Busaidy v P F A (Ulair) Ltd [1996] UKEAT 464_95_0602

EAT

Busaidy v P F A (Ulair) Ltd

[1996] UKEAT 464_95_0602 · 1996-02-06

JUDGE C SMITH QC:

This is an appeal by Mrs Patricia Busaidy, the Applicant before the Industrial Tribunal, against the decision of an Industrial Tribunal sitting at Brighton on 23 and 24 January 1995, when the Industrial Tribunal held that Mrs Busaidy had not been unfairly dismissed.

As appears from the findings of the Industrial Tribunal, putting the matter shortly, the Appellant was employed by PFA (Ulair) Ltd, a management company acting as the Popular Flying Association's (PFA) Commercial Manager. The PFA (Ulair) Ltd at the material time provided two services to the Popular Flying Association, namely technical services and administration services.

The Appellant was by July 1991 in charge of the administrative services so provided. The legal framework is of some importance in our judgment. It appears that the PFA, the Popular Flying Association, was an unincorporated association of about 8,000 members run by an Executive Committee. The Executive Committee appoints the Board of Directors of the respondent Company, PFA (Ulair) Ltd. The respondent Company, as a management company, is responsible to that large membership of which the policy-making body is the Executive Committee. The Executive Committee pass down instructions to the Board of Directors who then have to implement them. The Appellant was of course employed as an Executive Officer of the respondent Company.

The Industrial Tribunal in paragraph 3 of their extended reasons set out the issues which they had to determine. It was common ground before the Industrial Tribunal that the Appellant had resigned her position after a meeting held on 20 December 1993 at which the staff on both the Engineering and the Administrative side had attended on the Board of the Respondents to be informed of their pay situation for the coming year 1994. It was common ground before the Industrial Tribunal that of the staff spoken to at that meeting (about seven in all) only the Appellant did not get a pay rise.

The Appellant's case before the Industrial Tribunal was that she had resigned as a result of what she claimed were significant breaches of her contract of employment by the Respondents, so that she had been constructively dismissed within Section 55(2)(c) of the 1978 Act.

The first ground which was argued and relied upon before the Industrial Tribunal was the claim that there had been a breach of an express term of the Appellant's contract of employment that she had parity of pay with the Chief Inspector who was on the technical side in a roughly equivalent post to that of the Appellant.

Her second claim before the Industrial Tribunal was that there had been a series of incidents culminating in a deliberate withholding of the pay increase which we have referred to above, which had been, on her case, previously approved by the Executive Committee which had, so it was alleged, destroyed the implied duty of her trust and confidence between employer and employee.

The Industrial Tribunal held ultimately at paragraph 8 of their decision that they were not satisfied as to either the nature or indeed, the existence of the alleged contract provision linking the Applicant's pay to that of the Chief Engineer, as they wrongly described him. It should have been Chief Inspector. So that that head of claim failed before the Industrial Tribunal.

In paragraphs 9 and 10 they express their deliberations and conclusions in relation to the second limb of the Appellant's claim and finally, express themselves in this way. We read from the last few lines in paragraph 10.

"10. ... After very careful consideration of all the evidence the Tribunal was unable to find that the Respondent had embarked on a course of conduct designed to create an intolerable situation or indeed any other circumstances which would have entitled the Applicant to resign without notice."

Then they say in paragraph 11:

"11. The burden of proving dismissal is upon the Applicant and the Tribunal concluded that the Applicant had not proved that she was dismissed. ..."

Before us, that decision has been attacked by Mr Davidson, appearing on behalf of the Appellant, on a number of grounds. He submitted that the decision by the Industrial Tribunal that there was no breach of the implied term of trust and confidence on the part of the Respondents was a perverse decision. That was the first submission.

He submitted further or alternatively that that decision by the Industrial Tribunal, that they were not satisfied that there been any such breach of trust and confidence arose from the Industrial Tribunal having misdirected themselves in law in relation to the test to be applied in so deciding. The third submission was that the decision that the Industrial Tribunal have arrived at on fact relating to the non-existence, as they found, of the pay parity arrangement was perverse, that is to say in relation to the allegation that there was a term in the Appellant's contract that she was to be given parity with regard to pay increases with the Chief Inspector. Finally, it was submitted that the Industrial Tribunal erred in law in refusing a witness summons for the attendance of Mr Shaw, the Treasurer of the Respondents, in all the circumstances.

Before we consider those grounds of appeal we must look at the evidence before and the facts found by the Industrial Tribunal. What we say in that regard is no more than a summary of the way in which the Industrial Tribunal themselves set out the matter in detail in paragraphs 5, 6 and 7 of their extended reasons and reference should be made to those extended reasons for the detail of the matter. Of course it may be necessary for reference to be made to the documentation in more detail which the Industrial Tribunal referred to in paragraph 6, in particular, of their decision.

There can be no doubt, from the findings of the Industrial Tribunal, particularly in paragraphs 7(vi) and (vii) that the Appellant had been critical of certain expense claims which had been put forward by Directors in 1992 and 1993. The plain suggestion before the Industrial Tribunal, made by the Appellant, was that because she was "a thorn in the side" of the Directors in relation to those expense claims, and also because of more immediate matters connected with her strongly-worded criticisms of not being consulted in relation to the decisions with regard to pay, particularly by her letter of 28 November 1993, that the Respondents had decided for that reason deliberately to withhold the pay increase from her. To put it another way, it was her case that the pay increase was withheld for extraneous reasons connected with her conduct and unconnected with the merit of the decision with regard to pay. That was the case which was made before the Industrial Tribunal and which the Industrial Tribunal held had not been established.

The Industrial Tribunal set out, in particular, the sequence of events relating to the proposed pay increase in sub-paragraphs (viii) to (xiii) of their decision. In summary they found that there had been an Executive Committee meeting on 26 November 1993, when a rise of 2% had been agreed by the Executive Committee on the recommendation of Directors of the Respondents.

The Industrial Tribunal referred in their findings to the Appellant's understanding of that decision as amounting to a decision that there was to be a pay increase of 2% across the board. However, the Industrial Tribunal also had evidence before it from Mr Underhill, the Chairman of the PFA and the Managing Director of the Respondents, and Mr Jones, another Director of the Respondents, that it was not 2% across the board that had been decided upon by the Executive Committee but rather it was 2% of the current salary budget and that the question of apportionment and implementation of that overall amount, within those parameters, was to be a matter for the Board of Directors of the Respondent company.

The Industrial Tribunal then set out the exchange of letters between the Appellants of 29 November 1993 and the Respondents of 13 December 1993. It is clear in addition from the documents, that the Directors had had a meeting on 11 December 1993 (see pages 83 and 84 of the bundle before us) from which it is apparent on the face of the record of what had taken place at that meeting, that a decision was taken to deal with the administrative staff by means of differential pay increases rather than 2%.

The Industrial Tribunal then made important findings in sub-paragraph (xiii) as to what had happened at the meeting which we have referred to above, namely the meeting on 20 December 1993, to the effect that the Appellant had been told that she would not be getting any pay rise because of the following factors:

(a) The financial situation of the Respondent;

(b) She had had significant pay rises in previous years; and

The submission was made to us that those reasons then put forward by the Respondents were so demonstrably false that it follows that the Industrial Tribunal's eventual decision on the issue of breakdown of trust and confidence was perverse. We cannot accept that submission. In our judgment the fact that the Industrial Tribunal found, as they did, that funds were available to pay the Appellant the increase is not inconsistent in our judgment with a general statement made by the Respondents at the meeting relating to the financial situation of the Respondents. It was clearly correct on the evidence before the Industrial Tribunal that the Appellant had received substantial pay rises in previous years. With regard to the expression that Mrs Yeend and others were falling behind the Appellant, in our judgment such a statement cannot be construed as being limited to a strict comparison of the percentage increases received by the Appellant on the one hand and Mrs Yeend and others on the other hand, but could well refer, as a matter of industrial relations practice in connection with pay increases, to the issue of whether Mrs Yeend was being paid a proper rate for the job which she was doing.

Accordingly, we cannot accept that the finding of fact made by the Industrial Tribunal was perverse on the basis that they were bound to reject the Respondents' explanation for not giving the Appellant a pay rise as spurious. In our judgment no such conclusion can be properly drawn, especially as the Industrial Tribunal had evidence that the implementation and apportionment of the overall increase between individual employees was a matter for the Board.

As we understood the submission that was made to us in relation to the allegation that the Industrial Tribunal's decision was perverse, it was very strongly based, if not wholly based, on this particular aspect of the Industrial Tribunal's decision. However, we have looked at the entire way in which the Industrial Tribunal approached this particular issue of fact which they had to determine and we are satisfied that it is not arguable here that their decision was perverse. It is well established that a very high standard has to be demonstrated before any finding can possibly be so characterised and in our judgment, this particular finding by the Tribunal can in no way be impugned on any such basis.

We turn next to consider the next ground of appeal in regard to the findings of the Industrial Tribunal in paragraph 10, namely the submission that was made to us that the Industrial Tribunal did not apply the correct legal test by which they judged whether the Appellant had established her case that the Respondents had undermined the relationship of trust and confidence. We were rightly and helpfully referred to the well known case of Woods vWM Car Services Ltd

[1981] IRLR 347

and in particular, a passage from the headnote, correctly summarising the judgment of the then President of the Employment Appeal Tribunal, Browne-Wilkinson J in these terms:

"It is clearly established that there is implied in a contract of employment a term that the employers will not, without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. To constitute a breach of this implied term, it is not necessary to show that the employer intended any repudiation of the contract. The Industrial Tribunal's function is to look at the employer's conduct as a whole and determine whether it is such that its cumulative effect, judged reasonably and sensibly, is such that the employee cannot be expected to put up with it. ..."

We find this a most helpful and comprehensive definition of this particular principle. We were also referred to the case of F C Gardner Ltd v Beresford

[1978] IRLR 63

, another decision of the Employment Appeal Tribunal where again the principle there laid down by Phillips J is correctly recorded in the headnote in these terms:

"Although in the present case there was no express contractual term relating to pay increases, in most circumstances it would be reasonable to infer a term along the lines that an employer will not treat his employees arbitrarily, capriciously or inequitably in matters of remuneration. ..."

In that case the matter was sent back to the Industrial Tribunal to see whether:-

" ... there was evidence to support a finding that the employers were deliberately singling the respondent out for special treatment inferior to that given to everybody else and that they were doing it arbitrarily, capriciously and inequitably ..."

That was the way in which the test was there put. In our judgment, if one then looks at the way in which the Industrial Tribunal put the matter in the instant case, in paragraph 10, they plainly posed themselves the question whether:

" ... the Respondent had embarked on a course of conduct designed to create an intolerable situation or indeed any other circumstances which would have entitled the Applicant to resign without notice."

The main criticism made of this way of approaching the matter relates to the submission that the word "designed" is there understood and used by the Industrial Tribunal in the sense that the Industrial Tribunal appear to have thought that the Respondent had to intend to repudiate the contract whereas in fact the test relates to the objective nature of the conduct complained of not to the intention lying behind the conduct.

We reject this criticism. In our judgment it is clear, looking at the way in which the Industrial Tribunal put the matter and not construing their words as though they were a statute but rather looking with commonsense at the way in which the Industrial Tribunal put the matter, and giving a fair and sensible reading of the words which they used, that the Industrial Tribunal were setting out the correct test, namely whether what the Respondents had done had in fact created an intolerable situation. In our judgment it is important that decisions of this kind given by Industrial Tribunals should not be read in an over-legalistic or over-formalistic manner like a statute, but that the words that they have used should be given a commonsense and practical interpretation. Applying such a canon of construction in our judgment it is clear that in substance the Industrial Tribunal applied the correct test. Accordingly we must reject the second ground of appeal.

There were two further grounds of appeal, both of which relate to the second string to the Appellant's bow, before the Industrial Tribunal, namely the claim that she was entitled contractually to have pay parity with the Chief Inspector.

The first submission was made to us was to the effect that the finding in paragraph 8 of the decision was a perverse finding, namely the finding that they were not satisfied as to either the nature or indeed, the existence of any such contractual arrangement. The submission was made to us that Mr Shaw did not give evidence before the Industrial Tribunal and since the claim was being made by the Appellant that the arrangement had been arrived at between herself and Mr Shaw, the Industrial Tribunal were plainly wrong and perverse in not accepting the Appellant's evidence which was to the effect that such an agreement had been made.

We cannot agree with that submission. In our judgment it is plain in that there was evidence from Directors, namely from both Mr Underhill and Mr Jones, that any such agreement would have been reduced to writing and additionally there was evidence before the Industrial Tribunal that a particular arrangement which had been reached with regard to the Appellant's car had been reduced to writing.

In those circumstances, in our judgment there was evidence before the Industrial Tribunal which entitled them to reach the finding that they were not satisfied that the contractual claim had been made out on the balance of probabilities.

We turn finally to consider the ground of appeal which relates to the matter of the refusal by the Industrial Tribunal to grant a witness summons in the case of Mr Shaw. It is apparent to us, having looked at the contemporaneous documents that a very late application was made for a witness summons by the Solicitors then acting on behalf of the Appellant. The application, indeed, was only made on 18 January 1995, a matter of five days before the hearing. It was refused by another Chairman of Industrial Tribunals by letter and his refusal was confirmed by letter dated 20 January 1995, on the ground that it was being made far too late. There was no appeal from that decision.

It was suggested by Mr Davison, perfectly properly, that the application may have been repeated at the commencement of the hearing before the Industrial Tribunal on 23 January, but firstly we have seen the Chairman's notes of evidence and he has no recollection of any such application having been made at that time. Secondly, the learned Chairman states that it would have been his normal practice to have recorded any such application being made to him at the hearing and he has made no such record. Thirdly, we are told by the Solicitor who appears before us on behalf of the Respondents, Mr Doman, who was present at the hearing before the Industrial Tribunal, that no renewed application was made at the commencement of the hearing in relation to the witness summons.

In those circumstances, in our judgment, there is no possible ground of appeal in relation to the witness summons. It appears to us that the matter was not even before the Industrial Tribunal at the hearing but had been only been before another Chairman at some time between 18 and 20 January and in our judgment it cannot be said that the refusal of the witness summons by that Chairman was in any way erroneous in law. Plainly that Chairman had a discretion as to whether to allow a witness summons at such a late stage and in rejecting such an application he was acting well within the proper principles for the exercise of that discretion. Accordingly, that ground of appeal also is rejected.

It is clear from the Industrial Tribunal's decision, particularly paragraphs 9 and 10 of the decision, that the Industrial Tribunal took care to look at all the relevant matters, weighed up all the competing arguments and all the points for and against the contentions that were being made to them and, in our judgment, asked themselves the correct question as a matter of law and came to a reasonable conclusion, well within the bands of reasonableness, on what was ultimately a question of fact for the Industrial Tribunal to decide, and in those circumstances and for those reasons, this appeal must be dismissed.