Franc-Poole v Ravenscourt Laboratories Ltd [1997] UKEAT 66_97_0307

EAT
Franc-Poole v Ravenscourt Laboratories Ltd
[1997] UKEAT 66_97_0307 · 1997-07-03
MR JUSTICE MORISON (PRESIDENT): This is an appeal against a unanimous decision of an Industrial Tribunal held at London (North) which concluded that the applicant had not been unfairly dismissed, as she had resigned; that her complaints of sex discrimination should be dismissed, and that her complaint under the equal pay legislation was to be adjourned pending the receipt of an independent expert's report which they ordered to be obtained, and, finally, that the respondent's counter-claim for breach of contract to recover outstanding course fees from the applicant succeeds.The appeal is against the findings in relation to the alleged dismissal and in relation to the counter-claim.The applicant, Mrs Elke Franc-Poole, was employed a clinical studies manager by the respondent, Ravenscourt Laboratories Ltd. On the hearing of this appeal we have been told by Mr Franc-Poole that the respondent company is in receivership and effectively, therefore, any success on the appeal is likely to be something of a hollow victory. But nonetheless as a matter of principle he has urged us to the view that the Industrial Tribunal has misdirected itself.The respondent company was in the business of providing a clinical trials laboratory. In that capacity it undertakes clinical trials of drugs. That is, it enters into study agreements with drug companies and performs accurate sampling procedures of samples which are provided to them by the drug company, so as to assist the drug company, presumably. in obtaining in due time a licence for that drug. It is clearly, therefore, work of some considerable importance requiring efficiency and considerable accuracy in the work done, and in the reporting of the work thereafter.She became employed by Ravenscourt Laboratories prior to the sale of the business in June 1994. Her husband who has represented her on this appeal, was formerly a management consultant advising the laboratory. After the sale had taken place Mr Franc-Poole was appointed general manager; and she remained in post as the manager of clinical trials.In paragraph 5 of the decision the Industrial Tribunal noted that the laboratory suffered severe financial constraints. Essentially the problems were, according to Mr Franc-Poole, that more staff were needed. There were problems with the information technology. There were administration problems; and there was a problem with the turnover at the laboratory in the sense that they were not processing the samples as speedily as they should have been.In paragraph 5 the tribunal noted that despite all the problems, none of the tests had failed the internal or external audits. Mr Franc-Poole criticises the word "failed", on the basis that it is not possible to fail an audit. All that happens is that shortcomings are noted and trials then have to take place again and one had to go back over the ground. But he does accept that there comes a time when as a result of poor audit reports, it is likely that the drug company will wish to terminate the study agreement.Mrs Franc-Poole as manager in charge of the clinical trials found the financial constraints and the consequential operational difficulties frustrating both personally and professionally. She resigned in December 1994. The proprietor of the business, Mr Costa was extremely unhappy about her resignation and implored her to remain in post, which eventually she did. The tribunal found that she was given an enhanced position working towards the creation of a European dimension to the laboratory's work. Mr Franc-Poole puts it on the basis that that really was another way of saying that she was to be subjected to extra pressure by being given extra responsibility, but she was not provided with sufficient backup staff.On 4th July the tribunal found as a fact that Mr Costa went on holiday and that meanwhile his work was covered by Mr Franc-Poole. By this stage she had found the constraints placed on her by the lack of adequate financial resources and the consequential difficulties in complying with good laboratory practice, really intolerable. On 14th July she wrote a letter of resignation which she faxed to Mr Costa whilst he was on holiday. He spoke to her on the telephone the next day and asked her to keep quite about her resignation in the hope no doubt that he could persuade her not to resign when they had had an opportunity to meet, on his return from holiday.On 24th July a meeting took place. The circumstances of that meeting are in dispute, and the two accounts given of it by the applicant and the respondent are set out in paragraph 10.On 16th August matters came to a head. A meeting was held to discuss problems that had arisen the day before, and during the course of that meeting, the applicant walked out of it.There was some reference to a conversation which took place between Mrs Franc-Poole and one or two members of staff. That conversation was also in dispute. But the tribunal appeared to have accepted what was said by a Mrs Byron and a Judith Swain, recounting to Mr Costa what Mrs Franc-Poole is supposed to have said after she left the meeting; namely, that she intended to supply a sick note for the period of two weeks and thereafter another sick note which would take her beyond the end of her notice period. Effectively indicating thereby, that her resignation of 14th July letter was still in effect. The tribunal made a finding that on 18th August Mr Costa wrote accepting Mrs Franc-Poole's resignation of 14th July and he also wrote a letter setting out his concerns about her behaviour at the meeting on 16th August.In paragraph 15 of the decision the tribunal correctly, in our judgment, defined the issues before them. The first issue was whether the letter of 14th July in which Mrs Franc-Poole resigned, was retracted at the meeting of 24th July with an offer of a new contract in which case the letter of 18th August would be a dismissal, or was the letter of 18th August an acceptance of the resignation letter; if the letter of 14th July was indeed a valid resignation was there a breach of the applicant's contract of employment that meant she had no alternative but to resign.The tribunal having correctly identified the issues for themselves, then made their findings in paragraphs 16 through to 18, and they concluded that the employment relationship had terminated as a result of a resignation on 14th July and an acceptance of that resignation by the letter of 18th August.In paragraph 19 therefore they turned their attention to the question which resulted from that finding, namely:
"Was the resignation a result of a breach of a fundamental term of her contract of employment?"
The tribunal say this:
"The problems which affected Ravenscourt Laboratories were those affecting the company overall. The financial constraints and the consequential difficulties with Mrs Franc-Poole found herself in both personally and professionally arose from those financial constraints. Those constraints were not directed at her and there was no indication ever given to her that the company did not wish to be bound by the contract of employment. On the contrary when she had handed in her resignation in December 1994 Mr Costa had gone to great lengths to persuade her to remain in post. Further, the issues that Mrs Franc-Poole raised as being of concern to her in her ability to perform her job were as far as those financial constraints allowed met. If Mrs Franc-Poole were to be able to argue that a company in financial difficulties had fundamentally breached her contract of employment, it would open the flood-gates for any employee to put forward such a claim where a company was in financial difficulties. The Respondent company was struggling to survive on limited money, the problems which occurred were those which impacted on the company as a whole not specifically on Mrs Franc-Poole. In those circumstances there was no fundamental breach of her contract of employment which would justify her resigning on the grounds that her employer had effectively repudiated her contract of employment. As such the resignation was effective as a resignation not as constructive dismissal. Her complaint of unfair dismissal must fail."
Mr Franc-Poole who has appeared in front of us today, argues that there are circumstances in which financial constraints which prevent an employee from performing his or her duties in an effective way, may give rise to a constructive dismissal situation. He says that the tribunal in this case have erred in law in that they appear to have taken the view that as the financial constraints were not directed at Mrs Franc-Poole, that therefore there could be no fundamental breach of contract. He would argue that an intention to repudiate a contract is not required, and therefore the question as to whether the alleged breach was aimed at the particular employee was an irrelevant consideration, unless they were misdirecting themselves in law.Whilst we can understand the point he makes, it does seem to us that on the fact of this case, it would have been perverse for the Industrial Tribunal to have concluded that there had been a fundamental breach of Mrs Franc-Poole's contract of employment. Having regard to their finding that Mr Costa had gone to great lengths to persuade her to remain in post, that the employers had been telling her that they wished her to be bound by the contract of employment, and that her concerns as to her ability to perform her job were met, in so far as financial constraints allowed, it seems to us that the Industrial Tribunal were fully entitled to arrive at the conclusion that there had been no fundamental breach of her contract of employment. That is not to say that in some circumstances there may be an obligation on an employer to provide sufficient administrative support to enable an employee in a senior and professional capacity to carry out his or her duties. We can imagine that there may be such cases and an Industrial Tribunal would have to consider such a case on its own facts with considerable caution, bearing in mind the flood-gates argument which this Industrial Tribunal have referred to. Accordingly, it seems to us, the decision of the Industrial Tribunal as set out in paragraph 19, cannot fairly or properly be criticised.That leaves only the question in relation to the counter-claim in breach of contract.It seems to us that it is very unclear as to what the Industrial Tribunal has in fact concluded on this point. At the beginning of their decision they appear to have found that the counter-claim for breach of contract succeeds. At subparagraph (4) of their decision, at the end, they make this comment:
"(4) The Respondents claim that the Applicant is liable to reimburse them of the expenditure they have made for her course fees is made out but the Tribunal is unable, through lack of documentary evidence to particularise the quantum of the claim."
It would appear, therefore, putting these two passage together, that what the tribunal may have thought that it had done was to make a finding that there was an entitlement to money, but they did not know how much that entitlement was; and that there was some kind of counter-claim for breach of contract.It seems to us having looked at the statutory provisions that a tribunal is required, if finding that there is a breach of contract, to quantify the claim. If they do not have material before them to enable that claim to be quantified, then they should adjourn the proceedings to enable quantification to take place. In this case we understand Mr Franc-Poole to be arguing that the alleged counter-claim is in any event not correct factually. It arises out of a payment made by the company to Mrs Franc-Poole to assist her in a further course of education to obtain a further degree. On termination of her employment, the employers were seeking to recover that which they had advanced to her. He says that on the facts there was no entitlement to this money because the parties had effectively arrived at a compromise arrangement which disposed of all outstanding claims one against the other. It may well be that the Industrial Tribunal had not considered the alleged agreement point, because they had come to the conclusion that because there was no money involved in the claim, it did not merit much attention.It seems to us, for the sake of clarity, that we should say that our understanding of the position as it stands now, is that in order to establish a claim against Mrs Franc-Poole the company in receivership would have to demonstrate to a court that she was liable to make reimbursement to them for any money; that the finding by this Industrial Tribunal does not entitle them to recover any sums that they may allege are due from her to them. In those circumstances, we do not need to make a formal finding on the appeal in relation to that aspect of the case, because it is our judgment that the Industrial Tribunal themselves have not completed the task which is set for them when they are having deal with a complaint of breach of contract, whether by way of claim or counter-claim. In those circumstances the appeal will be dismissed.