Newbold v Modern Security Systems Ltd [1995] UKEAT 386_94_1805

EAT

Newbold v Modern Security Systems Ltd

[1995] UKEAT 386_94_1805 · 1995-05-18

JUDGE SMITH QC :

This is an appeal by Mr Newbold against a finding that he had not been constructively dismissed by an Industrial Tribunal sitting at Nottingham on 25th February 1994.

The Appellant's case before the Industrial Tribunal was based upon an assertion that in all the circumstances there had been a fundamental breach by the employers of the implied duty of trust and confidence between employer and employee, which had the result that the employee was entitled to, and indeed, obliged to put an end to the employment relationship which he did by a solicitors letter terminating the contract on 18th October 1993.

It is right that I should mention that the applicant was employed as a sales consultant.

The respondent employers strongly denied that they were in breach of contract, and it was their case that they were doing no more than handling a grievance of the appellants quite reasonably in all the circumstances.

The Industrial Tribunal decided that the respondents had not broken the implied duty of trust and confidence, but had dealt reasonably with what were no more than grievances being raised by the appellant. In so finding, they were to some extent critical of the appellant, saying that he had avoided discipline which was outstanding against him, by, in effect, manoeuvring a situation to his advantage, and in this way avoiding disciplinary proceedings.

That is a shorthand way of describing the decision by the Industrial Tribunal.

In the usual course, we sitting as an Employment Appeal Tribunal would be extremely loathe to intervene with a decision of an Industrial Tribunal on such a matter as this. We reminded ourselves particularly of the wise words of Lord Denning in Woods vWN Cars Services (Peterborough) Ltd

[1982] ICR 693

, particularly at 699 at H:

"Conclusion

In the result I think that the appeal tribunal in these cases of constructive dismissal should only interfere with the decision of the industrial tribunal if it is shown that(i) the industrial tribunal misdirected itself in law, or

(ii) the decision was such that no reasonable industrial tribunal could reach it. The appeal tribunal ought not to interfere merely because it thinks that upon those facts it would not or might not itself have reached the same conclusion, for to do that would be for the appeal tribunal to usurp what is the sole function of the tribunal of fact."

Of course we have borne that principle very much in mind. However, the circumstances of this particular appeal before us are unusual arising out of the way in which the proceedings came to be conducted, as a matter of procedure, before the Industrial Tribunal. It is the appellant's principal but not sole ground of appeal here that the effect of a ruling made by the Chairman at the outset of the proceedings and adhered to by him during the course of the proceedings was that unfortunately the appellant was not able to develop his case fully and sufficiently before the Industrial Tribunal on the issue of constructive dismissal, with the consequence that such direction amounted to an error of law. That is the principal submission that is made by Mr Henney who appears on behalf of the appellant.

It is submitted by Mr Scott, on behalf of the respondents, that there was no such misdirection on the part of the Industrial Tribunal.

Before coming directly to the law and the application of the law to the procedure before the Industrial Tribunal it is important that I should just paint the background to the matter in outline at any rate.

In May 1993 the management of the employers came into possession of a security video, which had been available since January 1993, which showed the appellant entering a store belonging to the employers on a Sunday in January 1993, and apparently taking property from the store. When shown the video, the appellant admitted that it was he who was in the store on that day, but stated that he had authority from a Mr Moretto, one of his superiors, a team leader, to take the property in question. The employers wanted to investigate this matter. Meanwhile they suspended the appellant on full pay pending the return from holiday of Mr Moretto. Having spoken to Mr Moretto on his return, they wished the appellant to attend a further meeting. The appellant then said that he could not do so because he was sick. There followed a lengthy correspondence between May and October 1993, which we have had an opportunity of looking at. During this time the appellant remained off sick at all material times until he terminated his employment in October 1993.

During the course of that correspondence, it is clear, in our judgment, that amongst the complaints being made by the appellant, and indeed one of his principal complaints, was an allegation to the effect that the video incident, as a disciplinary matter against him, was, in effect, a trumped-up incident, as part of a campaign of alleged victimisation by the employers against him, which he contended in correspondence had been going on for many months and indeed since about April 1992. I quote in particular two paragraphs from the appellant's letter of 7th July 1993 to Ms Golding who held a position in personnel management with the respondents:-

"I have consulted my solicitor over the incident on 17th January 1993 and a number of other incidents over the past year which can only be interpreted as victimisation. It would appear that the video recording in question was only produced after a meeting [held on 20th April 1993] in which my professionalism had been quested and which I vindicated myself. After that meeting a member of staff who had been present was heard to have said `I am going to get him'.[Referring to me] I think that it is more than just a coincidence that the video recording of me entering the office on the weekend of 17th January 1993 should suddenly be produced. The handling of the matter by Mr Edwards and Mr Smith which was not in line with company procedure was typical of the sort of mis-management I have had to endure since the company restructured in April 1992 and at which time I was informed by Mr Edwards that `no salesman would be made redundant, because we can fire them for not performing'. I feel that I have been `watched' through all of last year and most of this year. Fortunately I managed to achieve target last year and had achieved target for the first quarter of this year."

Well that letter really speaks for itself.

Now this complaint of the appellant in that letter was, as one might expect, reflected in his IT1 before the Industrial Tribunal, particularly at paragraph 10(n) on page 13 of the bundle of documents, in the papers before us, and there is no need for me to read that document. It amounts to an amplification of the same points that are being made in his letter of 7th July 1993.

In our judgment from the above material, it was clearly an important part of the appellant's case on constructive dismissal, that, however reasonable or otherwise the respondents approach might or might not appear to be, looking simply at the exchange of letters between May and October 1993, there was in fact a "hidden agenda" of victimisation beneath the surface.

When the matter came before the Industrial Tribunal, the Chairman apparently directed, (and I will say a word further importantly about what I mean by the word `apparently' a little later on), after hearing a submission from Mr Henney the solicitor acting on behalf for the appellant, who has appeared before us today, that he would not allow the parties to go into circumstances relating to the video incident, in particular the delay between January and May 1993, nor was he prepared to allow evidence to be called relating to the "hidden agenda" allegations made by the appellant in paragraph 10 (n) of the originating application. It was only after some persuasion that he agreed to see the video in question.

We have had the benefit of seeing a full attendance note prepared by Mr Henney from the terms of which it is apparent that the Chairman took the view that all the Industrial Tribunal was concerned with, on the issue of constructive dismissal, was whether the grievance procedure had been fairly and reasonably handled by the employers between May and October 1993. Thus it was that in his closing submission, as appears from the attendance note, Mr Henney found himself limited to saying that "The applicant felt that there had been a hidden agenda, but that had not been explored before the tribunal at its direction." This plainly records that because of the direction that had been given by the Chairman the matters of the "hidden agenda" had not been explored before the Tribunal.

In our judgment, it is plain both from the notes of evidence and indeed from the decision itself that there is no reference at all to these matters of alleged victimisation being referred to in any way, nor do they feature, as I repeat, in any way in the decision made by the Industrial Tribunal. It is right to say, and we have not in any way overlooked the fact, that the applicant, and indeed this point was rightly emphasised by Mr Scott, was allowed to read out the originating application to the Tribunal, including paragraph 10(n). But in our judgment, it is quite apparent that in reality the Chairman by his apparent ruling did impose a limit on the issues which could be gone into during the hearing before the Industrial Tribunal. With regard to my use of the word `apparent' on two occasions, I should make it clear that we have not seen any version by the Chairman himself of his own ruling. Indeed we have had to consider carefully whether the matter should go back to the Chairman to see whether he could help further in the matter. At the end of the day, however, we consider that we must deal with the matter in the light of the attendance note placed before us by Mr Henney. Miss Dunn, the solicitor who appeared for the respondents at the Industrial Tribunal we are told has a perfectly full attendance note but it does not directly deal with the point as we understood the matter. There is no criticism whatsoever of that note for that reason. It certainly does not contradict Mr Henney's note as we understand the position. We consider that we must regard the note as accurate in all the circumstances.

So it is against that rather unusual background that we come to consider the law that we must apply to the particular appeal.

First of all we were referred correctly to the elementary but important proposition in Harvey Volume 4 at T898, of what is a basic principle of fairness. This passage deals with proceedings before an Industrial Tribunal and it goes on in this way:-

"It is a basic principle of fairness that the parties or their representatives should be given the opportunity to be heard on any issue in a case that is likely to be relevant to the decision."

And then we were referred to two authorities which helped us considerably in the view that we should take of this matter. The first one was Aberdeen Steakhouses Group v Ibrahim

[1988] IRLR 420

, a decision of the President, Wood J, of this Tribunal and in particular the passage on page 423 of the President's judgment with effect from paragraph 22 onwards, in these terms:-

"In argument we were referred to the Rules of the Tribunals, 1985 rule 8(1) and rule 12. It is only necessary for us to set out 8(1) in full:

`8(1) The Tribunal shall conduct the hearing in such manner as it considers most suitable to the clarification of the issues before and generally to the just handling of the proceedings; it shall so far as appears to it appropriate seek to avoid formality in its proceedings and it shall not be bound by any enactment or rule of law relating to the admissibility of evidence in proceedings before the courts of law.'"

A little way further down, the President, at paragraph 25 proceeds as follows:-

"... The Tribunals have always had a discretion in their procedures and admission of evidence, which, as we have said must be exercised judicially. The stress of justice ins made by the use of the word `just' in rule 8. Over the years a number of cases have given guidance on the appropriate procedures and on rules of evidence. Examples of these are to found in:[ and then he refers, in particular, to (f) ] (f) Tribunals cannot refuse to admit evidence which is admissible and probative of one or more issues:[ and the authority which the President cites is ] Rosedale Mouldings Ltd v Sibley [1980] IRLR 387."

So that is a very important principle laid down there by the President in that case which we deem it proper to follow.

Then there is another decision to which we must refer from which we derived assistance and that is a decision in the Court of Appeal in Lewis v Motorworld Garages Ltd

[1986] ICR 157

. The facts are not relevant, but it was a case involving constructive dismissal, and therefore it is in the same area with that which we are concerned, and we rely in particular upon the most helpful judgment of Glidewell LJ particularly at pages 170 and 171 of that report where the learned Lord Justice concludes at F (and this is all I need read for the purposes of this judgment, although, the whole of the passage we found very helpful):-

" I therefore conclude that, in considering whether the implied term of trust and confidence had been breached, [ and I pause there to interpose that is exactly the matter of course which the Industrial Tribunal in our case had to consider ] the industrial tribunal excluded consideration of material matters, namely the continuing effect of the demotion and change in wage structure. This was an error of law within the principles of Edwards v. Bairstow [1956] AC 14 , such that this court can properly interfere with their decision. The task of deciding whether the employee had been constructively dismissed was not easy, and I have every sympathy with the industrial tribunal, but in the end the question which they asked themselves was, in my judgment, not the correct question, because it was too restricted. ..."

Obviously, it is very dangerous to apply the facts of one case to another, but we have found that approach to be of great assistance in the circumstances of the instant appeal.

So that is the law that we should apply to the particular matter, and we remind ourselves again of what Lord Denning had to say, which I referred to at the beginning of this judgment. In our judgment, in this particular appeal, the appellant's case, based on an allegation of victimisation, was plainly probative and relevant on the issue of breach of trust and confidence. It may be that there was nothing in it at all. It may be that it was all a smoke screen designed to fog the issues, and if I may be forgiven for mixing my metaphors for a moment, to turn the tables on the employer. The employers strenuously deny that there was anything in it at all from first to last. However that may be, what is certain, in our judgment, it that the direction of the Chairman, as we believe faithfully reported to us by Mr Henney, although not from the Chairman himself, unfortunately had the result that evidence was not properly admitted which was, or might have been, admissible and probative on this issue as whether there had or had not been a constructive dismissal in all the circumstances.

Accordingly, we did not find it necessary to go into the other matters relied upon by the appellants, since we regard this matter as being a material error of law on the part of this Industrial Tribunal and for the above reasons we must allow the appeal, and subject entirely to hearing what the parties have to say on the matter, we would propose that the matter should be remitted to a fresh Tribunal for a re-hearing.

Part of the originating application included a claim under the appropriate legislation, with relation to unpaid holiday pay and unpaid statutory sick pay, in respect of which it was disputed by the respondents that there was indeed any such non-payment, their position being that all proper sums due had been paid. That appears to have been a live issue before the Tribunal. The recollection of Miss Dunn is that it was dismissed by the Tribunal. Mr Henney on the other hand has no recollection of anything being said about it one way or the other. What is quite clear is that it does not feature in anyway in the written decision, and accordingly, we must take the view, that that matter, for one reason or another, does not seem to have been properly dealt with, because it is a matter which clearly should have been the subject of reasons, whatever the decision in respect of it was. Accordingly, that matter will also have to be dealt with by the fresh Tribunal that will hear this matter, unless it can be agreed or settled in the meantime between the parties.