MR S HASSAN v INTRA-TECH HEALTHCARE LTD [2004] UKEAT 0050_04_3003

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2004] UKEAT 0050_04_3003

Case No Appeal No. UKEAT/0050/04

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

MR S HASSANAPPELLANT

INTRA-TECH HEALTHCARE LTDRESPONDENT

Before

Mr Justice Burton

Date 30 March 2004

[1]APPEARANCES For the Appellant MS A REINDORF (of Counsel) Instructed by: Russell Jones & Walker Solicitors Swinton House 324 Gray's Inn Road London WC1X 8DH For the Respondent MR D PRESTON (of Counsel) Instructed by: Messrs Brooke North Solicitors Great George Street Leeds LS1 3BR SUMMARY Employment Tribunal found repudiatory breach by Respondent in relation to manner of introducing new post of QC Manager, but concluded that this was not the effective cause of the Appellant's resignation, which was that he was not appointed as such manager, which Employment Tribunal found was not a breach nor a disappointment of a legitimate expectation. Careful analysis by Employment Tribunal and (insofar as alleged) no perversity. Appeal dismissed at PH. – THE HONOURABLE MR JUSTICE BURTON (PRESIDENT) This has been an appeal by Mr Hassan against the unanimous Decision of the Employment Tribunal at London Central, dismissing his application against his former employers, Intra-Tech Healthcare Ltd, the Respondent, that he was unfairly constructively dismissed by that company. He was employed as a Scientific Officer by the Respondent from 1999 to the date of his resignation on 24 April 2003.

[2]The circumstances which led to his resignation are summarised in the admirably concise set of findings of fact by the Tribunal, in paragraph 3 of its Decision. The nub of it was that, during the course of a meeting on 12 March 2003, the Appellant indicated that he felt that the workload in the QC department had increased, and that there insufficient resources to cope with it in terms of staffing levels, and that at the end of the meeting, Ms Hamling, on the part of the Respondent, brought the meeting to a close, and informed the Appellant that she intended to have someone else manage QC instead of herself (she then being the manager), since she realised that she was unable to supervise and manage the Appellant and his work on a daily basis. What in fact had been going on, it seems, is that there had been something of a restructure, according to the Tribunal in paragraph 3(vii) of its Decision, of the upper echelons of the company, with certain promotions of various managers, and the result was that on 13 March, the day after the meeting with the Appellant, there was approval by the new Board of the appointment of a QC Manager, a decision taken by Ms Hamling on the day before, i.e. the day of the meeting with the Appellant.

[3]The job specification of the new QC Manager was, as found by the Tribunal in paragraph 3(vii), that the postholder must have inter alia(a) recent experience of supervising and managing staff, and

(b) MT04 equivalent, which is a certain grading, , which the Appellant did not have. It was also said that previous experience of QC was preferred. In other words the Tribunal found that the job was not the same job as the Appellant was currently undertaking; the job included a much more strategic role than the full time job of Scientific Officer, which the Appellant held, and was not at risk and would continue as before.

[4]The Tribunal interposed in paragraph 3(vii), relevantly to its eventual conclusion, a note as to the Appellant's own view of what had occurred. He told the Tribunal, and the Tribunal said it was quite clear from the correspondence that the Tribunal had seen throughout the bundle, that he felt he should have been the QC manager, and indeed promoted to QC director, when the other promotions were made. There was in the event, as found by paragraph 3(viii), only one applicant for the role, and that was an MTO4 manager, Mrs Page. Although she was appointed, she did not fulfil all the criteria, and a training programme was set in place, which the Appellant, in part, was going to be asked to conduct. He was told that there was to be the appointment of a QC manager at a meeting on 14 March, and was:

"reminded by Ms Hamling that there would be change to his job, and that the rationale for the decision was to have an individual based in QC on a part-time basis, to assist in developing and supporting him."

[5]It seems that on the meeting of 14 March, on the findings by the Tribunal, that he confirmed that it was fine to have a manager, and Ms Martin, another of the Directors, explained the difference between his role as supervisor, responsible for the day to day management of the section, and that of a manager. But the Appellant, in the event, was upset by what had occurred, and he was invited to make a formal grievance, and in paragraph 3(ix) the Tribunal record:

"It is clear from his grievance letter that it was the decision to have a new QC manager that was at the bottom of his complaint."

[6]The findings by the Tribunal, in the event, are very carefully analysed and reasoned, and, as will be apparent by reference to them, to the detail of which we will return, they can be summarised in this way: that the breaches by the Respondent, which the Tribunal found, were procedural breaches, breaches in the way in which they handled both the announcement that there would be a new QC Manager and the appointment of that QC Manager, and the way in which they handled the grievance procedure; but that the appointment of the QC Manager per se, and in particular the fact that the Appellant was not appointed such QC Manager, and that someone else was thus appointed QC Manager over and above him, were not breaches of his contract of employment. Thus there were no what one might call substantive breaches.

[7]This is very clear from the conclusions by the Tribunal in paragraph 5. In paragraphs 5(i) to (iv) the Tribunal summarises what we have called the "procedural breaches" as follows:

"(i) On 12 March 2003, Ms Hamling had already decided to appoint someone to become manager of the OC Department. This decision was taken, it appears to us, without warning to the Applicant or consultation with him or indeed with anyone else. It seems to have been something of a snap decision on her part, against the background of the performance issues that we have alluded to. The board effectively rubber stamped that decision the following day. We think that this was something of an insensitive approach by Miss Hamling, as, although the Applicant had been warned about his performance, he had not been formally disciplined and we are not surprised that he was somewhat shocked by the announcement. To that extent we feel that this incident undermined the relationship of trust and confidence between the employer and the Applicant. (ii) Ms Page was the person appointed and the Applicant was asked to take part in her training. Again, we find that this was something of a slightly insensitive decision in that he was being asked to train somebody who was to take over the running of his department. (iii) The IPRs (Individual Performance Reports) were supposed to take place every two or three months but did not do so at all in a crucial period of time between September 2002 and March 2003. If they had there would have been an opportunity for discussion about problems that were arising in the QC department, against a background where Ms Hamling herself did not have time to devote to the proper management of that department, as she had other responsibilities elsewhere. There was an HR manager and director, but Ms Martin was inexperienced and had little training or knowledge of the subject. (iv) The grievance procedure was not properly applied or followed. It was clearly not appropriate to appoint Ms Martin initially to conduct the grievance and she was involved in the decision that was being complained about and in any event was unlikely to be persuaded to overturn a decision that had been taken by a more senior director. Mr Brannan's position was equally compromised, and the further difficulty was that he was on the same level as Ms Martin rather than at a higher level, as one would expect for an appeal manager. This meant that the confidence of the Applicant in the process was undermined. We feel that if the appeal had been conducted by somebody from outside the company, suitably experienced and qualified, then that might have overcome the defects in procedure to that date"

[8]The conclusion of the Tribunal is in paragraph 5(v) as follows:

"(v) Thus it is our unanimous decision that these factors cumulatively meant that there was a breach of the implied term of mutual trust and confidence; and in accordance with Morrow -v- Safewav Stores that must be a fundamental breach of contract."

Mr Preston, for the Respondent, has submitted that the reference in paragraph 5(i) to the incidents on 12 March, undermining the relationship of trust and confidence, is not an express finding that it amounted to a breach, but we agree with Ms Reindorf that that undermining, albeit not enough, perhaps of itself, falls to be taken together with the other factors in (ii) and (iii), which are perhaps even more minor, but with (iv) in relation to the failure with regard to the grievance procedure, so that, as the Tribunal itself put it, cumulatively, those factors amounted to a breach; and consequently the way in which the Respondent handled the appointment of the new QC Manager, not the Appellant, was in a manner which breached the implied term of trust and confidence between the Appellant and the Respondent, and of course in line with the jurisprudence that any breach of that implied term is repudiatory, the Tribunal came to the conclusion it did in paragraph 5(v).

[9]But, of course, as the Tribunal well recognise, that is not enough to establish a constructive dismissal, never mind an unfair constructive dismissal, because a repudiatory breach must be accepted by the Appellant, and where there is a recognition, the Tribunal must be satisfied that the repudiatory breach alleged was the effective cause of the resignation, and thus the constructive dismissal.

[10]There is no express reference in the Tribunal's Decision to the very well known case of Jones -v- Sirl & Son (Furnishers) Ltd [ 1997] IRLR 493 , in which an employee who alleged, successfully, repudiatory breach of his contract over a period, in fact resigned because he had another job available to go to, and failed in the Employment Tribunal on the basis that, in those circumstances, the breaches of contract were not the effective cause of his resignation, but that the other job was. We do not know, of course, because we have not a report of the Tribunal's Decision, whether the Tribunal used the words "effective cause" or whether effective cause became elevated into the proper test as a result of the decision of the Employment Appeal Tribunal per Judge Colin Smith QC in that case; but it is now well established that that is the correct test and that the words of Judge Smith in that case, in paragraph 13, are helpful guidance in other situations. He said as follows:

"In our judgment, in the case of an employee like the appellant who had been in the selfsame employment for a period of almost 30 years, the overwhelming presumption is that when a whole series of serious breaches of contract occur over a few months between July and October 1993, and the employee then leaves only three weeks later to go to another job, the effective cause of her leaving is the fundamental breach of contract. While the breach must be the effective cause of the resignation, it does not have to be the sole cause and there can be a combination of causes provided the effective cause for the resignation is the breach "

In that case, consequently, the Tribunal found that the effective cause was the breaches, albeit that it may be that the trigger for the departure might have been the availability of the other job, which enabled the Applicants there to accept the repudiatory breach.

[11]That well known case cannot have been unknown to the Tribunal, but the lesson to be learned from the case is that there can be more than one effective cause, certainly, but that the reality is that the Tribunal must decide - it does not need to be the sole cause, that is the real lesson to be learned, that there can be other contributing factors - what the effective cause of the resignation is.

[12]It is quite apparent that the Tribunal applied the correct test in answering the question that they did in this case in the balance of paragraph 5, which we shall read: (vi) However, it is not enough for the Applicant to establish that there has been a fundamental breach of contract. He must also establish that that breach of contact caused him to resign. We unanimously conclude that the breach complained of … and we interpose the breach which the Tribunal had found in paragraph 5(v) - "did not cause the Applicant to resign. As is clear from the documents, the Applicant resigned because the Respondent would not reverse its decision to appoint a QC manager. He made it clear at all times that he wanted to be QC manager and indeed told us that he should have been promoted to QC director. We have pointed to a number of instances in the correspondence from him or in other minutes of meetings and so on where it is clearly stated that that is his position. We do not criticise the Respondent for appointing a QC manager other than the Applicant. He has shown us by his evidence and the presentation of his case that he was not suitable for that role. He lacked the necessary managerial experience. He did not appear to understand the seriousness of the performance failings identified by Ms Hamling (vii) Thus, the Applicant has not satisfied us that the breach of the implied term caused him to resign. We conclude that he would have resigned anyway …" and this is a central passage, in our judgment "even if there had been an impeccable grievance process conducted in the way that we have suggested it should have been conducted. There being no causal link between the breach of the implied term and the decision to resign, there is therefore no constructive dismissal in this case."

[13]The Tribunal then went on in paragraph 5(viii) to deal with a fall-back conclusion that because he would not have been promoted to be QC Manager anyway, he had suffered no loss, and they do this inter alia by reference to the unavailability of a remedy which the Tribunal was noted was what he was actually seeking from it, although it could not give it, namely re-engagement or reinstatement as QC Manager, which it noted was beyond its powers.

[14]Both Ms Reindorf and Mr Preston are agreed that there needs to be no separate consideration of the complaint which Ms Reindorf makes by way of a separate ground of appeal, in respect of that fall-back conclusion by the Tribunal, if in fact the Tribunal is upheld on its main conclusion; but it is perhaps indicative that the fall-back conclusion repeated its conclusion, recited already in paragraph 5(vii), that, in its judgment, what the Appellant really wanted was something that he was not ever entitled to expect to have attained, namely appointment as QC Manager.

[15]The position in those circumstances, it seems to us, is wholly clear, namely that the Tribunal, after very carefully analysing the evidence before it, decided that there had been a breach in relation to procedure and that the Appellant did not resign for that reason, but because he wanted to be QC Manager, and that it was not a breach of contract not to have appointed him as QC Manager, or to have appointed someone else above him.

[16]That is, it seems to us, a very careful and full analysis of its own reasoning which this particular Tribunal of fact must have thought about a good deal before arriving at it. Ms Reindorf submits that it is different from a case in which the breach found is in a different factual context to the reason for the resignation, but in a way, that almost emphasises the carefulness of the distinction which this Tribunal made, and since it is the Tribunal judging the facts, we are quite unable to interfere with that finding or conclude it to be perverse, as Ms Reindorf would need to submit if she were to be successful; and of course perversity is an extremely difficult ground upon which to succeed before this Tribunal, not least in the light of recent guidance by the Court of Appeal.

[17]In those circumstances, given that there is found this careful distinction, which is no well analysed by the Tribunal, and that the reason for the dismissal is found to be a matter which was not the subject of breach, and that we are entirely satisfied that Jones -v- Sirl , even if it had been expressly mentioned, would not have led the Tribunal to any different conclusion, nor that the conclusion it made in any way offended against the reasoning in terms of Sirl , there is only one way, in those circumstances, in which Ms Reindorf can put the case. That is, assuming that there is a distinction - which we know she does not, but we are satisfied there was - such as we have described, that the Tribunal was perverse in ascribing the resignation to the reason that the Tribunal found, rather than to the Appellant's unhappiness at the manner of the appointment, and his loss of confidence in the employer resulting from it.

[18]That, in itself, would depend upon a conclusion that the Tribunal were perverse in so concluding, and we are satisfied that the case does not come anywhere near a case of perversity. The Tribunal has recited the evidence upon which it relied to conclude that the reason for the resignation was not the Appellant's lack of confidence in the Respondent because of the manner of the procedure, but because he felt that he should have been appointed as QC Manager, and because the Respondent would not reverse its decision to appoint somebody else, which was not a breach of contract. That was the effective cause of the resignation, and it was not a breach. Those were the findings of the Tribunal and we are unable to interfere.

[19]In those circumstances this appeal is dismissed.