Kwik-Fit (GB) Ltd v Lineham [1991] UKEAT 250_91_2410

EAT
Kwik-Fit (GB) Ltd v Lineham
[1991] UKEAT 250_91_2410 · 1991-10-24
MR JUSTICE WOOD (PRESIDENT): By an Originating Application dated the 25th October 1990 Mr Lineham alleged that he had been unfairly dismissed by his employers Kwik-Fit (GB) Ltd (Kwik-Fit). His case was heard on the 8th March 1991 by an Industrial Tribunal at Ashford who unanimously decided that on the primary facts he had resigned and therefore had not been dismissed, but that nevertheless in law he had been dismissed because his employers had not sought to discover the reality of a very heated incident when under a duty so to do and that the dismissal was unfair. It also found that he had contributed towards his dismissal to the extent of 25%. Kwik-Fit appeal.The applicant started work with Kwik-Fit in July 1988 and the Tribunal found that he was dismissed on the 16th October 1990. Kwik-Fit has a large number of depots throughout the Country providing a quick service for replacements of parts for motor cars. Initially the applicant was employed as a fitter but was subsequently promoted and trained for management. Eventually he took the position of manager at the Dulwich Depot. Whilst there he had on occasions worked late into the night on stock taking, but was not paid additionally for this, although he had so requested.In September 1990 he was transferred as manager to Bexley Heath. He was in charge of one other person, a fitter. They both worked on the actual manual operations but in addition to this Mr Lineham was responsible for opening and shutting the Depot; activating the alarm, for stock and for all other financial arrangements. He was in a position of trust.During September the Company was investigating thefts from a number of branches and using security officers for this purpose. Although the Industrial Tribunal state that there were suspected thefts from Bexley Heath, we were assured during submissions before us that this was not so.On the 24th September 1990 Mr Lineham had visited friends and they had gone to a public house. On his way home he passed the Bexley Heath Depot. As a result of the evenings drinking he found an immediate need to relieve himself. He deactivated the alarm system at the depot; used the lavatory; then reactivated the alarm and departed. On the following day the security officers made a routine check and discovered that someone had entered the Bexley Heath Depot in the early hours of the morning; it was in fact, just after midnight. When approached Mr Lineham readily and frankly told them what had happened. Security felt bound to advise superiors and as a result Mr Eyles, the Divisional Sales Director, looked into the matter. On the 26th September he arrived, with the Regional Sales Manager, Mr Pharo to speak to the applicant. Mr Lineham told him exactly what had happened. Mr Eyles took the view that this was an irresponsible act given the investigations they were making and that it might have cast some suspicion upon the applicant. We do not know whether the applicant was aware of the investigations by security staff. Mr Eyles considered this to be a disciplinary offence and sufficiently serious to bypass the verbal warning procedure and to give the applicant a written warning.On the 16th October 1990 Mr Eyles returned with Mr Pharo in order to deliver that written warning which had been prepared. His purpose in taking Mr Pharo was for him to run the Depot whilst Mr Eyles and Mr Lineham discussed matters and to ensure that no one came into the office during that discussion.The written warning was dated the 26th September 1990 and read as follows:

" WRITTEN WARNING

It has been brought to my attention that you returned to a centre at midnight. You entered the premises without permission this cannot be tolerated.Should there be a repeat of such behaviour or, indeed, further breaches of Company Policy or Procedures, further disciplinary action will be taken against you.

Yours sincerely"

It is perhaps pertinent to note, as found by the Tribunal, that there was no rule about key-holding staff visiting premises at night, nothing was written down and they had not been told not to come in. The applicant therefore did not require permission nor could his actions be properly said to have been breaches of Company policy or procedures. The Company may not have envisaged that this would happen, in which case this was probably an isolated incident. We do not know.At first the applicant and Mr Eyles were in the reception area alone and the applicant was asked to sign three copies of the written warning to indicate he had received it. Shortly after he had done so the fitter walked in and saw the warning on the counter. The fitter was able to see the warning given to the applicant.In paragraph 12 of the Decision the Tribunal clearly express their views about this written warning and the way this matter had been handled. We do not need to set it out at length but they conclude:"So we understand and accept that the applicant was very angry and upset and humiliated by what had occurred".Insofar as the implication from that paragraph is that this was an unreasonable and unfair way of dealing with the applicant the Members of this Court would concur.After the fitter had seen the warning he asked what he should do with it and the applicant said "file it". The fitter asked "where" and the applicant retorted "in the bin"; there it was put. The applicant then left the reception area in "high dudgeon" and walked into the work shop followed by Mr Eyles. Mr Eyles was no doubt annoyed at this attitude and said to the applicant"you are not taking this seriously are you?".The applicant replied that there had been no objection to his coming in late when stock taking continued until 2 am and thereafter. There was further conversation. The applicant said that he was not going to work late for the Company again and used fairly graphic language. Mr Eyles then said

"If you feel this way why do you work for Kwik-Fit?"

No answer was given but the applicant returned to reception; threw his keys on the counter; went out to his car, drove off and then returned a few minutes later to collect his own mobile telephone which he had left behind. Having collected that he drove off in his car again.The Tribunal examined the facts up to that point and reached the view that there was an unambiguous resignation. They also found that the applicant had acted in the heat of the moment after considerable humiliation and provocation.After the applicant had left Mr Eyles and Mr Pharo themselves left and telephoned from their car to Personnel saying
"So far as the applicant is concerned the necessary form should read "walked out. Do not re-employ. Stop bonus"."
This shows the attide of Management at that time.It was probably the next day - 17th October - that the applicant telephoned a Mr Kattner in the Harlow Office. He was Personnel and Training Manager. During that conversation the applicant asked for his money. Mr Kattner told him he would get all the money to which he was legally entitled and the applicant said that he was going to take Kwik-Fit to an industrial tribunal for unfair dismissal. There is some issue as to whether the phrase "dismissed" had been used during the conversation. The Tribunal found it unnecessary to reach a conclusion on that matter.As a result of that call Mr Kattner felt that he wanted to know more, so he telephoned the Personnel Department at Reading to whom Mr Eyles and Mr Pharo had spoken and the note on the form was read out to him. Mr Kattner also telephoned Mr Eyles and heard his version of the events. After about half an hour Mr Kattner telephoned the applicant again pointing out that the applicant had not been dismissed but had walked out. The finding of the Industrial Tribunal then proceeds:"It is not an issue that on that occasion Mr Kattner raised the question of the applicant's right of appeal against the decision. It is not clear precisely what he was appealing against, the written warning or the dismissal or what, but the applicant was not interested, saying that he would sooner let the Industrial Tribunal decide the matter. The applicant told us in evidence that he did not think that it was worth appealing".Those are the facts as found by the Tribunal.They direct themselves in law and reach their conclusions on the facts in paragraph 14 of the Decision. It reads as follows:
"Now we look to the law. The leading case is that of Sothern v. Frank Charlesly [1981] IRLR 278. The law seems to be this. Where an employee gives an unequivocal and unambiguous notice of his resignation, then that can be accepted by an employer and there is no dismissal. Where the unambiguous words are said in a moment of anger or in the heat of the moment or where there is mental incapacity on the part of the employee or a disability of some kind, there is a duty on the employer not to accept such a resignation too readily, but to check clearly that that is the true intention of the employee and to inquire when matters are clearer and calmer. Put another way, it is important for an employer to know whether an employee has resigned, since if he treats the employee as having resigned and that is not the case, he may be taken to have dismissed the employee. So in any case where a resignation has taken place or indeed a dismissal has taken place in an angry moment, or in the other circumstances to which we have referred, there is an onus on the employer to check that that is the continuing and true intention of the employee. In other words, the employer should seek to recoup the situation and see if the resignation has occurred in these circumstances. We find unanimously that the employers have not done that, that they rather seized the opportunity of this resignation when it arose to make sure that the applicant should not return, indeed that was a fact endorsed on the Reason For Leaving form which they filled in. So we find that there was a dismissal because the employer did insufficient to recoup the situation and write or speak to the applicant to find out what his true intentions really were. The respondents have said that had he taken his warning, there would be no reason why he should not be working there today. This whole matter blew up out of a single incident of the applicant going to use the toilet in the early hours of the morning, something which he candidly admitted to. It was not against any written rule of the company, and this gave rise to what we find was an over reaction by the respondents coupled with the humiliation in which the warning was given. It is not surprising that the applicant reacted in the way he did. The respondents did insufficient to recoup the situation. Merely informing him, by Mr Kattner on the telephone, that he had the right to appeal was not in our view enough for the respondents to avoid liability. The respondents by the very nature of their defence, have not established the reason for the dismissal. We unanimously find that it was unfair."
The first and indeed substantial submission for the appellants is that the Tribunal erred in law in finding that there was an "onus" or "duty" on an employer to "seek to recoup a situation and to investigate the true intention of an employee in circumstances where unambiguous words or actions (we do not see the difference in principle) have occurred in a moment of anger or in the heat of the moment". He relied upon GALE LTD v. GILBERT [1978] ICR 1149. In that case an employee had worked for employers for several years when following a disagreement he said:"I am leaving, I want my cards".He then left and subsequently complained of unfair dismissal. The Tribunal found that although the employers believed that he was resigning the words had been spoken in the heat of the moment and were not meant by him to be taken as resignation. The Tribunal therefore held that he had not resigned but had been dismissed and that the dismissal was unfair. This Court allowing the appeal, decided that although it was undesirable for an employer to accept a resignation of long serving employee without giving him a chance to reconsider his decision nevertheless where the words were clear and unambiguous the employer was entitled to accept the resignation. The passage relied upon by Mr Chapman for the appellants is at page 1154 at D where Arnold J. giving the Judgment of the Court said:
"But we do not think there is anything in industrial law which could be employed to reverse the conclusion that there was here a resignation merely by reason of the reservation which we have about the desirability from the point of view of general industrial relations of accepting finally without any invitation to reconsider a resignation which comes out in this way."
That statement is not quite as strong a comment as Mr Chapman might have wished but in any event we are not satisfied that there is any authority to support the propositions put forward by the Tribunal in the present case. The Industrial Members take the view as a matter of sound management in industrial relations that to state the position in the way in which the Tribunal stated it, is to place too high a burden on employers. The approach needs to be far more flexible.What then is the present position in law?Consideration of these problems has divided between those cases in which the wording has been held to be ambiguous and those where it has been held to be unambiguous. In the former cases despite the seeming difference of views in SOTHERN v. FRANKS CHARLESLY & CO LTD [1981] IRLR 278 the view now accepted is that the test is objective. This conclusion stems from a consideration of GALE LTD v. GILBERT (Supra), TURNER vDT KEAN LTD [1978] IRLR 110; CHESHAM SHIPPING LTD v ROWE [1977] IRLR 391; MARTIN v YEOMAN AGGREGATES LTD [1983] ICR 314; J & J STERN v SIMPSON [1983] IRLR 52; and BARCLAY v CITY OF GLASGOW DISTRICT COUNCIL [1983] IRLR 313.When one turns to unambiguous language, the position for some time has not been so clear. In SOTHERN the words were held to be unambiguous and in STERN this court took the view that even unambiguous words should be considered objectively - in all the surrounding circumstances. In SOTHERN Fox L.J. reaches the conclusion that if words are unambiguous that is the end of the matter. In paragraph 14 he says
"At the meeting on 8 November Mrs Sothern said "I am resigning". The essential question in the case is the meaning to the given to those words. Are they ambiguous or are they unambiguous? The Industrial Tribunal, as I have mentioned, held that if the words constituted a resignation in unambiguous terms that was the end of the matter. That must be correct."
He does, however, raise three matters upon which he comments in paragraphs 20, 21 and 22. The second matter would seem to indicate that there may be some exceptions to his earlier statement. He says this
"Secondly, this is not a case of an immature employee, or of a decision taken in the heat of the moment, or of an employee being jostled into a decision by the employers."
The existence of an exception is also envisaged in the Judgment of the EAT under the chairmanship of Lord McDonald in BARCLAY v CITY OF GLASGOW DISTRICT COUNCIL (Supra). In that case Mr Barclay, who was mentally defective and taken care of by his sister, had been put to work on cleaning up swing-parks. There had been an altercation with the District Manager and the Foreman which ended by Mr Barclay saying that he wanted his books "the next day." That next day was a Friday, a pay day and the District Manager gave instructions for Mr Barclay to sign the necessary form for termination of employment. Although not keen to do so Mr Barclay had signed it but over the weekend he realised what had happened and he reported for work on the Monday. He was sent home by the foreman on the ground that he had resigned.

In the Judgment of the Court Lord McDonald said this

"It may be that the majority of the tribunal were correct in holding that when the appellant demanded his books on the Thursday, notwithstanding that it was in the heat of the moment, he meant it at the time. The real question however is whether or not in the special circumstances the respondents were entitled to assume that this was a conscious rational decision. It is true that the majority refer to the exceptional circumstances of the case but we do not consider that having regard to the observations in Sothern v. Franks Charlesly & Co, it is sufficient to dismiss the unusual aspect of this case in this way. We consider that the proper approach is to have regard, not merely to what was said on the Thursday, but to what happened the following day and indeed to the fact that the appellant did report for work on the following Monday apparently under the impression that he was still employed. At the very least there was, in our view, an obligation upon the respondents when the appellant reported on Friday to seek some form of confirmation that his act of resignation was in fact a genuine one and fully understood. Instead of that they adopted what we consider to be the indefensible practice of requiring him against his will, to sign a blank document which presumably on some subsequent occasion was filled in by them with the word "resigned" written opposite the entry "Reason for Leaving". Further we agree with the observation of the dissenting member that in the special circumstances of this case a reasonable employer would at least have consulted with one of the appellant's sisters before assuming the appellant meant the words that he had used. For these reasons we propose to allow the appeal".Finally we would refer to the most recent authority SOVEREIGN HOUSE SECURITY SERVICES LTD v SAVAGE [1989] IRLR 115. In that case Mr Savage had been employed as a Security Officer. Following the discovery that money was missing, Mr Savage was telephoned by his superior Mr Price, and told that he was being suspended forthwith pending police investigations. Mr Savage responded by saying"I am not having any of that, you can stuff it, I am not taking the rap for that".He then telephoned his immediate superior Mr Scroggie and told him that he would not be in to relieve him the following morning as arranged. Mr Savage subsequently complained to the Industrial Tribunal of unfair dismissal. The Tribunal reached a decision in his favour. The employers appealed, that appeal was dismissed, the employers appealed to the Court of Appeal who also dismissed the appeal.In setting out the principles to be applied, May L.J. giving the leading judgment of the Court said this in paragraph 7
"In my opinion, generally speaking, where unambiguous words of resignation are used by an employee to the employer direct or by an intermediary, and are so understood by the employer, the proper conclusion of fact is that the employee has in truth resigned. In my view Tribunals should not be astute to find otherwise."
But he then continues:
"However, in some cases there may be something in the context of the exchange between the employer and the employee or, in the circumstances of the employee him or herself, to entitle the Tribunal of fact to conclude that notwithstanding the appearances there was no real resignation despite what it might appear to be at first sight"
The Learned Lord Justice then considers SOTHERN and after referring to some of the evidence in the case of SAVAGE he adds this at paragraph 14:
"There was that evidence from those two witnesses on which in my judgment it was possible for the Industrial Tribunal, were they so minded, having seen and assessed the witnesses giving evidence in the witness-box, to conclude that the words actually used by the employee to Scoggie were used in the heat of the moment and should not have been accepted at full face value by the employers. There was thus, in my opinion, evidence entitling the Industrial Tribunal to make the findings which they did in paragraph 7 of their decision, which was, as I think, just as much one of fact as their findings of fact set out in paragraph 4 of the decision, that "the applicant was not tendering his resignation to Mr Scroggie"."
Let us first look at the problem from the approach of Sound Management. As we have said the Industrial members take the view that the way in which this Industrial Tribunal have expressed themselves puts too high a burden upon employers. If words of resignation are unambiguous then prima facie an employer is entitled to treat them as such, but in the field of employment personalities constitute an important consideration. Words may be spoken or actions expressed in temper or in the heat of the moment or under extreme pressure ("being jostled into a decision") and indeed the intellectual make-up of an employee may be relevant (see BARCLAY ). These we refer to as "special circumstances". Where "special circumstances" arise it may be unreasonable for an employer to assume a resignation and to accept it forthwith. A reasonable period of time should be allowed to lapse and if circumstances arise during that period which put the employer on notice that further enquiry is desirable to see whether the resignation was really intended and can properly be assumed, then such enquiry is ignored at the employer's risk. He runs the risk that ultimately evidence may be forthcoming which indicates that in the "special circumstances" the intention to resign was not the correct interpretation when the facts are judged objectively.How then is that approach to be reconciled in law? This is not a purely commercial context. In the sphere of industrial relations these special circumstances may arise due to those conflicts of personalities or individual characteristics. A resignation by an employee is a repudiation of the contract of employment, a fundamental breach. It should be accepted by the employer within a reasonable time see WESTERN EXCAVATION (EEC) LTD v SHARP [1978] ICR 221 . CA, per Lord Denning at page 226B; see also LONDON TRANSPORT EXECUTIVE v CLARKE [1981] ICR 355. In many cases the acceptance will be by inference. Thus where words or actions are prima facie unambiguous an employer is entitled to accept the repudiation at its face value at once, unless these special circumstances exist, in which case he should allow a reasonable time to elapse during which facts may arise which cast doubt upon that prima facie interpretation of the unambiguous words or action. If he does not investigate these facts, a Tribunal may hold him disentitled to assume that the words or actions did amount to a resignation, although to paraphrase the words of May LJ - Tribunals should not be astute so to find.One then asks what is that reasonable period of time? It may be very short - MARTIN . It may be over a week-end - BARCLAY . The test is objective and one of reasonableness. It is only likely to be a relatively short, a day or two, and it will almost certainly be the conduct of the employee which becomes relevant, but not necessarily so.How then should this approach to the law be applied in the present case? Unless there are sufficient findings of fact upon which we can decide that if the Tribunal had directed itself as we think it should, the result would have been the same, it is our duty to remit this matter for a further hearing.We have no notes of evidence. The only finding of fact, which was common ground, from the telephone conversation between the Applicant and Mr Kattner on 17 October, was that the Applicant was going to take Kwick-Fit to an Industrial Tribunal for unfair dismissal. Thereafter Mr Kattner was sufficiently dissatisfied with the situation to make further enquiries. Thirdly, in the subsequent telephone conversation, there was talk of an Appeal and the repeated declaration by the Applicant of an intent to go to an Industrial Tribunal. Although there had been mention of an Appeal, there is no finding about this. The Industriala Tribunal say
"..It is not in issue that on that occasion Mr Kattner raised the question of the applicant's right to appeal against the decision. It is not clear precisely what he was appealing against, the written warning or the dismissal or what, but the applicant was not interested, saying that he would sooner let the Industrial Tribunal decide the matter. The applicant told us in evidence that he did not think that it was worth appealing."
It is therefore possible for us to accept that this Tribunal found first that on 17 October, there was mention of dismissal and going to the Industrial Tribunal; secondly, that there was an offer of an Appeal which was rejected and the intention of going to an Industrial Tribunal repeated. By its decision, the Tribunal clearly felt that these facts required further enquiry before Kwik-Fit was entitled to assume that the actions of 16 October could properly be assumed to amount to a resignation and that in fact it was not the correct assumption. It was, of course, open to them to find that the Applicant had simply refused to discuss the matter further or give any explanation but the Tribunal did not so found. Having seen and heard the witnesses the Tribunal found as it did in the latter part of paragraph 14 of the Decision.Not without considerable hesitation, we are prepared to accept that on the present findings of fact and upon the proper direction of law as we have understood it, this Industrial Tribunal would have reached the same conclusion namely that the Applicant had been unfairly dismissed in that Kwik-Fit was not entitled to assume in all the circumstances that what occurred on the 16th October was in fact a resignation.We are content that that should be so, because in the circumstances of this case amd on the basis of the evidence available to us the Industrial Members, and I agree with them, take the view that this Applicant was dealt with unfairly.Appeal dismissed.