Mills (t/a Chudleigh Dairy) v Wills [1993] UKEAT 824_92_2801

EAT

Mills (t/a Chudleigh Dairy) v Wills

[1993] UKEAT 824_92_2801 · 1993-01-28

JUDGE HICKS QC :

We have before us the Preliminary Hearing of two appeals, both by the same employer - Mr Clyde Mills trading as Chudleigh Dairy, but relating to different employees - in the first appeal Mrs G Wills and in the second appeal Mrs Baker and Mrs Shenton. The common background is that Mr Mills had taken over the business of what was called the Chudleigh Dairy from the previous owner in December 1991, the Respondents to the appeals having already worked there under the previous owner for some time, in the case of Mrs Wills since June 1975 and in the case of Mrs Baker and Mrs Shenton not as long, but certainly for some time, and part of the background was that in each of those cases Mr Mills, at least initially, questioned whether there was continuity of employment for the purposes of employment protection legislation. Apart from that general background the facts of the two cases are quite different and we must deal with them separately.

So far as Mrs Wills is concerned she was a part-time employee. She had been working twelve and a half hours a week on Mondays and Thursdays under the previous owner and following the takeover of the business by Mr Mills there were changes, and in particular her hours were increased to seventeen, including Thursday afternoons. The arrangement between Mrs Wills and the previous owner had been that if a Bank Holiday coincided with a Monday, one of her working days, then she was granted a day's paid leave. The first occasion after the takeover on which that became relevant was Easter 1992, when she was told that she would not be paid for Easter Monday unless she worked. She challenged that, and after some correspondence Mr Mills submitted to her a written statement of the terms and conditions of her employment, which among other things stated that her previous employment did not count as continuous employment. She then submitted an application to an Industrial Tribunal to determine the terms and conditions of her employment, and almost immediately after that application had been served on Mr Mills he interviewed her on 22 June 1992.

The Industrial Tribunal say:

"..although there is a direct conflict of evidence on the outcome of that interview, it is clear that the applicant was left with the impression that the respondent was not prepared to make any concession on the issue of her being paid for Bank Holidays and that, according to his understanding, her previous employment was not to be regarded as continuous. The respondent also referred to the applicant's application to the Industrial Tribunal and asserted that this was entirely the wrong way of resolving the issue between them, and that it was his intention to issue her with a written warning for failure to pursue her complaint in accordance with the grievance procedure, as outlined in the written statement issued to her on 9 June."

It is to be noted, of course, that failure to comply with the grievance procedure was a somewhat circular objection, because whether the grievance procedure applied was part of the whole question whether the written statement of terms and conditions applied, which was the very question which Mrs Wills was taking to the Industrial Tribunal in pursuance of her undoubted rights.

Following that interview Mrs Wills resigned and claimed that that was a constructive dismissal. The Tribunal found in her favour. What is advanced as the main ground of appeal is that the dispute about pay on Bank Holidays, when averaged over the year, amounted to only some £2.20 per week and it is argued that that was not and could not in law amount to "a significant breach going to the root of the Contract of Employment" to quote from the leading case of WESTERN EXCAVATING (ECC) Ltd v SHARP

[1978] IRLR 27

, which was accepted by the Tribunal and is accepted by Mr Martin on behalf of the Appellant as spelling out the essential elements to be satisfied for the purposes of a constructive dismissal claim. Quite apart from whether the breach is significant there are of course other steps, but it is that step which is sought to be challenged by this appeal. Mr Martin points out that in a reported case a sum of £1.50 per week has been held to be insufficient to amount to a significant breach for the purposes of the Western Excavating test. In our view there is no arguable case for saying that the Tribunal fell into an error of law in this respect. They did remind themselves of the Western Excavating test. They had well in mind what the financial implications of the disputed term were, but they also had in mind that this was an interview in which the employer was not only challenging that term but was also challenging whether employment was continuous and, perhaps most importantly of all, was threatening disciplinary procedure for the mere fact that the employee had asked the Industrial Tribunal to resolve the argument between them as to what the true terms of employment were.

Taking those three matters cumulatively it was a question for the Industrial Tribunal whether that amounted to a significant breach going to the root of the Contract of Employment, and in our judgment it was well within their jurisdiction to find as a fact that it was, and no error of law is shown. Some of Mr Martin's arguments might go to the question whether the Tribunal's findings of fact were perverse, in the sense of being findings which no Tribunal properly directed could have reached on the evidence, but it was not at all clear to us that he was really pursuing that, and it certainly is not a ground which is raised in the Notice of Appeal, except possibly by the last lines of 6(c)(ii), which seem to be relating to the implied term of trust and confidence. Whether it is raised or not we see no prospect at all of being able to argue with any prospect of success that the finding by the Tribunal as to the content of the crucial interview was perverse. The evidence about it was that of the Applicant on the one hand and the Respondent on the other hand; it was largely, if not entirely, a matter of the impression made by those witnesses on the Tribunal, and we see no prospect that their findings as to the outcome of that interview and the impression left on Mrs Wills' mind at the end of it could be challenged; and therefore insofar as perversity is a separate ground of appeal we have come to the conclusion that that is equally hopeless and in those circumstances we dismiss the appeal at this stage.

As to Mrs Baker and Mrs Shenton, the circumstances which gave rise to their dismissal, which was a direct dismissal, not in these instances a constructive dismissal, were that they had purchased goods directly from one of the suppliers of food, in this case I think meat, to Mr Mills' business. The Tribunal found as a fact that during their period of employment with the previous owner they were trusted employees and were allowed by the previous owner to purchase direct from suppliers to the shop, which they did from time to time, and in particular from a Mr Soanes who supplied frozen food to the shop. They did that again, after the business had been taken over by Mr Mills, and Mr Mills and his manager Mr Bayliss, when they discovered that that had happened, took exception to it and ultimately dismissed Mrs Baker and Mrs Shenton. The Tribunal go into all these matters in some detail and make various findings.

The conclusion of the Industrial Tribunal was that, applying the test laid down in British Home Stores Ltd v Burchell

[1978] IRLR 379

, and asking themselves whether the three primary factors were established whether there was belief by the employer in misconduct, whether he reached that belief on reasonable grounds and whether he had made all reasonable enquiries - the Tribunal accepted that Mr Mills did have that belief but found that in regard to reasonable grounds and reasonable enquiries he fell very far short of what was to be expected.

That conclusion by the Industrial Tribunal is challenged by the Appellant on the grounds of perversity, that is to say that it is a decision which no Industrial Tribunal directing itself correctly on the law could reasonably have reached. It is always a somewhat difficult task to assess such a ground of appeal at this preliminary stage, because we do not have the evidence before us, but the matter is simplified in this case by Mr Martin's presentation of the case for the Appellant, because it does seem by the way he puts it that the criticism of the Industrial Tribunal's decision really boils down mainly to two crucial matters.

First of all, in paragraph 30 of their Reasons the Industrial Tribunal say:

"After further discussions between Mr Bayliss and Mr Mills, the decision was made by Mr Mills that they should be dismissed. They were told by Mr Bayliss, who rang each of them."

Mr Martin alleges that the finding that the decision was made by Mr Mills, although communicated by Mr Bayliss, was perverse. We have not the Notes of Evidence but it is conceded by Mr Martin that at the stage which the Tribunal are referring to at that point there were discussions between Mr Bayliss and Mr Mills. Mr Martin used the words that "Mr Bayliss liaised with Mr Mills", so that there was clearly before the Tribunal evidence of communication between them at that point, and certainly Mr Bayliss was a witness before the Tribunal. Secondly, what was also before the Tribunal, and which they were entitled to take into account, was the employer's response to the Originating Application, form IT3, which was completed and signed by Mr Mills and which plainly speaks in the first person:

"I am not required by law to employ dishonest people. Staff have an obligation at law to maintain trust and confidence by their actions involving their employment. To date neither I nor the supplier has been paid for the goods taken from the shop by this employee"

The Tribunal refer to that in their Reasons.

In our view therefore it is not an arguable point that the Tribunal had no evidence on which they could have reached the conclusion that in truth and substance the decision was that of Mr Mills. It may well be that on the evidence before them they could equally have reached the conclusion that the decision was that of Mr Bayliss; that is not the point. The point is whether it was a finding of fact which no reasonable tribunal properly directing themselves could reasonably have reached and we consider that there is no prospect of succeeding in an argument that they were perverse in that sense.

The second main point that is taken by Mr Martin is that it was perverse for the Tribunal to find that there had been no adequate investigation, given the evidence accepted by them of what investigation there had been, and in particular the finding in paragraph 28 of their Reasons that Mr Soanes was contacted by Mr Bayliss, confirmed that there was a private transaction and added that he had told them - Mrs Baker and Mrs Shenton - to check with the manager. The Tribunal go on to say:

"They flatly deny that, but we accept that is what Mr Soanes told Mr Bayliss and also Mr Mills."

The Tribunal add, and in our view they are entitled to add as a matter of the realism of commercial situations:

"Mr Soanes by then was obviously concerned about his relations with Mr Mills."

The Tribunal reached that finding. The finding that Mr Soanes did tell Messrs Bayliss and Mills that he had told Mrs Baker and Mrs Shenton to check with the manager against their denial was plainly a finding of fact on that particular point in Mr Mills' favour, although there were disputes of evidence which they resolved in favour of Mrs Baker and Mrs Shenton.

Mr Martin's argument is that in the face of that finding that there had been that enquiry and that response it was perverse of the Tribunal to reach the conclusion that there had been inadequate investigation. That is a matter, of course, on which we do not need to go to the evidence; it is saying that the secondary finding was perverse in that it is not consistent with the primary finding of fact. We do not think there is anything in that point. There had been that amount of investigation, and the Tribunal found to that effect in favour of the employer but the question they were asking themselves was: was there reasonable investigation in the sense made clear in the authorities, that is to say was the investigation conducted by the employer within the band of reasonable conduct of an employer acting reasonably? It seems to us quite impossible to argue that they were not entitled to come to the conclusion which they did. They had in mind, as is clear from their Reasons, that there had been no enquiry of the previous owner to verify or otherwise the main plank of Mrs Baker's and Mrs Shenton's explanations, namely that that was their understanding with her. It does not appear that their enquiries of Mr Soanes went into the past history of whether there had been a practice of such supplies. So far as the findings go it was an enquiry purely as to this transaction, and in our view the Industrial Tribunal were perfectly entitled to reach their own conclusion as to whether the investigation by the employer was within the range of reasonable responses and reasonable investigations by an employer acting reasonably in the circumstances with which the Appellant was faced.

For those reasons we do not consider that either of those grounds of appeal is arguable and such as to justify a full hearing, and insofar as the Notice of Appeal ranges wider and alleges perversity in general we found nothing in the papers which would give any prospect of success, and we therefore dismiss this appeal at this stage.