Arden v Bradley [1993] UKEAT 251_91_2501

EAT
Arden v Bradley
[1993] UKEAT 251_91_2501 · 1993-01-25

JUDGE J HICKS QC:

The Appellant, Mr Arden, had been employed by the Respondent, Mr Bradley, from 1 July 1983 as a farmworker until he resigned on 21 August 1990. He then presented a claim for unfair dismissal on the basis that he had been constructively dismissed, that is to say that he was entitled to terminate his employment without notice by reason of the employers' conduct. That application was dismissed by the Industrial Tribunal and he appeals against that decision.The facts as found by the Industrial Tribunal are as follows, in paragraphs 4 onwards of their Full Reasons:
"4 The applicant had been accustomed to driving the tractor on the farm. He also undertook mechanical repairs and servicing work in the workshop. During the winter months, he assisted with the cattle. He and any other employees normally undertook any farm work which might be required.
5 On 9 January 1989, the applicant hurt his back while putting in a gate post. He obtained advice and assistance from Mrs Bradley, [the employer's wife] who is a qualified physiotherapist. He continued to work in some discomfort until April and he was then absent sick. He spent 3 weeks in hospital during June. He provided medical certificates to the respondent, from whom he received sick pay. He was eventually signed off as fit for work on 8 January 1990.- that is to say, within a day, exactly one year after the original accident.6 The applicant had not been available to help with the harvest. The respondent required additional help in the absence of the applicant. He therefore advertised in the local press. His advertisement read:-
"Harvest help. Combine/tractor driver required with good mechanical ability. Modern 500 acre mixed farm at Grimsthorpe. Long hours, accommodation available, suit experienced student, top rates for right person"
7 The respondent contacted and engaged a Mr Stubley, an experienced farm worker who lives in the next village and had himself recently been made redundant. Mr Stubley was willing to provide harvest help, but only if he could be provided with employment which would be permanent.8 When the applicant went back to work in January 1990, he was not asked to drive the tractor. There is not much tractor driving to be done during the winter. He was given other tasks and Mr Stubley drove the tractor when required. He complained that ditching work was hurting his back. He was then given other duties and the respondent did not pursue the matter further. The respondent and his wife had doubts about the condition of the applicant's back. The applicant was not asked to undertake overtime work as he had previously. During 1988, he worked for some 900 hours of overtime. From January 1990, his overtime only amounted to a few hours. He says that as a result he suffered a drop in earnings of about £2,000.9 The applicant consulted his trade union about the situation and they wrote on his behalf to the respondent early in February. The allegation was made that he was being allocated some of the hardest tasks and it was also claimed that his job was that of tractor driver. The respondent replied that on the advice of his wife, any tractor driving had been avoided as it would only aggravate any back condition."In paragraph 10 the Reasons deal with an earlier application to the Tribunal for a written statement of terms of employment and set out the proposed statement. That application was eventually withdrawn, after which the Applicant proceeded to resign and present a complaint about unfair dismissal.The appeal is on the basis of error of law in that, in substance, the Tribunal is alleged to have misdirected itself. There is no appeal on the ground of perversity so one asks oneself, in considering the decision which we have to reach, whether there is an error of law in that the Industrial Tribunal misdirected itself or asked the wrong question.The complaints about the Tribunal's Decision really concentrate chiefly on two or three paragraphs of their Reasons. In paragraph 16, the Tribunal said:
"16 The applicant complains at the lack of overtime work for him in 1990. Overtime work on a farm can be regarded as an expectation, but there is no mutual obligation under the terms of the contract of employment either to provide it or to work it. Putting the claim at its highest, the failure of the respondent to allocate overtime work to the applicant might have been unreasonable, but it did not constitute a breach of contract."
The criticism of that is, that in that paragraph, which it is suggested is central to the reasoning of the majority - this was a majority Industrial Tribunal Decision - the Tribunal is concentrating on the terms of the contract in the narrow sense of what the employer could or could not do by variation of the conditions under which the employee worked, in particular the overtime that he was awarded, without having regard to implied terms of the contract and, in particular an implied term which it has been held on many occasions is appropriate and particularly relevant to the case of unfair dismissal, that is to say what is commonly called the implied term of mutual trust and confidence: that the employer will not conduct himself in a manner likely to destroy or seriously damage the relationship of confidence and trust between employer and employee.That is the criticism of paragraph 16: that it pays attention to whether there was a breach of contract in the narrow sense rather than looking at the possibility that there was a breach of that implied term.In paragraph 19 the Tribunal did refer to a case which is undoubtedly concerned with that sort of implied term, the case of Woods -v- W M Car Services . I shall return to that case in more detail, but the way in which the Tribunal reaches its conclusion in relation to that point is expressed in paragraph 20:
"20 The majority of the Tribunal takes the view that the respondent in this case was not seeking to "squeeze out" the applicant. At the time that the applicant gave notice to terminate his job, the respondent was taking steps to expand into poultry. The applicant had himself been engaged in building poultry houses. The respondent needed labour to manager the poultry. There was work available for the applicant to perform."
The criticism of that paragraph is, that by the use of the words "squeeze out", although admittedly that expression is used in the case of Woods -v- W M Car Services , it is apparently in its ordinary, colloquial, sense and by the reasons that they give the majority of the Tribunal show that they were asking themselves exclusively the question whether the conduct of the employer was aimed at forcing the employee to leave the employment, whereas on a true view of the authority Woods -v- W M Car Services itself the question is a wider one. Therefore, as I have said, we must come back to what the test truly is on that authority.Finally, one finds in paragraph 23 of the Tribunal's Reasons:
"23 The decision of the majority of the Tribunal that there was no significant breach of contract by the respondent is decisive in this case."
The question we have to ask ourselves is again, by that expression "breach of contract", are the majority truly addressing the point as to whether there was a breach of the implied term not to destroy or seriously damage the relationship of confidence and trust, or are they again reverting to a narrower view of what the terms of contract were in such respects as whether the applicant was truly contractually entitled to be a tractor driver or contractually entitled to work overtime.In our view paragraphs 16 and 23, while they possibly suggest that the Tribunal was concentrating on an unduly narrow view of what amounts to a breach of contract by the employer, would not of themselves be such as to entitle us to interfere if they stood alone. The essential issue, in our view, is whether, in paragraph 20, the majority had adequately understood the question which should be asked or whether they were taking an unduly narrow view of what was the sort of conduct that this Tribunal in other decisions has previously established to be required.For that purpose we were referred to two authorities. One was Woods -v- W M Car Services [1981] ICR 666, which was cited to the Tribunal, and it would seem that the conduct of which the employee was complaining of there was not advanced in terms of conduct intended to drive the employee out of work or, force the employee to resign; it was conduct directed to varying the employee's conditions and circumstances of service. The headnote reads:
" Held, dismissing [the employee's] appeal, that an employer who persistently attempted to vary an employee's conditions of service was acting in a manner calculated to or likely to destroy the relationship of confidence and trust between employer and employee in breach of the implied term that he would not do so, and that such a breach was a fundamental breach of the contract of employment amounting to a repudiation of the contract;"
It then goes on to deal with the facts and decision in that case. The decision itself was that the case was dismissed.The relevant passage in the judgment of the Employment Appeal Tribunal in that case, delivered by Browne-Wilkinson J, begins at 671F, and after referring to the case of Western Excavating (ECC) Ltd v Sharp , which was also referred to by the Industrial Tribunal in the present case, he went on in these terms:"Experience in this appeal tribunal has shown that one of the consequences of the decision in the Western Excavating case has been that employers who wish to get rid of an employee or alter the terms of his employment without becoming liable either to pay compensation for unfair dismissal or a redundancy payment have had to resort to methods of "squeezing out" an employee. Stopping short of any major breach of the contract, such an employer attempts to make the employee's life so uncomfortable that he resigns or accepts the revised terms. Such an employer, having behaved in a totally unreasonable manner, then claims that he has not repudiated the contract and therefore that the employee has no statutory right to claim either a redundancy payment or compensation for unfair dismissal.It is for this reason that we regard the implied term we have referred to as being of such importance. In our view, an employer who persistently attempts to vary an employee's conditions of service (whether contractual or not) with a view to getting rid of the employee or varying the employee's terms of service does act in a manner calculated or likely to destroy the relationship of confidence and trust between employer and employee. Such an employer has therefore breached the implied term. Any breach of that implied term is a fundamental breach amounting to a repudiation since it necessarily goes to the root of the contract:"In paragraph 19 of their Reasons the Industrial Tribunal in this case quoted two extracts from that case. The first is the sentence which runs:"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".The second, which is an extract from the passage I have read, is:
"Experience has shown that one of the consequences of the decision in the Western Excavating case has been that employers who wish to get rid of an employee or alter the terms of his employment without becoming liable either to pay compensation for unfair dismissal or a redundancy payment, have had to resort to methods of "squeezing out" an employee."
What seems to us to be of some materiality is that in the full extract from Woods v W M Car Services it is quite clear, because it is repeated three times in different ways, that the Employment Appeal Tribunal in that case was contemplating that the employers' conduct might be directed to one of two ends and that both ends are unjustified. One is "to get rid of an employee", as the phrase is used in the first extract, but the other is "to alter the terms of his employment". A few lines later, and after the part that is quoted by this Industrial Tribunal, the judgment again makes this distinction:
".....an employer attempts to make the employee's life so uncomfortable that he resigns or accepts the revised terms."
- again, these are alternatives. Finally, and again not in part of the judgment which was quoted by the Industrial Tribunal,:
".... an employer who persistently attempts to vary an employee's conditions of service (whether contractual or not) ..."

-so that the actual conduct may not be a breach of conduct -

"...with a view to getting rid of the employee or varying the employee's terms of service"
That is, as I have said, in the context of a case where it would seem (although the matter is not very precisely formulated) that the issue was the latter of those two alternatives, altering the terms of service rather than actually getting rid of the contract. It is perhaps unfortunate that all this is encapsulated in the graphic phrase "squeezing out", which in its ordinary understanding might perhaps be thought to be much more appropriate to the former of the alternatives - actually trying to get rid of the employee - than the latter, which is effectively in broad terms to downgrade that employee's status or remuneration.It may be because of that that the majority of the Industrial Tribunal in this case, in our view, in paragraph 20 does seem to have asked itself the question, was the employer in this case seeking to "squeeze out" the Applicant in the narrower sense, that is to say, in the sense of the first only of those two alternatives. The reason they go on to give for that finding is all concerned with the question whether the employer had a motive to actually get rid of the Applicant without replacement. They refer to the evidence that the Respondent was taking steps to expand into poultry and say that there was work available for the Applicant to perform. All that would be relevant to the question whether the employer was seeking to get rid of the employee. It does not on the face of it address, and we have come to the conclusion that the Industrial Tribunal do not seem to have shown that they were addressing, the question whether the employer was taking steps with a view to varying the terms of the Applicant's service, not necessarily his contractual terms of service (which were no doubt quite wide although never, in the event, precisely formulated but the industrial reality of his terms of service, given the change from his former position of being the tractor driver, and of having at least a fair share in the overtime that was available, to the situation where he was not the tractor driver and his evidence was that he was deprived of the overtime that was available, even to the extent in one instance of being taken off the task that he was in the process of performing at 5.00 p.m. to make way for another employee.It is not for us to say what decision the Industrial Tribunal would or should have reached, or should now reach, when addressing that question. It suffices that we are persuaded that, perhaps understandably in view of the graphic phrase "squeeze out" in the authority cited to them, they did not address that question and should have the opportunity of doing so. That conclusion is reinforced by a reference to another case cited to us but not cited to the Industrial Tribunal (and, of course, in no way were they at fault in not referring to the authority itself) but that the question is of the nature which we have adumbrated is reinforced by the case of F C Gardner Ltd v Beresford [1978] IRLR 63. In paragraph 10 of the judgment of the Employment Appeal Tribunal, delivered by Phillips J, the "implied term" is expressed in this way:

"..in this particular case ..."

- he says, and there is that phrase, but the words are illustrative of a general situation, as appears from what follows:
"... it must be an implied term that an employer will not treat his employee arbitrarily, capriciously or inequitably in matters of remuneration and, no doubt it is reasonable in most circumstances to infer a term something on those lines."
That is in our view, although it is not the main reason for our decision, a further illustration of the fact that the test is not just whether the employer is trying to drive out the employee, but whether there is an attempt to change the reality of the terms upon which the employee is serving and is remunerated.For those comparatively narrow reasons we have come to the conclusion that the appeal should be allowed and the application remitted to the Industrial Tribunal. We have not considered in detail the terms on which this should be done. We have to decide, of course, whether it should be remitted to the same Tribunal or a to a different one; whether it should be for a re-hearing or simply for re-consideration of their decision on the evidence that they have already heard in the light of the direction that we are giving.After further submissions our direction will be that it be remitted to the same Tribunal, if it can be reconstituted, for reconsideration but not rehearing.