Norwest Co-Operative Society Ltd v Connolly [1994] UKEAT 371_91_3003

EAT
Norwest Co-Operative Society Ltd v Connolly
[1994] UKEAT 371_91_3003 · 1993-05-04

JUDGE HAGUE QC :

This is an appeal brought by employers against a decision of an Industrial Tribunal sitting at Manchester and entered in the register on 11 October 1991. The Tribunal found that the employee, Mr Connolly, had been constructively dismissed by the employers and that his dismissal was unfair, and awarded him compensation. At the conclusion of the hearing before us, we announced our decision that the appeal would be allowed for the reason that there had been no dismissal within section 55(2) of the Employment Protection (Consolidation) Act 1978, and we now give our reasons.Mr Connolly had worked for the employers ("Norwest") since November 1983, initially as a furniture salesman. On 22 May 1989, he became a trainee motor sales executive at Norwest's premises, Barrow Motors, Northenden. This involved a 12-month training period, including an initial 12-week probationary period. About a month later, Mr Ryan was appointed manager. Mr Connolly successfully completed the 12-week probationary period, and was then provided with a company car, which was unusual for a trainee. The relationship between him and Mr Ryan was good up to about January 1990. At about the end of that month, Mr Connolly was sent on a Ford training course. He successfully completed his traineeship and so became a full salesman in May 1990.However, following Mr Connolly's return from the Ford training course in about February 1990, his relationship with Mr Ryan deteriorated, and his performance became unsatisfactory. The Tribunal found (in paragraph 3(vi) of their Decision):
"The applicant made a good start but during the time from February 1990 lost confidence and found it difficult to face customers and see a deal through to a conclusion. Having been very punctual he started being late on occasions and his appearance deteriorated. He had during this time some personal difficulties outside of work."
Matters came to a head on 5 July 1990, when Mr Connolly was called to a meeting with Mr Ryan, at which Mr Connolly's performance, difficulties and appearance were discussed. The Tribunal found that Mr Connolly was then told by Mr Ryan that if his sales performance did not improve he would be dismissed or that he could hand in his notice straight away. Mr Connolly said he would think about it and left, but came back later the same day with a letter saying:
"As from today I'm handing one month's notice"
. Mr Ryan did not attempt to dissuade him from giving notice, and Mr Connolly did not try to withdraw it. Mr Connolly was paid and kept his company car for a further month. Another Industrial Tribunal on a preliminary issue held that his employment terminated at the end of the month, i.e. on 5 August 1990.Although there are passages in the Tribunal's decision which can perhaps be read as indicating that they thought there had been an actual dismissal on 5 July 1990 that would be inconsistent with Mr Connolly's own evidence and with the finding of the other Industrial Tribunal, and untenable. We think it is reasonably clear that the Tribunal considered that there had been only a constructive dismissal under section 55(2)(c) of the Employment Protection (Consolidation) Act 1978 (which the Tribunal expressly referred to). The relevant part of section 55(2) reads:
"(2) Subject to subsection (3), an employee shall be treated as dismissed by his employer if, but only if -
...................(c) the employee terminates that contract, with or without notice, in circumstances such that he is entitled to terminate it without notice by reason of the employer's conduct."It is settled by Western Excavating (ECC) Ltd v Sharp [1978] QB 761 that for this purpose, the employer must have committed a significant breach of the contract of employment amounting to a repudiation which the employee is entitled to accept. Mere unreasonable conduct of an employer, not amounting to such a breach, is not enough.The Tribunal did not refer to the Western Excavating case nor did they direct themselves that there had to be a significant or "fundamental" breach of contract by the employer. In making their finding that there had been a dismissal, they mentioned a number of matters which they found had the result that by 25 July 1990 "all mutual trust and confidence had gone" but made no finding that any of those matters constituted a breach of contract, let alone a repudiatory breach entitling Mr Connolly to terminate the contract.Among the matters causing the loss of mutual trust and confidence mentioned by the Tribunal were the fact that salesmen had been recruited who had previously worked with Mr Ryan, the fact that Mr Connolly (who was junior to the other salesmen) was asked to move out of the main salesroom temporarily to make room for one of them, pressure on him to obtain sales, his timekeeping and poor approach to customers, and the holding of the meeting of the 5th July 1990 itself. It is in our view plain that none of these constituted any breach of contract on the part of Norwest. The Tribunal also mentioned in their outline of the facts certain incidents (involving damage to a car on the forecourt, a car stolen from outside Mr Ryan's home and the cleaning out of a customers's car), but did not suggest that any of these involved any breach of contract by Norwest or refer to them in their discussion of section 55(2)(c).The Tribunal found that Mr Connolly had been given no encouragement after returning from the Ford training course in February 1990. But the Tribunal did not find that Norwest was under any specific positive contractual obligation to provide such encouragement, nor is such an obligation implied. The Tribunal also referred to Norwest's Staff Handbook, which included as Appendix D a "Statement of Training Policy" containing the following:
"4. That there will be a staff appraisal, counselling or performance-related system as appropriate to the needs of the Society with the opportunity for individual employees to discuss their performance appraisal or rating."
The Tribunal made no finding as to whether this formed part of Mr Connolly's contract of employment, but even assuming it did, we found it impossible to see how Mr Ryan's failure to hold a formal appraisal meeting with Mr Connolly before the 5 July 1990 could constitute a repudiatory breach by the employers of the contract. There was some suggestion that such an appraisal meeting ought to have been held when Mr Connolly completed his 12-month training period in May 1990, but Mr Connolly continued working well after that, and so would in any event thereby have affirmed his contract of employment.The Tribunal also appear to have placed a good deal of reliance on their finding that "Mr Ryan accepted the resignation without question and made no attempt to persuade the applicant that he should reconsider a decision following what he himself described as `an angry reaction' by the applicant", commenting that "this confirmed that Mr Ryan wanted the applicant to go". In our judgment, the question whether Norwest had committed a repudiatory breach of contract must be tested at the time when Mr Connolly handed in his resignation and so terminated his contract of employment. There is no duty on an employer to try to persuade an employee to withdraw his resignation, and Norwest's conduct subsequent to the termination of the contract was irrelevant: see Gaelic Oil Co v Hamilton [1977] IRLR 27 . Further, the fact that Mr Ryan wanted Mr Connolly to go cannot amount to a breach of contract.Mr Sales, on behalf of Norwest, argued that as the Tribunal in its finding of a constructive dismissal appear to have applied a test of unreasonable conduct by the employers, and that their findings and reasoning could not support a finding of a repudiatory breach of contract as required by the Western Excavating case. For the reasons we have given, we accept this argument, and accordingly find that there was no dismissal within section 55(2) of the Act. Mr Sales also put forward a number of further arguments, but in the circumstances we do not find it necessary to deal with these.In the result we allow the appeal and dismiss Mr Connolly's application.