Hewson v Personnel Hygiene Services Ltd [1994] UKEAT 18_92_1301

EAT

Hewson v Personnel Hygiene Services Ltd

[1994] UKEAT 18_92_1301 · 1994-01-13

MR JUSTICE MUMMERY (PRESIDENT): This is an appeal from a decision of the Industrial Tribunal sitting at Cardiff on the 30th September 1991.

For reasons set out in the decision document, notified to the parties on the 20th November 1991, the Tribunal unanimously decided that the Applicant, Mrs Hewson, was not dismissed unfairly or at all. The Applicant was dissatisfied with the decision and gave Notice of Appeal on the 30th December 1991 complaining in general terms:

"That the decision of the Tribunal was against the weight of the evidence."

and, more particularly:

"That the Appellant was not allowed to bring forward her evidence and was therefore denied the full right to be heard."

The generality of those grounds caused this Tribunal to set the matter down for a preliminary hearing to show whether there was an arguable point of law. The preliminary hearing took place on the 21st December 1992 when it was ordered that the appeal should be allowed to proceed to a full hearing of this Tribunal. Directions were given for the production of the Chairman's Notes of Evidence. Leave was given to amend the Notice of Appeal and for a supporting affidavit to be sworn by Mrs Hewson, in relation to her complaints, and for that affidavit to be submitted to the Chairman of the Industrial Tribunal for any comments that he might wish to make. Since the order of the 21st December 1992 the Notice of Appeal has been extensively amended. It gives particulars of the respects in which it is alleged that the proceedings before the Industrial Tribunal were conducted unfairly and in a manner prejudicial to Mrs Hewson. Mrs Hewson has also sworn an affidavit, on the 16th December, to which she has exhibited relevant documents. The affidavit was submitted to the Chairman of the Industrial Tribunal, Mr Powell, who on the 6th May 1993, wrote a detailed letter to the Registrar of this Tribunal with his comments.

The background is that Mrs Hewson worked for the Respondent under a contract made in 1990, under which she was to be paid for her work, as a management and accounts executive, the sum of £15,000 plus a bonus. The salary was to be paid weekly and subject to review.

The respondent Company is a company within a group, PHS Group, which supplies services to other companies within the Group.

The documents exhibited by Mrs Hewson show that the contract, made by her with the Respondent, was dated the 11th October 1990. There was a letter of 18th June 1990, in which Mrs Hewson wrote to Joan Saunders-Hall, of the respondent Company, accepting the position which she had been offered at £15,000 basic to April 1991, plus an annual bonus to be worked out in accordance with a formula stated in the letter.

In November 1990 a new Company was formed in the Group. The Company was called "Company Care Systems Limited". Mrs Hewson was, on her case, offered the job of Regional Manager.

In March 1991 she said that she was not prepared to accept the job of Regional Manager until her sales team had been set up, but she was preferred to work as an Area Manager and recruit and train a sales team. Her case is that there was no discussion about the salary level under which she was to be paid. She assumed it would be the same £15,000 basic.

The later events can be briefly stated. She was paid by the Respondent at a rate less than the contract with the Respondent provided. She regarded this as a breach of contract on the part of the Respondent. She accordingly resigned as from the 19th July 1991. Her case is that this was constructive dismissal. Her complaint is set out in her Notice of Application of the 27th June 1991. In it she refers to initially joining the PHS Group as a Sales Consultant in 1984 and to her progress in her employment. She refers to the engagement with the respondent Company from the 21st July 1990 and her basic salary of £15,000 per annum plus bonus. She says that there were no complaints about her performance. In March 1991 she was offered the position in Company Care. She explains that she had already been offered the position of Regional Manager, but this would be a move back into sales. She preferred the idea of being an Area Manager.

She states the crux of her complaint. She received a letter stating that her salary was to be reduced to £6,000 per annum basic with commission. That that commission was likely to be extremely low, as she would be starting this team from scratch. She tried to discuss the matter with management but, rather than discuss the matter of salary, they arbitrarily and unilaterally sought to impose this reduction on her and to force her to accept terms different from those in the contract. She did not receive any satisfactory offer. She felt that, in the circumstances, she had no alternative but to resign. Her resignation was forced on her by a breach of contract and a fundamental change in her working conditions. Her case could not have been clearer than is set out in that Notice of Application.

The respondent Company put in a Notice of Appearance on the 20th August 1991. They set out their case in three single sentence paragraphs. Mrs Hewson resigned as from 19th July 1991 by her letter of 17th June 1991. That was accepted. She was offered alternative employment when the salesforce to which she belonged was disbanded for economic reasons, that refers to the economic difficulties that Company Care encountered. Mrs Hewson was informed in March 1991 that her salary would change from April 1991. She continued to work under these terms until June 1991.

It was clear that the issues between the parties were on Mrs Hewson's side, that she had been constructively dismissed by a fundamental breach by a unilateral reduction in her pay. It appears to have been the Respondents' case that she resigned and there was no breach in altering her pay because she had been informed of a change and continued to work until her resignation. The contention is that she agreed to the change in remuneration.

The Industrial Tribunal came to its decision in rather difficult circumstances. The Tribunal in its Reasons (paragraph 1) correctly identified the case as one of constructive unfair dismissal. The Tribunal said:

"This is a complaint of constructive unfair dismissal where the applicant's problem is to establish the conduct of the respondents entitling her to terminate her employment without notice, whether she terminated it with or without notice: she must therefore prove conduct amounting to a fundamental breach by the respondents."

The difficulty that this Tribunal has is in identifying, from the Reasons in the following three paragraphs, what facts were found by the Tribunal relevant to the issue identified in the Originating Application and the Notice of Appearance.

There was identified in those documents an issue as to whether or not there was agreement by Mrs Hewson to a reduction in remuneration. If she agreed, her resignation could not be a constructive dismissal, because no breach of contract would have been committed by the respondent Company. If she did not agree, there would be an issue whether there was constructive dismissal by the unilateral reduction in remuneration.

The reasoning of the Tribunal is unclear. It appears from paragraph 2 that the Tribunal may have been under the impression that the issue was whether Mrs Hewson had, in fact, changed employers. If there had been a change of employers, with her agreement, then there would not be any question of a breach of contract by the Respondent. It is stated in paragraph 2 that:

"Mrs Hewson began working for the respondents in 1984 and in 1990, when working for an associated company, PHS Manufacturing, she was put into a position in a new company called Company Care Systems Ltd, whose existence proved somewhat brief. For some months she continued to be paid by PHS Manufacturing and it appears that her first monthly pay from the new company was in April 1991. In that month she received a letter congratulating her on her promotion to area manager. It is oddly worded because it speaks of her work that year, which as far as the new company was concerned was just beginning; but what concerned Mrs Hewson was that the salary was only £6,000, though with fairly elaborate and encouraging provisions for commission, whereas she had been drawing £15,000 salary, of which we are told - but Mrs Hewson contests this - £10,000 was guaranteed commission. In fact Mrs Hewson's basic salary had been previously of the order of £5,000 or £6,000 and her earnings did not treble when she took up the position from which she entered Company Care. She had had no discussion with the respondents about the form or scale of her remuneration with that company. In these circumstances there could be no breach of contract in not simply reproducing the salary and terms which belonged to the old job."

The difficulty this Tribunal has with that crucial paragraph is first to discern exactly what findings of fact the Tribunal were made relevant to the issues and secondly, how that paragraph can be reconciled with the document in Mrs Hewson's Bundle. It is probably not advisable for us to go any further into what are, or might be, the facts of this case. That is a matter which can only be properly determined by a new tribunal to whom we remit this matter. Anything that we say about the facts runs the risk of or possibly pre-judging or hampering the deliberations of the new tribunal when it embarks on a fresh factual enquiry.

We should mention another point. It appears that the Tribunal failed to focus on the crucial issue of fact between the parties, namely whether or not there was an agreement to a change in remuneration, as a result of the very unsatisfactory circumstances in which this case came before the Tribunal. There is no serious dispute between Mrs Hewson, the Company and the Chairman about the course of events on the hearing date, 30th September 1991. There is some slight, unimportant, difference of recollection and detail between the Chairman and Mrs Hewson. We shall ignore those points of detail. The essential facts are these. This matter came on for hearing on a day when the Tribunal was pressed with other business. The parties, who travelled some distance to the Tribunal, were unwilling for the matter to be adjourned to another day. A consequence of this was that the hearing was brought on at 10 minutes past 2 and was all over in 35 minutes. During the course of the hearing, the main evidence, given by Mrs Hewson, was elicited by questions put to her by the Chairman. Answers were given by Mrs Hewson without her being given a full opportunity to give her own evidence in chief from her prepared statement in writing and without a proper examination of relevant documents in the bundle of documents provided by her.

The Tribunal is, of course, entitled to ask questions and expect answers. Under Regulation 8 of the Industrial Tribunals (Rules of Procedure) Regulations 1985:

"The tribunal shall conduct the hearing in such manner as it considers most suitable to the clarification of the issues before it and generally to the just handling of the proceedings"

Unfortunately, the method adopted did not clarify the issues. In fact, it had the reverse effect. The issue identified in the documents exchanged between the parties was not, accurately identified in the Decision. The matter was not improved by the fact that the Tribunal considered, in the light of Mrs Hewson's answers to the Tribunal's questions, that there was no case to answer. The result was that the Tribunal heard no oral evidence or argument from the Respondents. It did not consider any documents provided by the Respondents. In those circumstances, Mrs Hewson can justly complain that she was not given a proper opportunity to present her case either orally or on the documents. The result of the time pressure on the Industrial Tribunal was that the matter was too hastily without hearing the Respondent at all and without hearing Mrs Hewson in full.

We appreciate the pressure on industrial tribunals. We sometimes feel under pressure here with the glut of appeals to be disposed of. We are mindful that there are hundreds of other cases waiting to be heard. That pressure must not, however, be allowed to deprive a party of a fair opportunity to present the relevant facts and arguments. This is particularly important, where, as here, neither party is legally represented. In such circumstances it inevitably takes longer for the Tribunal to make sure that the unrepresented parties have had a full chance to put before the Tribunal all the facts, documents and arguments relevant to the claim

There is no alternative but to remit this matter to the Tribunal. As the Tribunal did not focus on the crucial issue of fact, there are no issues of fact on which we can say that any other tribunal could only come to one conclusion. It has to go back to a different tribunal. This is unfortunate. The Originating Application was issued in June 1991. Time has passed. Difficulties may present themselves for both parties in producing evidence that has not become stale in the meantime.

Mr Bland, for the Respondent, has mentioned a possible difficulty that he may have. Joan Saunders-Hall, who was concerned in this matter, has since retired. We sympathise with the problem but the difficulties are unavoidable. We allow the appeal and remit it to a fresh tribunal.