KINGSTON UPON HULL CITY COUNCIL v MR C DUNNACHIE [2003] UKEAT 0706_02_2306

EMPLOYMENT APPEAL TRIBUNAL
Bailii case number: [2003] UKEAT 0706_02_2306Case No Appeal No. EAT/0706/02Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
KINGSTON UPON HULL CITY COUNCILAPPELLANTMR C DUNNACHIERESPONDENT
Before
Mr Justice BurtonDate 23 June 2003
[1]APPEARANCES For the Appellant MR J BOWERS QC (of Counsel) Instructed By: Kingston Upon Hull City Council Legal Services Chief Executive's Department The Guildhall Alfred Gelder Street Kingston upon Hull HU1 2AA For the Respondent MR A WHITE QC (of Counsel) Instructed By: UNISON Employment Rights Unit 1 Mabledon Place London WC1H 9AU MR JUSTICE BURTON (PRESIDENT) : This is the appeal brought by Kingston Upon Hull City Council, whom we will call either the Respondent or Hull City Council, against the decision of the Employment Tribunal at Hull that the Applicant, Mr Christopher Dunnachie, was constructively dismissed and unfairly so.[2]It is a case which has already made the names of Dunnachie and Hull City Council famous, by virtue of being the leading case of a number in which this Tribunal, differently constituted, has made a decision that claims for compensation for non-economic loss are not recoverable in the Employment Tribunal. This can be therefore ascribed the description of "No.2".[3]As a result of the extreme co-operation there has been between Solicitors and Counsel on both sides that issue was enabled to be decided first, and as part of a clutch of other matters, notwithstanding the existence of this outstanding appeal, which has now come forward, on liability.[4]The issues have been within a short compass, because the Respondent has not sought to appeal the findings that there were breaches of the implied term of mutual trust and confidence which, as a result of the jurisprudence in that regard, amounts to a fundamental breach of contract, capable of being accepted as repudiatory by the Applicant.[5]The issues before us have revolved around the questions of affirmation, waiver and causation, the circumstances being that the most significant of the breaches on the Tribunal's findings were those which led up to an incident in early November, when the Applicant broke down at a meeting with the Respondent and, thereafter, there followed a period of two to three weeks when he was absent from work owing to stress.[6]The Applicant applied for a job outside the Council, in the event, in Doncaster, some way away, and obtained that job, or a job offer, on 2 February 2001 after an interview the day before, and he notified the Respondent on 6 February that he had been offered a job by Doncaster Metropolitan Borough Council. The offer was confirmed on 5 March, and he was made a formal offer on 7 March, and he resigned from his employment on 8 March, giving notice, such that he did not, in fact, have any break between leaving and starting the job in Doncaster on 10 April. He suffered little in the way of economic loss, although the new job was, it seems, less well paid but, as we have indicated, he made a claim in respect of compensation for non-economic loss, injury to feelings and humiliation etc., in regard to which this Tribunal have already found, as we have indicated, on appeal, that there was no jurisdiction to award any such sum.[7]The issues before us have revolved around the apparent passage of time between early November 2000 and his departure in March/April 2001. Mr Bowers' first limb of arguments have revolved around waiver, by virtue of delay in accepting repudiation. The second tranche of arguments has revolved around a case that there was not simply waiver, by virtue of the passage of time, but affirmation of the contract as a result of positive conduct by the Applicant. The third and most powerful of his arguments related to his case that the fundamental breach found by the Tribunal against the Respondent must be the effective cause of the termination of the contract, and he submits that in this case the effective cause was his seeking and, in due course, accepting the offer of employment from Doncaster.[8]We shall deal first with the first and second arguments together. So far as the factual position is concerned, the passage of time is dealt with by the Tribunal, in paragraphs 33 to 44 of its Decision. Those paragraphs relate to what occurred after the period of two to three weeks during which the Applicant was absent from work owing to stress.[9]In paragraph 34, the Tribunal recites that the Applicant returned to work on 27 November, when he had a meeting with Mr Duxbury, one of his superiors, and his union representative. Many issues were apparently discussed at that meeting.[10]In paragraph 36, there is a reference to there being a meeting with Mrs Cottis, another of his superiors, on 1 December, when the Applicant told her of his feeling that the memorandum of 7 November, which had triggered his breakdown to which we have earlier referred, had been sent by Mr Kitching, of whom he particularly complained, in order to discredit him. He complained to Mrs Cottis that his health was suffering, and asked that his complaints be investigated properly. Her response was to say that she had been instructed only to sort out his files, complaints about the mismanagement or maladministration of which underlay the earlier memorandum of 7 November. The Applicant and Mrs Cottis met again on 4 December, when the Applicant invited Mrs Cottis to say in writing whether she thought that his work generally was of a good standard, and she responded by saying that she did not have the time, or sufficient working knowledge to do that, and would instead ask Mr Kitching to check the files.[11]In paragraph 37, it is set out that Mr Kitching was appointed Acting Food Manager. This is a job for which, as is there recited, the Applicant had himself unsuccessfully applied. The appointment of Mr Kitching was therefore a double blow. He himself did not obtain the job. The man whom he will have regarded as his bugbear, to say the least, was appointed instead. It was by that time, on the findings by the Tribunal, in paragraph 37, that he decided that in case things did not improve over the following weeks, he would apply for a job at Doncaster Metropolitan Borough Council and he did so on 30 December.[12]Paragraph 38 recites the fact that Mr Kitching, in his new promoted position, set about reorganising teams and moved the Applicant back to the retail team, as its leader, and put somebody else in charge of the commercial team, where the Applicant would have preferred to have been, without consulting the Applicant, other than by leaving him a handwritten note. The Applicant then had a further meeting with Mrs Cottis, and Mrs Cottis made some kind of promise to look into matters, but told him that the decision to move him to the retail team had been made. It is recorded, at paragraph 38, that at the end of the meeting the Applicant accepted the change, in the hope that it would diminish the conflict with Mr Kitching.[13]Paragraph 39 records that matters did not improve, and on 17 January Mr Kitching complained to one of the Applicant's colleagues about the fact that she had accompanied the Applicant on a visit and, in paragraph 40, it is recited that the Applicant met the Respondent's Occupational Health Nurse, at which he explained that he was having difficulties with Mr Kitching, but that he was unwilling to make a formal complaint under the harassment procedure, as to do so would kiss his career goodbye.[14]Paragraph 41 recites that the Applicant had another meeting with Mr Duxbury on 24 January, at which he complained that he was still being undermined and bypassed by Mr Kitching. Mr Duxbury, it appears, pointed out at that meeting that the Applicant could find himself being disciplined. The Applicant felt threatened by that comment and was deterred from launching a formal complaint.[15]Then, in paragraph 42, the following is set out by the Tribunal:
"42 Thereafter, Mr Kitching continued to undermine and criticise the applicant. On 1 February, he attended a job interview with Doncaster Council. The following day he was offered the job. He asked for time to consider, because he still wished to remain in the employment of the respondent. He decided to ask Mr Kitching for an apology. When he did so, Mr Kitching refused to acknowledge that there had been a problem. The applicant suggested using the Occupational Health Counsellor as a mediator. Mr Kitching refused to have anything to do with that."
[16]Paragraph 43 records that matters between the Applicant and Mr Kitching still did not improve and, on 6 February, he told Mrs Cottis that he had been offered the Doncaster job.[17]In our judgment there is no sign there of waiver of the fundamental breach, by virtue of acceptance of it, or of the passage of time. Mr Bowers points out that there is little mention by the Tribunal of what had also occurred during that same period, namely his application for the job of Acting Food Manager, to which instead Mr Kitching had been appointed, and it is plain that, in somewhat tentative terms, reliance had been placed by the Respondent on this application by the Applicant for internal promotion, as arguably affirming the contract.[18]It is right that, in terms, the Tribunal does not say that that job application was not an affirmation of the contract, but they set it out instead in the course of the findings of fact which indicate the continuing breach, to which we have referred.[19]Mr Bowers' primary attack, in this regard, is on paragraph 50 of the Decision of the Tribunal, which we now set out. The paragraph starts from a consideration in paragraphs 48 and 49 of the cases on constructive dismissal. It is not in any doubt that the Tribunal correctly directed itself in relation to the law on constructive dismissal. Mr Bowers has drawn our attention to an unreported decision of this Tribunal called O'Grady v FP Financial Management Route Services Ltd , a decision of His Honour Judge Peter Clark with a panel, on 27 October 1995. As is so often with Judge Peter Clark's decisions, he took the opportunity to remind tribunals, and himself, of what is sometimes called the four-fold test in constructive dismissal. "1 There must be a breach of contract by the employer. This may be either an actual breach or an anticipatory breach. 2 That breach must be sufficiently important to justify the employee resigning, or else it must be the last in a series of incidents which justify his leaving. Possibly a genuine, albeit erroneous, interpretation of the contract by the employer will not be capable of constituting a repudiation in law. 3 He must leave in response to the breach and not for some other, unconnected reason. 4 He must not delay too long in terminating the contract in response to the employer's breach, otherwise he may be deemed to have waived the breach and agreed to vary the contract."[20]This is, of course, based upon a number of cases, but primarily the seminal decision of Western Excavating (ECC) v Sharp [1978] ICR 221 . After reciting, towards the end of paragraph 49 of its Decision, another of the important decisions in this regard, Woods v WM Car Services (Peterborough) Ltd [1981] ICR 666, and referring to the function of the Employment Tribunal as being to look at the employer's conduct as a whole, and determine whether it was such that its effect, judged reasonably and sensibly, was such that the employee could not be expected to put up with it, the Tribunal continued as follows. "50 In that connection, we found that Mr Kitching did, for whatever reason, have a low opinion of the applicant's capabilities. That opinion was misplaced. Nevertheless, he acted upon it seeking to undermine the applicant whenever the opportunity presented itself. A particularly bad example was his irrational refusal to allow the prosecution of Skelton's Bakery to proceed." That, as Mr Bowers points out, is an event which must have taken place by, at the latest, 20 November 2000 when the decision to proceed, in fact, went forward. "When the applicant challenged that decision by going to their manager, Mrs Cottis, we are satisfied that Mr Kitching retaliated by conducting an in-depth investigation into the management of the applicant's files, without telling him that he was doing so." That must, Mr Bowers submits, have occurred by 2 November. "He then threatened the applicant [6 November] with disciplinary proceedings and left the matter hanging in the air [memo of 7 November]. Mr Kitching's conduct was compounded by that of Mrs Cottis, who failed to alleviate the applicant's anxieties about the prospect of being suspended [4 December]. Both she and Mr Duxbury either failed or refused to recognise that the applicant had been the victim of bullying by Mr Kitching [4 December]. Mr Duxbury deliberately sought to deflect the applicant from making a formal complaint under the respondent's personal harassment policy [27 November]. The respondent's treatment of the applicant by those officers caused his ill-health. [This appears to have been on-going from the evidence we have referred to, after 7 November, through to the end of January]. We are satisfied that there was the clearest evidence of a breach of implied term of mutual trust and confidence."[21]Mr Bowers accepts that there was evidence of conduct which could fall within the latter part of paragraph 50, as late as 24 January, by reference to the meeting of Mr Duxbury referred to in paragraph 41 of the Decision, which we have recounted.[22]Mr Bowers' submission, before taking us through paragraph 50 in that detail, was that it would be apparent, by the fact that paragraph 50 purported to be the summation of the case on fundamental breach, that there was no continuing breach and/or that there was an unexplained passage of time in which the Applicant failed to accept the repudiation. It is clear however, from the description which we have given of the content of that paragraph, that that is not sustainable. In any event, even if paragraph 50 had not succeeded in being a sufficient summation of the case, the earlier findings of fact, by the Tribunal, do not need to be repeated in order to give a sufficiently clear picture that the breach, of the implied term of trust and confidence complained of, did not, on the findings of fact by the Tribunal, come to an end on 7 November or, indeed, prior to the end of January, when the Applicant concluded that he had no alternative but to push forward with the job application that he had made with Doncaster, on the finding by the Tribunal.[23]There is no express finding, as we have indicated, in relation to the making, unsuccessfully by him, of his internal job application, but we conclude that it is quite obvious and, indeed, is the more clear from the very beginning of paragraph 51 of the Tribunal's Decision, to which we will turn in a moment, that the Tribunal concluded that his job application was part of his attempt to try and find a remedy to what he saw as an intolerable position, just as were his continuing attempts to persuade Mrs Cottis and/or Mr Duxbury to intervene, but his lack of success and what is more, the appointment instead of Mr Kitching to that very position, the further convinced him of the closure of that avenue of remedy. It may be that if he had been offered, and accepted, that position that he might be held to have affirmed the contract, by such acceptance, but it may equally be that the consequence of his promotion to that job would have, in fact, put a successful end to breaches that on the findings by the Tribunal sadly continued thereafter.[24]We are entirely satisfied that on the findings of the Tribunal there is nothing whatever in the argument that the Tribunal erred in its approach in law to the question of waiver, or affirmation, or failed to give consideration to those topics.[25]Paragraph 51 is the centre point of Mr Bowers' main submission relating to causation and we recite it. "51 We are equally satisfied that the applicant's resignation was caused by that conduct and that nothing he did can be properly categorised as affirmation of the breach. The applicant sought employment with another local authority only as a means of protecting his interests in the event that his attempts to get the Respondent to provide a remedy failed. The applicant only gave up at the beginning of February, when all the manifestations were that he was getting nowhere. He had to wait for a formal offer from Doncaster before resigning. The authorities recognise the peculiar nature of the employment relationship and the right of an employee who was the victim of a fundamental breach to protect his economic interests by securing alternative employment before leaving. The facts that the applicant is earning slightly less and having to travel considerably further in order to work for Doncaster Metropolitan Borough Council, having worked for the respondent for 15 years and being a native of Hull, speaks eloquently of the desperation he felt." Mr Bowers submits the following:(1) That the Tribunal have erred in its approach in law. They have not mentioned the relevant test which it is clear from the most helpful case in this area, namely Jones v F Sirl and Sons (Furnishers) Ltd [1997] IRLR 493 , is the best way of encapsulating the question to be addressed by a Tribunal.(2) He does not understand what the Tribunal meant by its reference to authorities recognising the peculiar nature of the employment relationship, or indeed the right of an employee, who is the victim of a fundamental breach, to protect his economic interests by securing alternative employment before leaving. He referred us rather to authority which is, of course, well established, which shows that the law in relation to contracts of employment is no different than in relation to any other contract, so far as the concepts of repudiation and acceptance of repudiation, waiver, affirmation and causation are concerned.(3) He points to evidence, which is not recited in the Tribunal's Decision, and upon which reliance was placed below, and upon which reliance was thus placed before us. It is a note of evidence taken by his Solicitor, in notes which, because of their otherwise accuracy and fullness, would appear to be likely to be correct, albeit that they have not been agreed by the Respondent; and following the new system, laid down under the Practice Direction, of attempting first to seek agreement and then to obtain notes of evidence in a more limited form from the Chairman of the Tribunal, has not resulted either in agreement by the Respondent or, in the event, by production by the Chairman of a relevant note. Nevertheless, we are prepared to accept that the note is accurate, primarily because it was picked up and recorded, at the time, in the closing submissions of the Respondent, and it appears to us to be unlikely that that would have remained recorded, but uncorrected, in written submissions made before the Tribunal, if it was not clearly understood by all parties when it was put forward that it was an accurate statement.[26]The statement in those written submissions put forward by Counsel then acting for the Respondent, dated 25 April 2002, was as follows:
"Mr Donnachie, in cross examination, stated that if he had not received the job offer from Doncaster Council he would have waited until another job opportunity came about. Therefore I would submit that the reason he resigned was because he had received the job offer from Doncaster Council."
The note by the Solicitor reads as follows:
"If job not offered would have stayed until another one."
[27]Mr Bowers relies upon this and further, in any event, puts forward the submission that the effective cause for the departure of the Applicant was, or at any rate should have been more fully considered by the Tribunal in the light of the authorities to have been, not the fundamental breach and its acceptance, but the availability of the alternative employment.[28]We do not agree. First, while accepting the accuracy of the note, it is plain that the note does not give Mr Bowers what he would have wished. It does not say that, had the job offer from Doncaster not come forward, the Applicant would have remained in employment. The caveat is that he would have remained until another job opportunity came about. On that analysis there is nothing whatever to challenge the Tribunal's conclusion that the Applicant's resignation was caused by the Respondent's conduct, and that he sought employment with another local authority only as a means of protecting his interests in the event that his attempts to get the Respondents to provide a remedy failed.[29]It is very different indeed from the findings of fact by the Tribunal at first instance in O'Grady , to which Mr Bowers referred, which founded the conclusion by Judge Peter Clark in that Tribunal that the Employment Tribunal's decision in favour of the Respondent should not be interfered with. That conclusion was that the Tribunal, at page 7 A, was "entitled to find that it was not a repudiatory breach which caused his resignation. The Appellant did not accept the repudiation and therefore there was no constructive dismissal". This was by virtue of evidence which at 2 A Judge Peter Clark cites from paragraph 5 of the Tribunal's Decision, as follows:
"5 ... Had Mr Aitkin not offered me a post I would have had to stay where I was. I would not have resigned from the respondent because I would have had nowhere else to go."
And at 2 G-H

Judge Peter Clark further cites paragraph 12 of the Employment Tribunal's Decision:

"We find that the resignation was prompted by the fact that the applicant had found, what for him was, better employment. This view is fortified in our minds by the fact that the applicant frankly acknowledged to us that, but for the offer of employment from Mr Aitkin, he would have continued in the employ of the respondent, and would not have resigned. ... The best available evidence is that of the applicant to the effect that he would have waived the breach and continued in the respondent's employ."
[30]That is not the evidence in this case. The Tribunal was, in our judgment, entitled to find, as it did, that the Applicant was looking for alternative employment, once he was satisfied that the existing fundamental breach could not be remedied.[31]Mr Bowers submits that the fact that the alternative employment in O'Grady was better was irrelevant, and that, consequently, the fact that the employment in this case with Doncaster was not as good is equally irrelevant. As a matter of law that would appear to us to be right, but equally as a matter of law such consideration must be part of the factual matrix of the decision for the Tribunal. In a situation in which someone is unhappy and is, perhaps, entitled to claim fundamental breach and then, fortuitously, has a job offer from a rival employer at double the salary, it may well be capable of argument and indeed it might well, in an appropriate case, be found, that the trigger for the departure was the splendid alternative offer, and that the continuing complaints, grumbles and unhappiness was a motive for departure, but not the effective cause for it, but that is not this case. The Tribunal in this case found that there were fundamental breaches, that he did make attempts to remedy them and once it became clear that he could not remedy them, he sought alternative employment which, in the event, was loss palatable than his existing job.[32]We understand Mr Bowers' puzzlement, at the reference to authorities recognising the peculiar nature of the employment relationship in paragraph 51, but we are satisfied that that is a reference, perhaps not a very clear one, to Jones v F Sirl & Son , to which we have referred. That was a case in which the Employment Appeal Tribunal, distinguishing the case of O'Grady , as is clear from paragraph 11 of its judgment, found on the facts of that case, overturning the decision of the Employment Tribunal, that the employee had in that case left, both because of the fundamental and repudiatory breaches, and also because of the fact that she had found another job, and that the Employment Tribunal, having to find out what the effective cause of the resignation was, had found, and was entitled to have found, that the employee's departure, prompted as it was by the offer of alternative employment, was nevertheless triggered by, and amounted to, an acceptance of, the repudiation by the employer.[33]Much depends on a question of fact, but it can be said that an employment situation is different from an ordinary contract, because conduct by a contracting party which might be read as waiver or acceptance of the position or affirmation of the contract, or at any rate read as not being accepting repudiation, namely continuing to have a relationship with the contracting party, may look very different in a commercial position from a situation in which an employee may need to safeguard his employment position before accepting the repudiation. Sometimes, of course, it will be the case that, by doing so, he will be held to affirm the contract or waived it, but where, as here the Tribunal specifically found that he only looked for an alternative employment, and found one which in fact was less congenial, by virtue of the employer's breach, there is in our judgment no ground whatever for concluding that there was any error in law.[34]In those circumstances, notwithstanding the full argument of Mr Bowers QC, we reject his appeal.