J V STRONG & CO LTD v MR M G HAMILL [2001] UKEAT 1179_99_1201

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2001] UKEAT 1179_99_1201Case No Appeal No EAT/1179/99Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
J V STRONG & CO LTDAPPELLANTMR M G HAMILLRESPONDENT
Before
His Honour Judge J Altman Mr W Morris Mr T C ThomasDate 12 January 2001
[1]APPEARANCES For the Appellant MR WILDBORE SMITH (of Counsel) Instructed by: Messrs Wood & Avary Solicitors 3 St Mary Street Chippenham Wiltshire SN15 3JL For the Respondent MR N SMITH (of Counsel) Instructed by: Messrs Charles Lucas & Marshall Solicitors 1 Wood Street Swindon Wiltshire SN1 4AN HIS HONOUR JUDGE J ALTMAN This is an appeal from a decision of the Employment Tribunal sitting at Southampton on 17 June 1999, when they found that the Respondent was constructively and unfairly dismissed. The Employment Tribunal, in a finding by a majority, found there was a series of actions by the employer which together amounted to a breach of the term of trust and confidence implied in the parties' contract which led to a termination by the Respondent of his contract of employment "in circumstances in which he was entitled to terminate it without notice by reason of (the Appellants') conduct." It is common ground that to succeed the Respondent had to establish before the Tribunal a breach of contract. The grounds of appeal contend, essentially,(i) that the facts found by the Employment Tribunal were not capable of giving rise to a finding that there was a fundamental breach of contract,(ii) that in any event the incidents up until the end of June 1998 were waived by the Respondent and(iii) that any incident thereafter should not have been regarded cumulatively with any earlier breaches because of that waiver and because of their being of a totally different nature.[2]The Respondent was a groundsman who began work for the Appellants' predecessors in April 1991 and became the direct employee of the Appellant by reason of a transfer of undertaking shortly before the events which the Tribunal had to consider. In reaching their determination the Tribunal believed his evidence, even though on occasions it was in marked conflict with that of the Appellants. The Tribunal found that in June 1997 oil was poured into his ear defenders and grease was put inside the jacket and trousers of his wetsuit, in July 1997 there was an argument with the foreman, Mr Andrew Martin, arising from the Respondent's cutting his head on an overhead light fitting in one of the Appellants' vans. In March 1998 dog faeces were put in his work bag. In April 1998 rancid milk was poured into his boots.[3]The Employment Tribunal had particularly to consider, however, the actions of the Appellants. They found that these matters were raised with the Managing Director on 23 April 1998. Whilst he told the Appellants of his disgust, the Tribunal felt that the Respondents considered that nothing was ever done. The finding of the Employment Tribunal was that a Mr Hibbs was deputed to investigate that matter but that he was met with general denials of any knowledge or any involvement from all those who were at the site. The Tribunal found that it was Mr Hibbs' view that the incident did not happen and that he "wrote off" the complaints because of "he had to". The inevitable inference from those findings is that at the end of the incidents themselves and of the handling by the Appellants of the complaint consequent thereupon, the position was reached that the Appellants disbelieved the Respondent about his allegations, had offered no support other than an opinion initially that they were disgusting, had taken no steps to reinforce or warn the workforce or to emphasise what would happen in the event of any repetition, and had taken no steps to secure that the Respondent was working in an environment where it would not happen again.[4]The Employment Tribunal found that very soon afterwards the Respondent voluntarily transferred to another site. Initially we believed that the opportunity to transfer was provided by the Appellants as a means of dealing with the problems that the Respondent had experienced at the Tidworth site where the earlier incidents occurred. However we were told that the evidence was to the contrary and that the opportunity to transfer was fortuitous and followed the Respondent's answering a request for volunteers in general. We have not heeded evidence which is not disclosed on the decision of the Chairman but it has led us to re-read that paragraph of the decision and it is clear that there is no relationship expressed in the decision between the transfer to another site and the incidents which had preceded that transfer.[5]From June 1998, when the transfer took place, until August 1998 the Tribunal found that there were no problems and "things went fine" at the new site. However in August 1998 the son of Andrew Martin, with whom the Appellants had earlier had an argument about the position of the light in the van, came to work at the new site. The evidence of the Respondent was that Jeremy Martin spread the rumour that the Respondent had been "pushed out of" Tidworth. It was also the Respondent's case that he noticed a change in general attitude on the new site with snide remarks, people turning away when he talked to them, but without his being able to give specific examples to the Tribunal.[6]The Employment Tribunal then made findings as to the final episode in February 1999. The Respondent was being supervised by a Mr Ford. He was due to put down wood chippings on a shrubbery at some barracks, apparently prior to an inspection, and would normally have completed the work by 9.30 am. He did not do so until about 10 am, due, on the evidence of the Respondent, to the late delivery of those chippings, a matter over which the Respondent had no control. When he reported at 10 o'clock to Mr Ford, having done the work, he was "told off" by Mr Ford for being late and told that he and his crew were "lazy bastards". We recognise that in the working environment of the parties that sort of terminology in itself may not carry with it any particular significance, but it is clear that there was a good deal of hostile interchange between the Respondent and Mr Ford. Mr Ford denied using those words, a denial the Tribunal rejected. The degree of hostility and upset is indicated by the Tribunal's finding that Mr Ford was not surprised that the Respondent complained to his foreman. However rather than looking for an apology from Mr Ford, the Tribunal found that Mr Allen told the Respondent that "he needed a bollocking so he got one". There had also been an issue as to whether or not Mr Ford was senior to the Respondent and this was confirmed at the same time. This incident was found by the Tribunal to be "the last straw" which led the Respondent to terminate his employment.[7]So far as the actions of the Appellants were concerned, therefore, the Tribunal had to consider the way in which they handled the incidents at Tidworth, that is in their approach to the other employees, their taking no action to pursue any possible investigation, or to issue a general warning or endorsement of their support for the Respondent, and so far as the Respondent was concerned, their disbelief of his allegations and their arranging to take no specific action so far as his working environment is concerned to ensure that the incidents were not repeated. We acknowledge, however, the point put before us by the representative of the Appellants that there was no repeat thereafter of this sort of physical assault, of which the Respondent had complained.[8]The Employment Tribunal then had to consider the period of about two months following transfer to the new site when "things went fine". Then they had to consider the period when, if they so found, the working atmosphere changed because of Mr Martin's comments and finally they had to consider the way in which the Appellants treated the Respondent's complaint in February, the two elements of which appear to be their failure to recognise that the late distribution of the wood chippings was the fault of late delivery and not that of the Respondent, and secondly their arguable lack of support for the Respondent and acceptance of his description of the way in which he had been addressed by Mr Ford. No doubt the view of the majority was that Mr Allen's response had been to add insult to injury.[9]The decision of the Tribunal was that there was an unfair constructive dismissal. They found as follows:
"The incidents prior to the move to Aldershot still bore heavily upon Mr Hamill. His confidence was shaken because, in his view, they had not been properly investigated. He thought he had escaped them and was very relieved at the move to the new working environment. Mr Hamill had not waived the earlier breaches, but thought he had found a solution to his problem. However, he was worried by Mr Jeremy Martin's comments and his perception of the effect of these comments on his colleagues."
They noted the agreement of the Respondent's representative that what had taken place on 24 and 25 February did not in itself justify a claim for constructive dismissal and they went on:- "However the resignation of Mr Hamill was the very last straw in a series of events and incidents and should be viewed cumulatively. On 25 February, Mr Hamill wanted an apology from Mr Ford and support from Mr Allen, but that was not forthcoming and that breach of trust and confidence justified his resignation. The sequence of incidents and events overall justified him treating the Respondent's conduct on 25 February as a fundamental breach of the implied terms of trust and confidence." It is said, in effect, that the finding of the Tribunal was perverse. It is said that the incidents themselves could not constitute a fundamental breach of contract, so as to justify a constructive dismissal. It is also said, as was expressed in the minority decision, that there was a waiver of the original breaches by the continuation at work and the move to the new place. The minority decision was that, in effect, it was unnecessary to determine whether there had been breaches of contract, or whether there was a breach of trust and confidence before the move of site, because the Respondent had "waived any argument for breach he might have had and transferred to work at the Aldershot site". Further it is said on behalf of the Appellants, as was suggested in the minority decision, that there was no repetition of the type of incidents after the move of site, and that as the 24 and 25 February incidents were not in themselves fundamental breaches of the term of trust and confidence, and as the incidents could not be viewed cumulatively because any earlier breaches had been waived, there was no claim to constructive dismissal.[10]So far as the seriousness of the incidents themselves are concerned, we are mindful that the Tribunal saw and heard the witnesses and gained a feel for the general atmosphere of the working relationship that was being described, and it seems to us there is material on their findings from which they were entitled to find that all these matters, if they were to be viewed cumulatively, gave rise to a fundamental breach of contract such as to constitute a breach of the implied term of trust and confidence which would give rise to a constructive dismissal. Whilst there were differences in the types of incidents, as was pointed out on behalf of the Respondent, there is a common thread so far as the relationship of the parties is concerned. That common thread is the failure of the employer to give the support that the employee was entitled to expect, to be believed when he is telling the truth, to have his complaints properly investigated, and after such investigation, to have such steps as possibly can be taken to secure that it does not happen again. To put our understanding of the majority decision in our own words, at the end of this sequence of events they found that the Respondent was left vulnerable in his own mind to anything that may come next, knowing that his management would not support him, or at least feeling that there was a risk that that would happen. We cannot find that these incidents were not sufficiently serious to enable the Tribunal to find that there was "a fundamental breach of the implied terms of trust and confidence".[11]Over the years the Courts have used many different phrases to describe the sort of conduct that is required to fulfil the legal tests in this sort of area. We were referred to the case of Brown -v- Merchant Ferries Ltd [1998] IRLR 682 where it was held, following Lord Steyn in Malik -v- BCCI [1997] IRLR 462 , that the test is:
"whether the employer's conduct so impacted on the employee that, viewed objectively, the employee could properly conclude that the employer was repudiating the contract. Although the correct approach to constructive dismissal is to ask whether the employer was in breach of contract and not did the employer act unreasonably, if the employer's conduct is seriously unreasonable that may provide sufficient evidence that there has been a breach of contract"
. That interesting decision of the Northern Ireland Court of Appeal provides one avenue for identifying a serious breach, namely whether the employer's conduct was "seriously unreasonable". Another is to consider whether there has been a breach of the term of trust and confidence. As observed during the course of argument it is difficult to think of examples of a breach of trust and confidence which would not be sufficiently serious as to entitle an employee to leave without notice in consequence. Although the following case was not referred in argument, it encapsulates what was spoken of and is worth recalling. In Courtaulds Northern Textiles Ltd -v- Andrew [1979] IRLR 84 Mr Justice Arnold first referred to the difficulty that had existed in the cases over the years in deciding the aspect of the contract to which 'fundamental' applies. He said:
"One has to consider whether the conduct complained of constitutes either a fundamental breach of the contract or a breach of a fundamental term of a contract …… but there is not much room, as we think, for that enquiry in a case in which the test, within the terms of the contractual obligation, is one which involves considering whether the consequences, or the likely consequences, are to destroy or seriously damage the relationship of confidence and trust between employer and employee; because it does seem to us that any conduct which is likely to destroy or seriously to damage that relationship must be something which goes to the root of the contract, which is really fundamental in its effect upon the contractual relationship"
. We find that the Tribunal were entitled to conclude that the incidents were cumulative and that they were sufficiently serious to amount to repudiatory conduct. We were also referred Wigan Borough Council -v- Davies [1979] IRLR 127. In that case Arnold J. said:
"We do not think that it is an outrageous or inconvenient conclusion that where a party has an obligation to take reasonable steps to achieve something, and is found to have taken no step at all, or no significant step at all, towards that end, the obligation of demonstrating that there was no reasonable step which could have taken should be found to lie upon that party. ….. Now if it was right that there was a failure to comply with a term of the contract,…. was that a fundamental breach of contract or breach of a fundamental term of the contract?"
No one suggested - indeed it would have been impossible to suggest that Miss Davies over-reacted in leaving the employment which had become intolerable to her in the way that have described; and it seems to us that it is a very simple thing to say that a failure in breach of contract to correct this state of things, or to attempt to correct this state of things, which was intolerable to the employee, must be a fundamental breach of that contract or a breach of its fundamental terms." In that case the Employment Appeal Tribunal held that the Industrial Tribunal had been entitled to conclude that the Appellant employers had been in breach of a contractual term to render reasonable support to the Respondent employee to ensure that she could carry out the duties of her job without disruption and harassment from her fellow workers, notwithstanding that there had been no evidence given by either side to the Industrial Tribunal as to what reasonable steps could have been taken to render support.[12]We turn to the question of waiver. The majority found that there was no waiver. The minority found that there was. It seems to us on the facts found that, as a matter of law, both those conclusions were justified. We can see no error of law in either. Were we to be particularly cautious, we would however suggest that in order to determine whether a waiver takes place it is necessary to identify the facts which amount to that waiver. Of course where the actual terms of someone's contract are changed, then the very fact that the person continues to work under that contract may be very potent evidence of waiver of any breach of the original terms. Indeed such continuation may, in fact, amount to an agreement to a variation. Where however there are a series of unpleasant incidents which an employer does nothing about, which is not necessarily this case, we find it difficult to understand how, simply by continuing to work, those breaches are regarded as waived in any permanent sense. Of course a waiver may take many forms and may, in some circumstances, be conditional upon there being no repetition of an earlier breach. Where nothing is said about it, and the Tribunal is left to infer or imply such a waiver then the facts upon which those inferences are based must be scrutinised. In this case the Respondent had taken advantage of an opportunity to move to another site, which does not seem to us to be a waiver, and the majority described it as being the Respondent's finding a solution to his problem. It is true that some time went by but, on the view of the majority, that was really only from June to August. We can find no error of law in the decision of the majority that there was no waiver of the earlier breaches.[13]We have been concerned to consider what is the relationship between the principle that there can be a series of incidents, none of which in themselves constitute serious breaches, but which combined together amount to a breach of the implied term of trust and confidence such as to amount to constructive dismissal on the one hand and the principle of waiver, on the other. The very fact of there being a series implies that an employee is carrying on in his work notwithstanding the occurrence of these events. This, of course, is normally an example of waiver. Also it very often happens that the final incident is in itself insubstantial, no more than a piece of straw, but sufficient to provide the continuity in the series to qualify the whole series of incidents as a breach.[14]It seems to us that a Tribunal confronted with this sort of situation must look and see if the final incident is sufficient of a trigger to revive the earlier ones. This will, it seems to us, involve looking at the quality of the incidents themselves, the length of time both overall and between the incidents, and it will also involve looking at any balancing factors which may have, at any point, been taken to constitute a waiver of earlier breaches.[15]Finally, when considering the issue of waiver, the very nature of the waiver will need to be considered. It is not only a question of seeing whether the facts give rise to either an express or implied waiver, but considering the terms of the waiver itself. Is it a once and for all waiver, or do the circumstances give rise to the implication of a conditional waiver, for instance a waiver subject to the condition that there would be no repeat of similar conduct or, as in this case, that the Appellants would not continue the lack of support. Finally, of course, any finding of waiver has to be identified and based on clear facts or inferences from established facts.[16]The Employment Tribunal was faced with the need to examine carefully evidence from Witnesses, to assess them and to gain an impression not only as to what happened but also as to the general atmosphere and underlying significance of those events. Such judgments, in cases like this, are always difficult and it is not surprising, therefore, that in assessing the evidence the Tribunal was not unanimous. However we have discerned no arguable error of law in the reasons of the Tribunal and accordingly the appeal falls to be dismissed at this stage.