MR S PERRY v ALLIED DUNBAR ASSURANCE PLC [2002] UKEAT 1446_01_1106

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2002] UKEAT 1446_01_1106

Case No Appeal No. EAT/1446/01

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

MR S PERRYAPPELLANT

ALLIED DUNBAR ASSURANCE PLCRESPONDENT

Before

Mr Justice Maurice Kay Mr D J Jenkins

Date 11 June 2002

[1]APPEARANCES For the Appellant MR EDWARD HUTCHIN (of Counsel) Messrs Irwin Mitchell Solicitors St Peter's House Hartshead Sheffield S1 2EL THE HONOURABLE MR JUSTICE MAURICE KAY This is a Preliminary Hearing of an appeal by Mr Perry against a decision of an Employment Tribunal sitting at Sheffield. The decision of the Employment Tribunal was that the employer:

"… did not fundamentally breach the applicant's contract of employment and therefore the applicant's complaint of constructive dismissal fails and is dismissed."

[3]The factual background is set out in the Extended Reasons. The Appellant was employed by Abbey Life at their Chesterfield office from February 1993. By February 1999 he had reached the position of Branch Manager. On 31 January 2000 he was informed that the Abbey Life sales force nationally had been acquired by Allied Dunbar, the Respondent. That involved a transfer pursuant to the Transfer of Undertakings (Protection of Employment) Regulations 1981 . There was some consideration concerning duplication of offices and staff and there was an indication that there would be some redundancies. The findings of fact record that there was uncertainty as to whether the Chesterfield office would close. Decisions about this were given and reversed for reasons related to lease arrangements and redundancy arrangements. In fact most of the staff at Chesterfield were self employed sales advisors. Many of them left to take up other employment, partly as a result of the uncertainties.

[4]Between March 2000 and November 2000 there was correspondence, and meetings took place between the Appellant and senior management about the position of Chesterfield and about his own position. It was during that period too that there were changes of mind on the part of the employer about the future of Chesterfield. On 2 March 2000 the Appellant received confirmation of his own position and a statement to the effect that his salary for the next year would be 'underpinned' to ensure that he earned no less than in the previous year with Abbey Life.

[5]Clearly, the Appellant was not satisfied with the way in which the transfer was being implemented and on 29 September 2000 he sent a memo to Mr Eric Armstrong criticising the approach of the Respondent, specifically in relation to Chesterfield. That was in the nature of the notification of a grievance. He received no initial reply to that. On 15 October he applied to join an independent financial advisor's network which would have been a pre-condition for his carrying out self-employed work as an independent financial advisor. Although the Respondent became aware of that it never formed part of discussions between the parties. On 18 October the Appellant had a meeting with Mr Dickinson, the Regional Director. This was not a meeting designed to process his grievance but was one at which his remuneration was discussed and an explanation was given as to the various managerial roles that would be open to the Appellant within the Respondent s' organisation.

[6]On 10 November 2000 the Appellant wrote to Mr Freeman, the Area Sales Director, and complained that he had not received a response to the grievance he had notified on 29 September. Amongst other things, he stated that he believed that his current position had become redundant and he sought to be offered a redundancy package of a kind that had been offered to others. On 20 November there was an informal meeting between the Appellant and Mr Freeman when the matters raised in the Appellant's letter were confirmed by him to be in the nature of a grievance. He explained that he was expected to receive a redundancy payment and then a new contract of employment. On 30 November he learned that the decision to close the Chesterfield office, which had originally been taken in principle in April, now meant that the branch would close on 15 December 2000.

[7]On 14 December 2000 a grievance meeting was held in London before Mr Freeman and Mr Macari of the Respondent s' Human Resources Department. That meeting was extensively documented and tape recorded. The Employment Tribunal had the benefit of both seeing the record and hearing the tape recording. The Tribunal noted in its findings of fact that during the meeting the Appellant was asked by Mr Freeman whether, in relation to the departure of sales advisors from the Chesterfield office, he, the Appellant, took any personal responsibility. Mr Freeman also acknowledged that the closure of the Chesterfield office had not been handled as well as it could have been and, taking into account this and some difficulties in relation to re-training the Appellant, Mr Freeman indicated that the offer to underpin earnings would, in his case alone, be extended for a further year. Mr Freeman also said that he would consider the Appellant's remaining grievances and respond in writing. However, the next day, 15 December, the Appellant tended his resignation by a letter stating that: " … the last straw" was Mr Freeman's: "accusation" on the previous day that he had mismanaged his branch. It seems that Mr Freeman did not immediately come to know of that letter of resignation and on 23 December Mr Freeman wrote to the Appellant in response to the grievance as he had promised that he would.

[8]Against that factual background was the case for the Appellant before the Employment Tribunal that the history of the events following the TUPE transfer, culminating in the meeting of 14 December, involved a breach of the implied term of trust and confidence which, self evidently, was present in the Appellant's contract of employment. In other words, he was claiming that the employer had repudiated the contract in accordance with the principles expounded in Western Excavating (EEC) Ltd v Sharp

[1978] ICR 221

and as a result of that he had been constructively dismissed. As we have indicated the Employment Tribunal did not accept that submission. In paragraph 7 of the Extended Reasons it expressed itself as follows:

"The general view which the Tribunal would express is that there are bound to be difficulties when one organisation takes over the sales force of another organisation. It seems to us that this respondent, at least in relation to the applicant and the Office at Chesterfield, did not do the best job that it could have done in smoothing out the difficulties which were bound to have occurred. There could perhaps be particular criticism attaching [to] Mr Armstrong and Mr Harrington who seemed to have made what was going to be an awkward process, a much more difficult one for the applicant. The respondent concedes that there has been shoddy treatment of the applicant. It is however for the Tribunal to assess the matter on the basis of whether or not it considers that there has been a fundamental breach and whether, in this context, the implied duty of trust and confidence has been breached. We conclude not. There were matters which the applicant, quite properly, brought before the respondent as grievances. We do not consider that those can properly be elevated into fundamental breaches of the contract of employment. Accordingly, on that basis, it is the unanimous decision of the Tribunal that the applicant's complaint fails and is hereby dismissed."

[9]Before us, Mr Hutchin has made, essentially, two submissions. The first is that the Employment Tribunal misdirected itself in law by failing to adopt the correct legal test for constructive dismissal by reason of a breach of the implied trust and confidence. Alternatively, the second submission is that the Tribunal misapplied the law by failing properly to consider whether the Respondent's conduct amounted to a breach of the implied term of trust and confidence. In the course of his submissions Mr Hutchin referred to the recent decision of this Tribunal in Morrow v Safeway Stores Plc [ 2002] IRLR 9 . We set out at greater length part of paragraph 25, to which Mr Hutchin referred, it is in these terms:

"We take the view that, in considering the application of the implied term, the tribunal led themselves into error by seeking to separate the actual words spoken, which they thought were not in themselves unreasonable, given the history, from the circumstances in which the reprimand took place…. In so doing they appear to have directed themselves that they could therefore find a breach of the implied term of trust and confidence, which was nevertheless in all the circumstances not sufficiently serious to amount to a repudiatory breach entitling the appellant to resign. We regard that as a misdirection and we so find in relation to the first issue in this appeal. In general terms, a finding that there has been conduct which amounts to a breach of the implied term of trust and confidence will mean, inevitably, that there has been a fundamental or repudiatory breach going necessarily to the root of the contract…"

[10]We have those principles well in mind when considering the way in which the Employment Tribunal in the present case approached its task. It seems to us that the Employment Tribunal realised full well that it was dealing with an issue about the implied duty of trust and confidence. It refers specifically to that in paragraph 7 of the Extended Reasons. The Employment Tribunal also had well in mind the principle in Western Excavating Ltd v Sharpe which it accurately set out in paragraph 5 of the decision. Mr Hutchin's complaint really comes to this, that having found managerial deficiencies in the treatment of the closure of Chesterfield and of the Appellant, the Employment Tribunal erred by not specifically asking itself whether those deficiencies and the history culminating in the matter to which we have referred on 14 December involved a breach or breaches of the implied duty of trust and confidence. His complaint is that the Employment Tribunal focused on the language of fundamental breach rather than whether there had been a breach of the implied term of trust and confidence. If there had been a breach of the implied term of trust and confidence then, he submits, in the light of Morrow , that would have been a breach so fundamental or repudiatory as to give rise to a finding of constructive dismissal.

[11]In our judgment Mr Hutchin's submissions, though well argued, adopt an over semantic approach to the decision of the Employment Tribunal. It is apparent to us that the Employment Tribunal was satisfied that the managerial deficiencies and the history to which we have referred did not involve any breach of the implied duty of trust and confidence. It does not follow that because there is a history of managerial deficiency there is a breach of that implied duty of trust and confidence. Nor does it follow that such a breach must have occurred because of the finding of: "shoddy treatment" We are entirely satisfied that the Employment Tribunal concluded that this was a case in which managerial deficiencies did not involve a breach of the implied term of trust and confidence.

[12]Accordingly, we do not consider that it is arguable that either of Mr Hutchin's grounds of appeal or heads of submission contain within them anything that would be likely to result in this appeal succeeding if it were to go to a final hearing. In our judgment the Employment Tribunal did not commit any error of law. Nor is it arguable that they did. In those circumstances we shall not permit the matter to go forward. The appeal is dismissed.