Gordon Lodge Nursing Home v Jama [1994] UKEAT 692_93_1010

EAT
Gordon Lodge Nursing Home v Jama
[1994] UKEAT 692_93_1010 · 1994-10-10
MR JUSTICE MUMMERY (PRESIDENT): This is an appeal against the decision of the Industrial Tribunal held at London North on 30 March and 1 July 1993. For full reasons notified to the parties on 21 July 1993 the Tribunal unanimously decided that Miss Jama was unfairly dismissed from her position as a Care Assistant with the Appellants, Gordon Lodge Nursing Home. Gordon Lodge Nursing Home was dissatisfied with the decision and appealed by Notice of Appeal dated 25 August 1993.On the hearing of the appeal the representation has been the same as in the Industrial Tribunal: Mr Andall for Gordon Lodge Nursing Home and Miss Phelan for Miss Jama. It has been argued by Mr Andall that there are three principal points in the Tribunal's decision on which they erred in law. Before identifying the points and the arguments in support of and against them, it is necessary to look at the facts as found by the Tribunal.Miss Asha Jama was employed at the nursing home from 17 September 1989 until 23 September 1992. In mid-1992, she decided to go on holiday to Germany for three weeks. She was only entitled to three weeks' annual holiday and had already used one of those weeks. An agreement was reached that she should have three weeks' holiday: two would be paid leave and the third week unpaid. She went on holiday on 2 September 1992 and her paid leave ran from then until the 15th. Her unpaid weeks' leave finished on the 22nd. There is some dispute, noted in the Tribunal's decision, as to the exact date when Miss Jama was due back. We are told by Mr Andall that there is a discrepancy in the Tribunal decision between the date when they say she returned to work and the date when both parties agreed she returned to work.In our view, nothing of significance turns on this, but we mention it because of a point made by Mr Andall. He says that, according to both the application and the Notice of Appearance, the parties were agreed that Miss Jama returned to work on 23 September, whereas the Tribunal states at several points in its decision that she returned to work at about 8.00 pm on Tuesday, 22 September. Whichever date she returned to work, there was a disagreement between Miss Jama and her employers. The disagreement arose out of when she was to do duty. It is common ground that, except for one week when she did some reorientation, Miss Jama had always worked on the night shift.The dispute arose from the fact that she was told that she would be working on day duty. Mrs Andall, who was partly responsible for running the nursing home, was insistent on Miss Jama's return that Miss Jama work days. Miss Jama insisted that she would only work nights. The Tribunal found that Miss Jama handed her uniform to Mrs Andall after the argument, marched out of the nursing home and was never seen again.In those circumstances Miss Jama claimed that she had been constructively dismissed. Her case, as set out in the IT1, was that since her agreement had started she worked night shifts. She did not wish to do day shifts. The insistence that she did day shifts was, as she described it, an excuse to sack her.The case for the nursing home was that they never dismissed her; that, before she went on holiday for three weeks, she had been informed by Mrs Andall that duty times would have to be altered if she took a week's unscheduled leave; and that on her return from holiday Mrs Andall told her that she would have to do day duty again for a period, as it had been necessary to re-schedule night duty in her absence. Miss Jama refused to do any of those duties. As another member of staff had been appointed to night duties during Miss Jama's absence, Mrs Andall could see no reason why she should have to change at Miss Jama's whim. Miss Jama refused to take up day duties and walked out.The Tribunal considered the rival submissions in detail and heard evidence from Miss Jama, from Mr and Mrs Andall and two members of the staff. The Tribunal said:
"We have found this a difficult case. We feel that both parties failed to address themselves properly to the situation. Mrs Andall, in her evidence, gave two reasons for the Applicant being placed on the day shift:- (i) the need from time to time for an employee to be re-orientated as to modern practices, and
(ii) the extended absence on holiday required a re-jigging of the shifts and putting the Applicant onto days, albeit on a temporary basis. In the event, we do not think the holidays had anything to do with it. An extra person was brought in, namely Miss Hinds. The shift sheets indicate that the Applicant was listed for 2 weeks on the day shift. The reason we were given was that only two people could be on leave at any one time. We find that neither for the period when the Applicant was on holiday or when she returned were more than two people on leave".The Tribunal went on to say, in a critical paragraph of their decision (paragraph 11):"In the circumstances set out above we find that the Applicant's contract of employment with the Respondents was one for working a permanent night shift and that the variation imposed on the Applicant by the Respondents on her return from holiday was a unilateral variation. It was a variation going to the root of the contract and was a fundamental breach of that contract. In those circumstances, there was an unfair dismissal".On that paragraph Mr Andall raises two points. First, the Tribunal erred in law in its interpretation of the contractual conditions of Miss Jama's appointment. Secondly, the Tribunal erred in law in its conclusion that there was unfair dismissal, apparently on the basis simply that there had been constructive dismissal. He raised a third point on the next paragraph in which the Tribunal dealt with the question of contributory fault. The Tribunal said:"Having found there was a fundamental breach, the Applicant is entitled to a compensatory award. Having found a fundamental breach on the part of the employer which was accepted as a fundamental and repudiatory breach by the Applicant, there cannot be a finding of contributory fault. However we feel that this is a case where the Applicant herself contributed to her own dismissal".The Tribunal then dealt with two matters. First, they found that Miss Jama had been told by Mrs Andall before she went on holiday that she was to go on to days on her return, but raised no objection at the time. Secondly, Miss Jama admitted that on her return she was asked to phone the nursing home before attending for work in order to find out what shift she was on, but did not do so.The Tribunal concluded that the Applicant had acted in an inflammatory manner by appearing on the night of the 22nd without having first phoned, and by insisting on nights. Had she phoned she would have found that she was listed for days. The Tribunal thought that Miss Jama had not acted reasonably.The point raised by Mr Andall is that the Tribunal misdirected itself in law in finding that, as there was a case of constructive dismissal, there could not be a finding of contributory fault which would have the effect of reducing the amount of any compensation awarded. Those are the three points debated on this appeal. We now state our conclusions on each of them.On the first point, we find that there was no error of law on the part of the Tribunal. The Tribunal were entitled to come to the conclusion that this was a case of constructive dismissal. Mr Andall made a number of points on the evidence and the way in which it was treated by the Tribunal. His argument was that the Tribunal should have dealt with two points relating to the Applicant's claim that there was a unilateral alteration in her terms of employment. The first was the reorientation point and second, the re-jigging of the shifts in consequence of the holidays.The case he put forward was that there was not a unilateral variation of the terms of employment resulting in constructive dismissal. There was an agreed variation for one or both of the reasons of reorientation and re-jigging. This was in the context of the arrangement reached between the parties when it was agreed by the employers that Miss Jama could have three weeks' holiday, when her entitlement was only to two. This analysis of the situation was consistent with the Tribunal's own findings in paragraph 12 of the decision. Mrs Andall had told Miss Jama that she was to go on days before her return, but Miss Jama raised no objection. Miss Jama admitted that when she returned she was asked to phone the home before attending for work to find out what shift she was on.We see the force of Mr Andall's submissions. But the points he makes do not amount to any error of law on the part of the Tribunal. It was for the Tribunal, having heard the parties give evidence and the other witnesses, to decide whether, as a matter of fact, an agreement had been made between the proprietors of the nursing home and Miss Jama, whereby her contract of employment, under which she worked only night shifts, was varied to provide for day shifts on her return from holiday.The Tribunal's conclusion was that there was a unilateral variation imposed by the employers, not an agreed variation. That is a conclusion which we cannot interfere with, unless we are satisfied that the conclusion was reached in consequence of a misdirection of law. We find that there was no misdirection. The Tribunal stated in clear terms that the variation was unilateral. It went to the root of the contract and that was a fundamental breach. In those circumstances, we dismiss the appeal on the first point.The second point was that the Tribunal omitted to carry out a crucial stage in the legal analysis of the position. The Tribunal, it was argued, having found constructive dismissal in paragraph 11, concluded that paragraph by saying simply: "In those circumstances there was an unfair dismissal" without, apparently, directing themselves to the exercise which they should carry out under Section 57(3) of the 1978 Act. That requires a Tribunal, in all unfair dismissal cases, to ask not only whether there was a dismissal and what the reason for it was, but also whether the dismissal was fair or unfair, having regard to the reason shown by the employer.The Tribunal must ask whether the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee. That question must be determined in accordance with the equity and substantial merits of the case. Mr Andall's point was that this crucial stage had been omitted. The Tribunal appeared to be in error of law in thinking that every constructive dismissal automatically resulted in an unfair dismissal. On this point he referred to two authorities in support of his proposition that a finding of constructive dismissal does not automatically mean that dismissal was unfair. He referred first to Savoia v Chiltern Herb Farms Ltd [1982] IRLR 166. It appears from paragraphs 13, 17 and 18 of that decision, that the Court of Appeal, while of the view that it would be difficult for an employer to say that a constructive dismissal was fair, thought that there might well be circumstances where it was perfectly possible to make both a finding of constructive dismissal and a finding of fair dismissal.A later decision to the same effect is Stephenson & Co (Oxford) Ltd v Austin [1990] ICR 609, a decision of the Employment Appeal Tribunal. At page 615 Knox J., who gave the decision of the Tribunal, said:
"In these circumstances this seems to us to be a case of the industrial tribunal having done part but not the whole of the tasks that lay before them. Whether or not they took the view that it necessarily followed that if there was a constructive dismissal, there was a failure to pass the test laid down by section 57(3) it is not
clear from their decision. If they had formed such a view it would have been wrong"Reference is made to another case not cited to us, Chubb Fire Security Ltd v Harper where Balcombe J., stated:"...... that there is no mutual incompatibility between a constructive dismissal and reasonable conduct and satisfaction of the requirements of Section 57(3)".Mr Andall's submission was that this Tribunal had apparently thought there was a mutual incompatibility. Hence the wording of paragraph 11 of the decision.Miss Phelan, who has presented the arguments on behalf of Miss Jama, agreed that a constructive dismissal was not automatically unfair, and pointed out that in fact, the Tribunal's attention had been drawn to the provisions of Section 57(1) under which the burden was on the employers to establish the reason for the dismissal. Her broad argument was this. If the employers failed, as she said they did here, to establish the reason for dismissal, then there was no need for the Tribunal to go on to consider the provisions of Section 57(3). She says that, if you read the decision as a whole, it is clear that the Tribunal was not satisfied by the nursing home that there was a reason for dismissal which fell within the terms of Section 57(1). The basis for her submission is contained in paragraph 10, read with the concluding sentence at paragraph 11 when it says: "In those circumstances there was an unfair dismissal".Miss Phelan argues that "In those circumstances" refers back not just to the immediately preceding sentence, which deals with constructive dismissal. It also refers back to paragraph 10. What the Industrial Tribunal did in paragraph 10 was to examine and reject the reasons which Mrs Andall gave for putting Miss Jama on to day shift. As to the first reason (to reorientate staff to modern practices) the Tribunal did not expressly deal with this beyond stating the point. Miss Phelan says that it is hardly surprising that they did not deal with it expressly, since the Notice of Appearance did not even raise the point. Secondly, the re-jigging of holidays of shifts caused by the holidays, which was pleaded, was examined on the evidence. The Tribunal found as a fact that the holidays had got nothing to do with the change of Miss Jama's duty from night shift to day shift.Miss Phelan submits that the Tribunal was not satisfied by the employers that there was a reason for dismissal. Therefore, the dismissal was unfair, without the Tribunal having to consider the questions of fairness and reasonableness raised in Section 57(3).We are unable to accept that submission. It appears to us that, from the way in which the decision is phrased, the Tribunal, having come to the conclusion that there was constructive dismissal, thought that it followed that that dismissal must be unfair. We base that decision on the wording of paragraph 11. It may be that they linked the ultimate conclusion of unfair dismissal with matters earlier in the decision. But this is not made clear simply by the reference in the opening of the last sentence of paragraph 11(2) "In those circumstances".For those reasons we find in favour of the Appellants on the second point. The Tribunal did err in law by assuming that constructive dismissal meant unfair dismissal in every case.The third point we also find in favour of the Appellants. It is clear from the second sentence of paragraph 12 of the decision that the Tribunal was under the wrong impression that, as it was a case of constructive dismissal, there could not be a finding of contributory fault. This is wrong, as appears from two decisions. The first is a decision of the Court of Appeal in Northern Ireland on similar provisions of employment legislation, Morrison v Amalgamated Transport & General Workers' Union [1989] IRLR 361. The Court of Appeal stated (in paragraph 14 of the decision) that there were reported cases which recognised that, in cases in which a dismissal was found to be constructive, there could be contributory fault against the employee constructively dismissed. It was observed by Kelly L.J., that he could find no case law to support the proposition that exceptional circumstances must be shown as a matter of law before a finding of contributory conduct can be made in a case of constructive dismissal. There was nothing, in the statute to suggest such a proposition. He agreed that it may well be that in many cases constructive dismissal did not involve contributory fault, but that it did not mean the two could never exist together.A similar decision was reached by the Employment Appeal Tribunal in Polentarutti v Autokraft Ltd [1991] IRLR 457. In the judgment of the Tribunal given by Mr Justice Knox, the Tribunal followed the view of the Northern Ireland Court of Appeal that contributory fault could be found, even where the employee had been constructively dismissed and that there was no legal requirement that exceptional circumstances had to be found before a finding of contributory conduct could be made. In following the decision in Morrison the Tribunal expressed a preference for that decision over an earlier decision of the Employment Appeal Tribunal in Scotland in the case of Holroyd v Gravure Cylinders Ltd [1984] IRLR 259, cited by Miss Phelan in her skeleton argument. We find that the law is correctly stated in the case of Morrison and the case of Polentarutti and is incorrectly stated in paragraph 12 of this decision.Miss Phelan attempted to argue that the Industrial Tribunal had in fact considered the conduct of Miss Jama and had reduced her award by not making her a further award under Section 74(1). We are unable to accept this submission. It is clear from the structure of Section 74 that the first task of the Tribunal is to assess the amount of compensation in such amount as it considers just and equitable. It is only when that has been done that the Tribunal can proceed under Section 74(6) to find that the dismissal was, to some extent, caused or contributed to by an action of the complainant in which case it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding. That exercise was not conducted by the Tribunal in this case because, for the reasons stated in paragraph 12 of its decision, they did not think that they were entitled to carry out such an exercise, even though they had formed the view that the conduct of Miss Jama was not reasonable and had contributed to her dismissal.The result of the argument on the appeal is that we find against the Appellants on the question of constructive dismissal, but for the Appellants on the question of whether it was an unfair dismissal and for the Appellants on the question whether Miss Jama had contributed to her dismissal. The result must be this, that on these two points the Tribunal was in error of law. The case must be remitted to the Industrial Tribunal to re-hear those two issues and to come to a conclusion on them in the light of the directions contained in our decision on what is the correct legal test.There has been some disagreement between the representatives of the parties as to whether this case should be remitted to the same Tribunal or a different Tribunal. Mr Andall accepted that it was not possible for this Tribunal to reach a decision on these points. These are matters which would have to be dealt with on a remission, but he submitted that the matter ought to be remitted to a new Tribunal. We do not agree. We accept Miss Phelan's submission that this can be properly dealt with by remitting the case to be dealt with, if it is still possible to do so, by a Tribunal composed in the same way as that which heard the case at London North in March and July last year.The result is that the appeal is allowed. The case is remitted to the same Industrial Tribunal to consider the complaint of Miss Jama in the light of the rulings on the question of unfair dismissal and contributory conduct.We now deal with a cross-appeal. A cross appeal was made by Miss Jama in relation to the ruling of the Tribunal in the final paragraph of its decision relating to the assessment of compensation. The Tribunal decided that, on the evidence before them, Miss Phelan had been unemployed for a total of 40 weeks, that is from the date of her dismissal until the hearing before the Tribunal. They therefore assessed her compensation under Section 74(1) on the basis of those 40 weeks. That produced a total of £5,120. That figure does not include any element for loss of future earnings beyond that date. The Tribunal said, in awarding that sum. "However, we do not feel in all the circumstances that it would be just and equitable to make any further award within section 74(1) of the 1978 Act".It is argued by Miss Phelan for Miss Jama that there is an error of law in the decision of the Industrial Tribunal. That error of law is the same as revealed in paragraph 12 relating to the effect of Miss Jama's conduct on her remedies in the case. As already pointed out, the Tribunal erred in law in finding that, although they thought there was contributory fault on the part of Miss Jama, they could not take it into account for the purposes of reducing her compensatory awarded under Section 74(6). That was erroneous for the reasons explained. She argued that, acting on that wrong view of the law, they would not award her under Section 74(1) any more compensation for loss than had been occurred up to the date of the hearing. The reference to "all the circumstances" in the third sentence of the final paragraph of the decision was to the circumstances relating, in particular, to Miss Jama's conduct and whether any account could be taken of that in reducing the award.Mr Andall opposes the cross appeal. He says that the Industrial Tribunal was entitled to come to the conclusion it did on the basis of the very broad wording of Section 74(1) under which the Tribunal can award such compensatory award as it considers just and equitable in all the circumstances. There is nothing in paragraph 13 which shows that the Tribunal mistakenly understood the law.In our view, Miss Phelan is right in her submission that, consequent on allowing the appeal on the unfair dismissal and contributory fault point, the Industrial Tribunal should now look at the whole question of the calculation of the compensatory award under Section 74, including not only contributory conduct under Section 74(6) but also what is the amount considered just and equitable under Section 74(1)? We agree that, although read on its own paragraph 13 of the decision does not appear to be an error of law on the part of the Tribunal, when read with the earlier paragraph it becomes clear that the Tribunal sought to limit the amount which should be awarded under Section 74(1) by having regard to its view of Miss Jama's conduct described in paragraph 12. If we did not allow the cross appeal, the effect might be that Miss Jama's conduct, which the Tribunal did not think was reasonable, would be taken into account both in limiting the amount of compensation she should be awarded under Section 74(1) and also in making a reduction in the compensatory award under Section 74(6). The result of that would be that she would suffer a double deduction from compensation in respect of the same matter, that is her conduct on the occasion of her constructive dismissal. We have decided that, if we did not allow the cross appeal, there would be an error of law in the overall calculation of any compensatory award.For those reasons we shall allow the cross appeal and remit to the Industrial Tribunal the whole question of the calculation of the compensatory award which should be made to Miss Jama including both the assessment on the grounds of what is just and equitable under Section 74(1) and on the grounds of whether there should be a reduction under Section 74(6) and, if so, to what extent?