that the Industrial Tribunal was plainly justified in saying:
"Thus it had been known for about 2 months that they would have problems at Birmingham."
[33]They draw the conclusion that the fact is that because of maladministration the Bank had got themselves into difficulties at a time when the applicant could have been given much longer notice of the intended move than that which he was given.[34]Then they deal with the financial matters which we need not go further into and they express their final conclusions in relation to this matter in the following words:
"We have attempted to try this case against such a background." (That is, a background that this was a Bank whose principal business was conducted in Asia and, therefore, was not to be judged by the same yardsticks as might be applied to a major clearing bank in this country.) "
In a nutshell (and putting the most charitable interpretation on the facts from the employer's point of view) this is a case of a small employee being crushed by a stunning ineptitude and lack of foresight or understanding of what decisions taken in London mean to a £100 a week clerk in a branch in the provinces. If that were not the case, and if the negative attitude and response of the bank were deliberate, then they were the actions of a callous and indifferent employer consciously seeking to drive out from its employment an employee without wishing to compensate him in any way by way of redundancy or otherwise."[35]It is evident from that passage that the Tribunal was not making a finding that the Bank was acting maliciously, as that last sentence, had there been a finding to that effect, would have involved. In fact, they deliberately refrained from making any such finding of malice on the part of the Bank. The fact remains that the most charitable interpretation was that stated in the earlier of those two sentences.[36]The principal issue in this case, as argued by Mr. Lynch before us, is whether or not it was right as a matter of interpretation of the terms of employment of Mr. Akhtar, to imply the terms which the Industrial Tribunal did. They seem to us to be three in number. The first is derived from paragraph 11, which I have already read an extract from, that is to say "they failed to give Mr. Akhtar any reasonable notice of the move, which must also inevitably be implied in any such term of employment". That is, an implication of a requirement that reasonable notice should be given in the exercise of the power which the Bank undoubtedly has to require mobility amongst its employees and which it is notable that, at no stage, Mr. Akhtar challenged as a power.[37]The second implication that the Industrial Tribunal was able to make, was one that the mobility clause must be operated in such a way as to make it feasible. Their actual words bear repetition, they are:
"In other words, without reading into the contract an implied term so as to render the mobility clause feasible, the employer would effectively be driving one of its lowest paid employees out of his employment under the contract of employment which was then subsisting at the Leeds branch as between themselves and Mr. Akhtar."
[38]Coupled with their factual finding that unless the Bank were to exercise their discretion by implementing relocation and other allowances, their actions would make the employee attempt to perform something which, in practical terms, was quite impossible. That, in our view, amounts to an implication of a term that the discretion contained in Clause 13 was to be exercised in such a way as not to render impracticable the obligation thereby in the earlier part of the clause, imposed on the employee to change his place of employment. One can re-phrase such an implication of the way in which the discretion is required to be exercised by putting it as follows: that the discretion is one which the employer is bound to exercise in such a way as not to render the performance by the employee of his obligations to move impossible.[39]The third implication is a much more general one and is to be found in the extract which Mr. Lynch accepted as stating the law, from Mr. Justice Browne-Wilkinson's Judgment in Woods v W.M. Car Services (Peterborough) Ltd. (1981) ICR 670 where he said this:
"In our view it is clearly established that there is implied in a contract of employment a term that the employers will not, without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee: Courtaulds Northern textiles Ltd. v. Andrew (1979) I.R.L.R. 84. To constitute a breach of this implied term it is not necessary to show that the employer intended any repudiation of the contract: the tribunal's function is to look at the employer's conduct as a whole and determine whether it is such that its effect, judged reasonably and sensibly, is such that the employee cannot be expected to put up with it."
[40]Of that the Industrial Tribunal said: "We find that that is precisely the situation which prevailed here." (Paragraph 24 of their decision).[41]Mr. Lynch's argument was that the very terms of Clause 13 make all those implications impossible and erroneous in law. We accept, we should say in passing, that the question whether or not an implication is to be made is a question of law and, therefore, open to this Tribunal to rule upon.[42]The lynch pin of Mr. Lynch's argument was that Clause 13 clearly gave a discretion to the Bank whether or not to pay removal expenses and that Mr. Akhtar and, indeed, any other employee who signed these terms, would by that acceptance of those terms be accepting the proposition that he might be required to move without any help from the Bank because the matter of allowances, relocation or other, was left to the discretion of the Bank and, therefore, ex hypothesi, not a matter of right.[43]Mr. Lynch accepted, on the other hand, that some implication did fall to be made in interpreting the freedom of action which Clause 13 gave to the Bank. He was compelled, of course, to accept that some limitations must be read into the operation of such a clause, where, as was certainly the case in June 1983, an organization employs people on the basis that it can require them to move to any place of business which it has in the United Kingdom and it has places of business as widely spread as Accrington, Barking, Glasgow, Huddersfield and Luton, to take only a few examples. Quite plainly, it would have been a breach of contract for the Bank to require an employee to work one day in a particular week in each of those or any other five disparate and distant places and the explanation for such a conclusion, which Mr. Lynch advanced, was that he accepted that there was a duty of co-operation placed upon the Bank and a duty not to frustrate the other party's attempt to perform the contract.[44]It seems to us that once that admission is made there is very little difference indeed between a duty to give reasonable notice, which the Industrial Tribunal found as an implication, on the one hand, and a duty to co-operate and not to frustrate the other side's attempt to perform its contract, on the other. We find that the Industrial Tribunal was well entitled to imply a term requiring such reasonable notice and we do not see any significant difference, as I have said, between that and what Mr. Lynch accepted, was their implied obligation.[45]As regards the giving of relocation allowance or other allowances, it is of course plain that the Bank has a discretion. It seems to us that there is a fallacy in the argument that an employee, by accepting employment on terms which include the grant of such a discretion to an employer, was thereby accepting that he would be under an obligation to move without any financial assistance at all, if the Bank thought fit to require such a move.[46]What Mr. Akhtar, by signing the contract, accepted was that there was conferred upon the Bank a discretion. What Mr. Akhtar did not, in our view, accept, was that the Bank, in any particular circumstances, would necessarily not be under an obligation to exercise that discretion. It seems to us that there is a clear distinction between implying a term which negatives a provision which is expressly stated in the contract and implying a term which controls the exercise of a discretion which is expressly conferred in a contract. The first is, of course, impermissible. We were referred to authority for that proposition but authority is hardly needed for it. The second, in our judgment, is not impermissible because there may well be circumstances where discretions are conferred but, nevertheless, they are not unfettered discretions, which can be exercised in a capricious way.[47]The same acceptance of an implied obligation to co-operate and not to frustrate another party's attempt to perform a contract, would appear to point in the same direction because the facts, as found by the Industrial Tribunal, in our judgment, clearly indicate that the Bank was acting or, rather, failing to act, in a manner which frustrated Mr. Akhtar's attempts to perform the obligation which he accepted of removing his seat of activities on behalf of the Bank from Leeds to Birmingham.[48]It, therefore, follows that the contract does, in our view, include as a necessary implication, first the requirement to give reasonable notice and, secondly, the requirement so to exercise the discretion to give relocation, or other allowances in such a way as not to make performance of the employee's duties impossible.[49]We see no conflict between that conclusion and the well established principles to which Mr. Lynch drew our attention that terms can only be implied in contract at common law in clearly defined circumstances and according to well established rules. The first to which we were referred was that no term can be implied which is contrary to or inconsistent with an express term and, upon this aspect of the matter, we have already expressed our view. There is no conflict between a limit on the way in which a discretion can be exercised, on the one hand, and the existence of the discretion on the other.[50]Secondly, we accept that it is now well-established that implications of a term in a contract, which the parties have reduced to writing, can only be made first to give business efficacy to their contracts; secondly, where the implication is to give effect to an obvious combined intention of the parties and, thirdly, where it is a necessary addition to the expression of the particular relationship between the parties and an implication which completes their contractual arrangements. Reference was made to Chitty on Contracts paragraph 847 which sums up this branch of the law by saying:
"The touchstone is always necessity and not merely reasonableness."
[51]Those arguments are aimed at the construction of the contract and the question whether or not an implication can be made in it.[52]The third principle, which is enunciated by Mr. Justice Browne-Wilkinson's Judgment, from which I read an extract, is of much wider import and is capable of applying to a series of actions by an employer, which individually can be justified as being within the four corners of the contract because we take it as inherent in what fell from Mr. Justice Browne-Wilkinson that there may well be conduct which is either calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee, which a literal interpretation of the written words of the contract might appear to justify and it is in this sense that we consider that in the field of employment law it is proper to imply an overriding obligation in the terms used by Mr. Justice Browne-Wilkinson, which is independent of, and in addition to, the literal interpretation of the actions which are permitted to the employer under the terms of the contract. On that aspect of the matter, we have the Industrial Tribunal's finding that the situation here was that the Bank's conduct, in which we include inactivity rather than activity, was such that if one looks at it reasonably and sensibly, it was such that the employee could not be expected to put up with it.[53]It would not, of course, be for this Tribunal to substitute its view on the factual aspect of that matter. What we have power to do is to control matters of law. We find that the law was very accurately stated and we can see no ground for crticising the conclusion that the Tribunal reached in applying that particular statement. Mr. Lynch argued that the Industrial Tribunal's view on this aspect of the matter was coloured and, as he would have it, vitiated, by the errors that they committed in their process of interpretation. It is already apparent from this Judgment that we do not accept that their interpretation was incorrect and, therefore, that particular criticism obviously falls to the ground.[54]We should also refer to a paragraph in the Industrial Tribunal's decision upon which Mr. Lynch placed considerable emphasis but which seems to us not to be the foundation of the implications that the Industrial Tribunal, in our view rightly, felt able to make in the terms of the contract. That is paragraph 8 of their decision, which read as follows: '"It must be remembered, however; that the whole of the employment legislation with which tribunals have to deal is based on the understanding that there must be a balance as between the interests of the employer and the interests of the employee. In most cases these interests should be mutually compatible."[55]If we had accepted that the Industrial Tribunal in deciding whether or not to imply a term in the contract between the Bank and Mr. Akhtar, had used as their yardstick the question whether or not such an implication kept the balance between the interests of the employer and the interests of the employee, we would have had no hesitation in reversing their decision or, at least, sending it back for reconsideration to another Tribunal, for that would, of course, have been to substitute the reasonable for the necessary implication but, as we have sought to make clear earlier in this Judgment, the basis upon which we find the implied terms as to notice and as to the provision of relocation or other allowances, which we agree with the Industrial Tribunal should be made, is that they are not just reasonable but necessary in order for the rest of the contract to operate according to its terms. We make them to avoid an impossibility of performance.[56]Accordingly, we regard paragraph 8 as an aside, which does not state the basis upon which the implications that are later made in the Industrial Tribunal's decision as a matter of construction of the contract, were founded. That is made particularly clear, as it seems to us, when one has regard to the fact that it is the employment legislation that is identified as being based on the necessity for a balance between the interests of the employer and the employee and there can be no doubt at all, in our view, that the Industrial Tribunal fully appreciated its function was to look at the contractual situation and not the statutory situation between the parties. In paragraph 24, they said:
"We find that the test under section 55(2)(c) of the 1978 Act is always a contractual test"
[57]It seems to us clear that what they were rightly concerned to do was to identify exactly what the contractual obligations on either side were.[58]Accordingly, that plank does not bear the weight that Mr. Lynch was disposed to place upon it and we do not regard Clause 8 as providing the philosophy, as he put it, for the implications that were made.[59]Finally, we should deal with an argument that was advanced to us that the bank did not intend to do anything other than exercise their powers under what they took to be the true construction of Clause 13 of the contract of employment and we were referred to Frank Wright & Co (Holdings) Ltd v Punch (1980) IRLR 217 where the summary of the case states this:
"It is a general principle in relation to repudiation of contract that where there is a genuine dispute as to the construction of a B contract, the courts are unwilling to hold that an expression of an intention by one party to carry out the contract only in accordance with its own, erroneous interpretation of it amounts to a repudiation, and the same is true of a genuine mistake of fact or law."
[60]We were taken very fairly by Mr. Lynch in the best traditions of the Bar to a variety of cases where a somewhat qualified enthusiasm, to put it mildly, was expressed in various courts on the widest construction of that principle stated in Frank Wright & Co (Holdings) Ltd v Punch . It is not necessary for us to go through those authorities in detail because it seems to us that this was not on any realistic appraisal a case where it could be said that the employers were having a dispute with their employee as to the construction of the contract. What the employers were doing was nothing in the way of answering their employee's perfectly reasonable requests for time and help.[61]It is, of course, true that on the 9 July, when I say they did nothing, they did write a letter which I have already read, granting, ex post facto, leave and advising contacts with the Birmingham branch manager and the findings of inactivity are, of course, qualified by that positive step. Subject to that rather mitigated help that was accorded to Mr. Akhtar, we find the criticisms that the Industrial Tribunal made of the way in which the Bank dealt with Mr. Akhtar, as stated in paragraph 33 of its n decision which I have already read and need not repeat, were fully justified. It is not, in our view, legitimate to interpret that course of conduct, which the Industrial Tribunal described as something which the employee could not be expected to put up with, as the same as or comparable with a dispute as to the construction of an agreement and, on that basis alone, we find that far from there being an overt disagreement, what there was a failure to do what the contract on its true construction required the Bank to do. Accordingly, the Punch principle seems to us not to be applicable but it should also be recorded that there is, in fact, no finding that the Bank genuinely believed and was contending, as a matter of construction, for any particular construction, of Clause 13. There is, of course, no finding that the Bank acted maliciously but that seems to us to be a long way from finding that what the Bank was doing was advancing a construction on a written contract which, in the end, turned out to be erroneous. For that second reason we find the principle in the Punch decision to be distinguishable from this case.[62]In those circumstances I do not propose to go through the subsequent authorities.[63]For those reasons, we have reached a conclusion that this is a decision of the Industrial Tribunal which should stand and, accordingly, we dismiss the appeal.