Woodhall v Greggs Plc (t/a The Bakers Oven) [1999] UKEAT 717_98_1304

EAT
Woodhall v Greggs Plc (t/a The Bakers Oven)
[1999] UKEAT 717_98_1304 · 1999-03-01
At all material times Mr Norman Woodhall ("the Applicant") was employed by Greggs PLC trading as The Bakers Oven North ("the Respondents") as a bakery operative. By an 1TI of the 17th June 1996 he complained of unfair constructive dismissal. That complaint together with a complaint that there had been unauthorised deductions from his wages came before an Industrial Tribunal held at Newcastle in August 1997. By way of Extended Reasons of the 2nd December 1997 the Industrial Tribunal found that there had been a breach by the Respondents of the contract of employment such as would have entitled him to terminate the contract. Given that he had not in the event terminated the contract the Industrial Tribunal felt unable to find constructive dismissal and dismissed the complaint as such. The Applicant appeals contending that this dismissal reflects a misdirection as to law. At the outset of the hearing before us, we allowed an application by the Respondents to cross-appeal out of time so as to contend that Industrial Tribunal's finding that there had been a breach of the contract of employment also reflected a misdirection as to law. It is to be observed that their point had been foreshadowed in their Respondents' Answer. Both the appeal and the cross-appeal substantially turn upon the chronology to which we turn, having added for completeness, that the second complaint was ultimately settled; and that by way of Review Hearing held on the 10th March 1998 the Industrial Tribunal ruled that the 1TI had been presented too late to afford jurisdiction with respect to an alternative complaint of express dismissal on the 18th February 1996.1985 - The Applicant entered this employment. Thereafter he was often on night shift; from November 1993 he was permanently on such.29th October 1993 - The written terms and conditions of this date evidenced his contract. The terms specified working by reference to a shift pattern:
" ..... these hours and shift patterns may be changed at some future date after consultation and subject to two weeks' notice as a result of trading requirements."
September 1996 - A down turn in business led the Respondents' management to conclude that it was necessary to reduce the night shift by eight persons: three should transfer to the day shift and five should work on a support shift, covering sickness and holiday absences.8th, 15th, 24, 25th and 29th January 1996 - There were a series of meetings involving management, the Applicant (and others affected) and the Union. In the result it was made plain to the Applicant that as from the 18th February he was no longer to be on night shift and there would be some interim allowance paid to ameliorate the undoubted potential loss of income (put by the Applicant at £199 a month). For his part the Applicant made his dismay and opposition abundantly plain. One particular issue merits mention: management's interpretation of the application of a 'last in first out' policy was not shared by the Applicant. At the last meeting he was told "he would get six months night shift allowance until 18th August 1996 and that two weeks notice would be given from 3rd February to take effect on 18th February." There are no specific findings but we infer that those dates were adhered to.4th March 1996 - The Applicant wrote to management:
"I am unable to accept the changes discussed with you on the above date. I wish to go through the company procedure after having taken advice in this matter and I will bring in the Baker's Union."
18th March 1996 A grievance meeting was held by the General Manager attended by the Applicant and a Union representative. "He complained of his loss of earnings, that he was constantly on day shift and that he was regarded as a permanent casual worker. He claimed his contract had fundamentally changed. He also challenged his selection." Save that he was told that he would have first refusal when the next night shift vacancy arose, his grievance was rejected.23rd April 19965 - A further like grievance meeting conducted by the Operations Controller similarly concluded against the Applicant.17th June 1996 - The Applicant presents an 1TI claiming unfair dismissal:
"I believe that I have been effectively dismissed and re-engaged."

Cross Appeal

It is logical and convenient for us to consider first the Respondents' cross-appeal. The findings upon which such is based are set out in paragraphs 13 ,14 and 15 of the Extended Reasons:"13. We considered the submissions on behalf of the parties. The respondent was entitled to change the applicant's shift pattern as provided in Clause 8 of his contract of employment as a result of trading requirements provided that there was first consultation and then two weeks notice. Trading requirements meant that it was necessary to reduce the numbers on night shift. We do not accept that before coming to this decision the respondent was obliged to consult those on night shift or the union. This was a managerial decision but having reached it there had to be consultation with those who would be affected. We find that there was such consultation. Meetings were held on 8, 15 and 24 January and as a result of representations it was agreed to pay a three month or six month night shift allowance depending upon circumstances. It was explained that the process of selection would be "last in, first out" but no more detailed explanation was given. The applicant was entitled to believe that he would not be affected. The practice of the respondent was to deal with such method of selection by "department" which meant shift. On this occasion however those entirely on night shift were regarded as being one with those on alternative day and night shifts. This was not explained to the applicant or others on night shift and from the previous practice we do not consider he would have expected the selection to be carried out in this way. To that extent we find that there was a breach of contract on the part of the respondent. Had this been explained there might not have been general agreement and the applicant might well have made further representations. We do not accept the contention of the respondent that the applicant accepted the change from night shift to day shift. He strongly protested and made it clear he was only continuing to work under protest.14. Section 95(1)(c) of the Act provides that an employee is dismissed by his employer if, and only if, "the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct". We have found that there was a breach by the employer. The applicant's shift pattern could only be changed by prior consultation and although there was consultation the method of selection was not spelt out. Had there been further consultation it is possible that a method of selection relating only to those permanently on night shift might have been employed. His change of shift pattern affected the applicant's pay (but subject to the six month protection of his previous pay) and his convenience. We therefore find that had he terminated the contract he would have been entitled to terminate it by reason of the employer's conduct. He did not however terminate the contract. He is still working for the respondent.15. We do not regard the breach of contract on the part of the respondent as approaching in any manner the breaches in Hogg or in Alcan . The changes in both these cases were very substantial indeed. We do not regard the departure from the applicant's contract in the present case as being so substantial as to amount to the withdrawal of the whole contract. ....."The essential starting point for the submissions of Mr Sheldon on behalf of the Respondents is the résumé of relevant contract law enunciated by Lord Denning M.R. in Western Excavating (E.C.C.) Ltd v Sharp (1978) 1CR 221 at 226:
"If the employer is guilty of conduct which is a significant breach going by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer's conduct. He is constructively dismissed. The employee is entitled in those circumstances to leave at the instant without giving notice at all or, alternatively, he may give notice and say he is leaving at the end of the notice. But the conduct must in either case be sufficiently serious to entitle him to leave at once. Moreover, he must make up his mind soon after the conduct of which he complains: for, if he continues for a length of time without leaving, he will lose his right to treat himself as discharged. He will be regarded as having elected to affirm the contract."
Submits Mr Sheldon, the contract of employment expressly allowed for a change in shift patterns as a result of trading requirements subject to prior consultation and two weeks notice. He submits that the Industrial Tribunal expressly found that the change resulted from trading requirements; that there was consultation; and that there was two weeks notice. He thus challenges the finding that there was a breach. In the alternative, if there was a breach it involved the relatively late introduction into the consultation process of the proposition of management as to the application of the 'last in, first out' approach. That, he submits, cannot be a "significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract." The whole chronology shows employers who are keen to maintain the contract subject to the shift change - and who are prepared to soften the financial impact. On behalf of the Applicant, Mr Choudhury points to the contractual entitlement to consultation and submits that the Industrial Tribunal could lawfully find that there was a material failure to consult: the late introduction of the 'last in, first out' issue precluded meaningful consultation. As to the weight of the breach, he points to the financial impact on the Applicant of the change in shift pattern to which consultation was a condition precedent.In the judgment of this Tribunal, whether or no there was any breach of contract on the part of the Respondents (and the evidence for such is tenuous), there certainly was no breach as defined by Lord Denning M.R., that is, there was none such that could entitle the Applicant to terminate the contract. In making the finding that there was such, the Industrial Tribunal must have failed correctly to direct itself as to the law, and in particular as to the nature of a breach that could raise an entitlement to terminate. For mere impairment of the consultation process to be significant and going to the root of the employment, there would have to be some remarkable material facts - and there are not. The Industrial Tribunal failed to heed the unjustifiable contrast between its finding that the breach was not "so substantial as to amount to the withdrawal of the whole contract" with an effective earlier finding that it was so substantial.In the result the cross-appeal has to be allowed. Further, given as a result, no breach justifying termination, the issues raised by the appeal do not arise and the application with respect to unfair dismissal must itself be dismissed.

The Appeal

Out of courtesy to the well presented submissions of Mr Choudhury, we do turn to consider such, preceding on the basis that there was a breach of the contract of employment such as falls within the definition extrapolated by Lord Denning M.R.. Given that premise, the Industrial Tribunal directed itself:
"Section 95(1)(c) of the Employment Rights Act 1996 provides that an employee is dismissed by his employer if and only if 'the employee terminates the contract under which he is employed.' The Applicant did not terminate the employment. We find that there was no constructive dismissal."
Mr Choudhury submits strongly that a complaint of constructive dismissal is not dependant upon the employee accepting the employers' breach as a repudiation and leaving the employment forthwith or with notice. Depending upon the circumstances he is entitled to regard himself as constructively dismissed from his original employment and re-engaged pursuant to a fresh different contract. In such circumstances his continued attendance at work does not preclude a claim of constructive dismissal by reference to the original contract. Turning to the instant situation, his client's consistently evinced hostility to the post-18th February 1996 terms taken in conjunction with the drastic subsequent change in his shift pattern and the consequent impact on his income justified a finding (which was lawfully open to the Industrial Tribunal) that he had accepted termination of the original contract and his continued presence at work reflected immediate re-engagement on the post-18th February terms, that is, pursuant to a fresh contract. In support of this submission he drew attention to the following:1. The terms of Section 95(1)(c): it is for the employee to terminate "the contract under which he is employed" and not the employment.2. The decisions of this Tribunal in Hogg v Dover College (1990) ICR 39 and Alcan Extrusions v Yates (1996) 1RLR 327. Presently we need do no more than cite that part of the headnote in Hogg which encapsulates Mr Choudhury's construction of events and their legal implications: "Held, allowing the appeal ..... the fundamental changes in the terms of employment were such that the applicant had been constructively dismissed and that he could not be said to have affirmed by his subsequent conduct what was a totally different contract of employment .....".3. The decision of the House of Lords in Rigby v Ferodo Ltd (1988) 1CR 29 with particular reference to the speech of Lord Oliver at 35:
"It has been submitted that there was some sort of implied acceptance on the part of Mr Rigby of the appellant's repudiation by working on. At the trial this was put on the basis of estoppel, waiver and acquiescence. All three were rejected by the trial judge and, in my judgment, he was, on the facts which he found, quite plainly right to reject them. I can, for my part, see no other basis upon which it can be argued that the continued working by Mr Rigby and his acceptance for the time being and under protest of the wage that the appellant, with full knowledge of his lack of agreement, chose to pay him is to be construed as an acceptance by him either of the repudiation by the appellant of the original continuing contract or of the new terms which the appellant was seeking to impose."
In response, Mr Sheldon did not seek to sustain the proposition that simply by staying at work the Applicant had precluded a complaint for unfair constructive dismissal. What he did submit was that whether the Applicant left or stayed he had to give a timely indication that he accepted the employers' repudiation of his original contract. So much was apparent from the passage cited from Western Excavating (E.C.C.) Ltd v Sharp and it is endorsed by various further references. Thus, in Howard v Pickford Truck Co. Ltd (1951) 1 KB 417 at 421 the point was memorably expressed by Asquith L.J.:
"An unaccepted repudiation is a thing writ in water and of no value to anybody."
Again, this Tribunal in Bashir v Brillo Manufacturing Co (1979) 1RLR 295 at 29 dealing with a similar issue said "It seems to us that here if Mr Bashir had gone back and had worked for a period without evincing his acceptance of the repudiation, then clearly it would have been too late for him to bring a claim for constructive dismissal." Turning to Hogg's case the successful Applicant had at an early stage intimated by way of a solicitors' letter that whilst he would work by reference to the drastically revised terms of employment, he regarded himself as unfairly dismissed from his original employment. Averting to the instant situation, Mr Sheldon submits that it was not until the 1TI of the 17th June that the Applicant first intimated an acceptance of the alleged repudiation. Given that he had been working by reference to the revised terms since the 18th February it was too late to take this line: he had affirmed by his conduct a variation of his original contract.For our part, we readily accept Mr Choudhury's submission that the Industrial Tribunal's rejection of the Applicant's claim simply on the basis that he had not terminated the contract and that he had continued to work for the Respondents reflects a misunderstanding of the law. However we similarly accept Mr Sheldon's submission that had it posed for itself the appropriate question, then it would have been bound to come to the same conclusion. Thus, had it ruled on the question as to whether there had been a timely acceptance of the repudiation so as to terminate the contract and satisfy Section 95(1)(c), it could not have failed to find that there was no clear acceptance prior to the 1TI of the 17th June - and then it was too late. Thus, were we concerned with the appeal it would have been dismissed.

In Conclusion

As a Tribunal we would wish to draw attention not just to the legal importance of an early intimation that the employee regards himself as constructively dismissed from one employment and as thereafter engaged by reference to a fresh employment, but also to the practical importance. It is plainly in everyone's interests that the status of an employee should be contemporaneously apparent to all immediately concerned. Reconstruction in hindsight is tempting but unless checked by proper heed for the principles of law merely serves to create confusion.