Hogan v ACP Heavy Fabrications Ltd [1994] UKEAT 340_92_1504

EAT

Hogan v ACP Heavy Fabrications Ltd

[1994] UKEAT 340_92_1504 · 1994-04-15

JUDGE J HULL QC:

We are very grateful to both Counsel for the careful and economical way they put their arguments in this case. There are two points in the appeal and we propose to deal, as we said in argument, only with the first point.

Mr Hogan is a driver of heavy goods vehicles and his employment with the Respondents began on the 11th February 1989. On the 29th March 1991, when he had been employed for more than two years, he returned to the depot and was confronted with an ultimatum. He was to be transferred to another Company and his pay was to be reduced by £1.40 per hour. That was a repudiation of his contract of employment. There can be nothing more fundamental to such a contract than the pay which is paid, and it was not merely a trivial variation, it was a very, very substantial reduction in his pay which was not merely proposed, but was to be insisted upon, this was not negotiation at all. In those circumstances he was, in effect, put to his election as a matter of common law, leaving aside entirely the position under the employment legislation. He could, if he wished, knuckle under and say "very well" and he could elect to continue with the contract as varied with a new employer substituted and with much lower pay. That was one option open to him. Alternatively, he could, within a reasonable time, say, "I am not accepting this, this is a repudiation of my contract and I propose to treat it as ending my contract of employment". Within a reasonable time he was bound to do one or the other. But if he said, "I accept this repudiation as terminating the contract", then that was something which was entirely up to him. It was a right which he undoubtedly had in law and in those circumstances he would be taken to be, as it is called, constructively dismissed. His employers would have behaved in such a way that they had repudiated the contract and he would have accepted that behaviour as terminating the contract. People would say, in ordinary language, "he resigned".

It is very important to notice that the word "resigned" has many different meanings, or rather covers many different situations in law. For example, if a man says to his employer one day "I am resigning at once" he is, on the face of it, doing something which is wrong, if nothing else has passed before, he is leaving without the notice which is required by his contract. That is one meaning of resignation. The employer may say "I am not having this, I want to hold you to your contract", so that is one possible situation. Again, a man may say "I resign" meaning "I am going to resign lawfully, I am going to terminate the contract myself by giving proper notice". Yet a third situation is that a man may say "I resign" meaning, merely, "I propose now to negotiate terms with you if you will negotiate with me". Those are all possible meanings of the word "resign" and here we have a fourth possible meaning where the employer has been guilty of conduct which entitles the employee to treat the contract as at an end and the employee says "I accept it".

In fact what happened on this occasion was that, as the Industrial Tribunal put it,

"At that meeting with Mr Wilson, Mr Hogan has told us that he was told that he could take it or leave it. We accept that evidence and we accept that he was clearly upset. He rejected the position and walked out of the meeting."

and, says Mr Dean on his behalf today, that should have been sufficient; he was thereby clearly indicating that the contract was at an end and he was accepting this repudiation. We do not decide this case on that basis because such conduct might well be construed in reality as being no more than an upset man giving an immediate reaction which he certainly did not intend to have final effect in law. It might be treated as a "heat of the moment" case in which the employee was reacting instinctively, losing his temper perhaps, but in truth ought not to be held to what he said and did until some time had elapsed for him to think it over and give a rational response - either I am going to knuckle under or I am going to say no I am not going to have this. At any rate that was what the Tribunal found as a matter of fact. They go on:

"That night Mr Hogan, by his own admission, became much the worse for drink and he sought out the managing director of the company, Mr Dalby, who was in a local public house, with some other directors."

of course, no doubt, in full view of some members of the public, we do not know who they were but there may have been a number of people present.

"What happened during the few minutes that Mr Hogan was in the public house was, in our view, quite unacceptable by any standards. He behaved in a manner which was aggressive and bordering on the violent. He swore excessively and was extremely abusive to Mr Dalby. Mr Dalby, himself, clearly found the position totally unacceptable as would, perhaps, a significant majority of members of management."

This was Good Friday. The next week was, apparently, a week off and on the following Friday Mr Wilson drafted a letter dismissing Mr Hogan. Mr Hogan returned to the employers' premises on the Monday and was handed the letter of dismissal.

The Tribunal had to consider the effect of all these events and they had to decide whether what happened on Good Friday amounted to a constructive dismissal. They said in paragraph 6:

"First, there has in this case quite clearly been a unilateral variation of contract. The respondent company told Mr Hogan that his terms would change in a significant way. At that point, Mr Hogan purported to resign, during a heated exchange with Mr Wilson. If that had been a real resignation there would clearly have been a constructive dismissal and the date of dismissal would have been Friday 29 March 1991. . .

Alternatively, if Mr Hogan's "resignation" was indeed a comment offered in the heat of the exchange with Mr Wilson, and was not a resignation accepted by the respondent company, then dismissal did not take place until the following Friday, when the letter purporting to dismiss Mr Hogan was handed to him.

Having considered these facts carefully, we take the view that dismissal did in fact take place only at the later date, when the letter of dismissal was handed to Mr Hogan. Although he did use words indicating resignation at the earlier stage, these were offered in the heat of the moment and it was quite clear that Mr Wilson did not accept a resignation. He has told us in evidence that he attached no importance to the phrase used."

So there twice the Industrial Tribunal has, on the face of it, lent weight to something which was quite irrelevant. Of course it was highly relevant to look and see what was said and what the true meaning of it was, the purport, to use the phrase of the Industrial Tribunal; and it might be very important to consider whether it was a heat of the moment case in which in fairness and justice nobody should attach much weight to what was said but should give a little space to see whether the employee really meant it. But to go on twice and say that this was not accepted by the Works Manager, Mr Wilson, seems to suggest that the Tribunal had it in mind that to lead to a finding of constructive dismissal they would have to find that the resignation was accepted - was in the nature of a contractual offer, which had to be accepted to be effective; if so, the Tribunal were in error as a matter of law. As I have said, the employee was entitled unilaterally to say "I accept your repudiation as ending the contract".

Now it may be because of that error that the Tribunal did not go on to address themselves to the obvious question. If Mr Hogan did not mean it, what on earth did he mean when he went round and swore at, and almost threatened violence to, his own Chairman and Managing Director later that evening? One could hardly imagine, on the face of it, a much more emphatic statement by the employee that he regarded his employment as being at an end. If there were a different view, and if he were saying to himself - well I rather regret having treated my employment as at an end, I think I ought to knuckle under here, the employment situation is very bad, and I think I ought to go back and say I ought to carry on - can one imagine anything less conducive to that process than the conduct which the Tribunal found happened that evening?

It is not necessary to say more than that. It was for the Tribunal to consider whether Mr Hogan was knuckling under or whether he was accepting the threatened breach as being a repudiation of his contract. They appear not to have considered in any way what took place at the public house as relevant to that question but instead, in effect begging the question, to have said "Well the employment continued and this amounted to a repudiation of it by the employee so that he was dismissed" and to have held that his conduct contributed 80% to that although, in fact, it was unfair because disciplinary procedures and so on were not observed and because his employers' own behaviour in springing this reduction on him had undoubtedly contributed to his own bad behaviour.

It seems to us that the Tribunal undoubtedly fell into logical error. It was their duty to consider all the circumstances. Of course they had the disadvantage that they were not assisted by solicitors or counsel and no doubt the facts were not presented in a logical way to them but we think that this Tribunal fell into error as a matter of law in not considering whether that behaviour, that night, undoubtedly conveyed to any reasonable person that the contract was at an end. It may very well be that that error arose because the Tribunal were concentrating on whether what had happened in the afternoon amounted to an acceptance of the repudiation. There they were erroneously thinking that it was important that the employer had not accepted the purported resignation.

My colleagues and I feel that it would be idle for us to speculate any further on that; what we do feel is that this decision cannot stand. It is not for us to try the case or form a view of the facts ourselves. We might have reached various conclusions had we actually heard the evidence, which we have not. We think that there is no alternative but to send this case back for a new hearing by a differently constituted tribunal. That tribunal will have to consider, amongst other things, whether in truth this application was made out of time or whether the true view is that it was made in time, in June, and whether when the later application was received it was not intended to be a substitute for the first one, but was simply adding grounds to it, or, if this were possible, was a second application to be heard at the same time. Those are all matters for that tribunal.

Secondly, if that tribunal does find that there was an unfair dismissal it may, or may not have to consider the question of contribution and we think it out of place to go into the question of the 80% reduction which this Tribunal allowed, except to say what is obvious that that is a very high reduction, and made in circumstances where the Tribunal found that there had been an unlawful and very provocative and unacceptable piece of behaviour by the employers. We stopped Mrs Krone from addressing us on that and we feel that it would be better that we say no more about it and leave that entirely, if it arises, as a matter for the tribunal which is to hear this application.

In those circumstances we remit the entire matter to a tribunal differently constituted to consider the matter anew and to hear such evidence as the parties choose to lay before it.