LEWISHAM HOSPITAL NHS TRUST v MRS A T DIFFANG [2005] UKEAT 0022_05_0405

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2005] UKEAT 0022_05_0405Case No Appeal No. UKEAT/0022/05Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
LEWISHAM HOSPITAL NHS TRUSTAPPELLANTMRS A T DIFFANGRESPONDENT
Before
His Honour Judge Birtles Mr J HoughamDate 4 May 2005
[1]APPEARANCES For the Appellant MR JONATHAN MOFFETT (Of Counsel) Instructed by: Messrs Captsticks Solicitors General Accident Building 77-83 Upper Richmond Road Putney London SW15 2TT For the Respondent MR CHRISTOPHER CAMP (Of Counsel) Instructed by: Lewisham Law Centre 28 Deptford HighStreet London SE8 4AF SUMMARY ET(1) failed to apply correct test in ascertaining whether the implied form of trust and confidence was involved.(2) gave no reasons for finding a 3 year period for loss of future earnings when Applicant was making no arrangements to find full time employment. Appeal allowed. HIS HONOUR JUDGE BIRTLES This is an appeal from the Decision of an Employment Tribunal sitting at London South on 24 September 2004. The Claimant was Mrs A T Diffang. The Respondent was University Hospital NHS Trust, Lewisham. The Chairman was Mrs J Gilbert and the members were Mr A J deLaunay and Mr C Easterling. The unanimous decision of the Tribunal was that it dismissed the claim for sex discrimination but found that the Applicant had been constructively unfairly dismissed.[2]The material facts are set out in paragraphs 5.1 – 5.9 of the Employment Tribunal Decision:
"5.1 The Claimant was a very experienced and highly competent midwife on F grade. In july 2003 she saw a notice on the board advertising the post of "acting team leader grade G/enhanced F grade" and applied for it. 5.2 It was close to the closing date of 25 July and she asked Pauline Esson, her line manager, for an application form. There is a dispute as to whether Mrs Esson told the Claimant to return the form to her (her evidence) or said nothing. In any event the Claimant took the form to human resources. Unfortunately the form never reached Mrs Esson and another person was appointed. Mrs Esson did suggest that the Claimant should provide her with another application form for the enhanced F-grade post so she could use it to meet her and to go through the application in order to assess how she could prepare herself for enhanced F-grade development in the future. The claimant returned the completed form dated 20 August but no discussion took place. Mrs Esson believed it was for the Claimant to contact her. The Claimant's evidence was that Mrs Esson had said she would look at it and contact the Claimant which she had not done. 5.3 The Claimant then applied for a G grade team leaver post. Mr Jeffrey Heath also applied. Ms Sophie Cardon de Wiart and Mrs Esson conducted the interviews. She was interviewed on 22 September and Mr Heath on 25 September. Neither candidate was successful. However Mrs Esson and Ms Carton de Wiart felt that Mr Heath had shown more potential and decided to offer him a developmental acting G-grade team leaver position for a 6 month period. 5.4 The Claimant was not told of the result of her application. However she heard on the grapevine that Mr Heath had been given the G grade enhanced post. He was a younger male midwife. He had qualified in May 2000 and had worked mainly as a bank nurse. The Claimant's evidence was that Mr Heath was not a senior F grade, had never acted in a labour ward and that it was a tradition at Lewisham that before someone was appointed team leader they always had to have acted up. The Claimant herself had frequently undertaken the duties of a G grade midwife. 5.5 Two weeks after the interviews, on October 2, when the Claimant had not been told whether or not her application had been successful, she was finishing her night shift, and was approaching the hospital car park to go home when she met Sophie Carton de Wiart. She told the Claimant she wanted to give her feed back on the interview. It is not clear whether she intended to do it then or wanted to arrange a meeting to discuss the matter. We find it more likely that she had not intended to have a feed back discussion in the car park but wanted to arrange a date. Not surprisingly the Claimant was angry and upset and not prepared to discuss anything. She had heard that Mr Heath had been given what she thought was the G-grade team leader position. She decided she had to leave. She felt that she had not received recognition of her long service and hard work and had not had the guidance and mentoring she had sought. 5.6 On 6 November 2003 she wrote to Ms Kuypers, head of midwifery services, that she had decided to retire on 31 January 2004 and that her dedicated service had failed to be rewarded. She delayed her actual retirement until 31 January on the advice of the pension advisers so that she could receive a pension as soon as she stopped working. 5.7 On 11 November Ms Kuypers wrote to the Claimant expressing her appreciation but not inviting her to consider changing her mind. 5.8 On 28 December the Claimant was finally told by Pauline Esson that she had been unsuccessful in her application and that an "acting"
G grade team leader post had been offered to Mr Heath. 5.9 Up to then the Claimant had thought Mr Heath had been offered a substantive G grade post. Shortly after Mrs Esson met the Claimant in a corridor and asked her if she would like to talk about her decision to retire. The Claimant's evidence was that Mrs Esson promised her a G grade enhancement in March 2004 if she withdrew her resignation. This was denied by Mrs Esson who said in evidence that she had told the Claimant she would be considered in a competitive process. The Claimant asked for the offer to be put in writing. It was not and she did not withdraw her resignation."[3]In paragraph 6 the Employment Tribunal summarised the law relating to unfair dismissal and set out the conclusions of the well-known case of Western Excavating (ECC) Ltd v Sharp [1978] IRLR 27 . At the end of that passage it sets out the four conditions which are conditions precedent before an Employment Tribunal can find that a constructive dismissal has taken place and it goes on to say:
"Here it is alleged that there was a breach of the implied term of trust and confidence."
The Tribunal then move on to their conclusions on constructive dismissal in paragraphs 8.1 - 8.5. The Tribunal say this:
"8.1 We have to look at the position up to November 6 when the Claimant resigned. Events after that date are not relevant when considering what caused the Claimant to resign. The mislaid application form in July is relevant in as much as the Respondents knew that the Claimant felt upset and undervalued. She wanted promotion and in August had gone to see Barbara Kuypers and expressed her frustration at not having been shortlisted for the F grade post. The way in which the result of the interviews was handled was unfortunate to say the least. The actual appointment of Mr Heath as acting team leader as a developmental opportunity for six months was justified on the basis that the Respondents needed to fill the post as an interim measure until it could be advertised again. 8.2 However ideally both the successful and unsuccessful candidates should have been notified at the same time especially as they were both internal candidates working in an environment where news travelled fast. 8.3 The Claimant was interviewed on 22 September and Mr Heath on Friday 26 Mrs Esson was going to be away for three weeks on leave and asked Mrs Carton de Wiart to provide interview feedback. The latter worked part-time and on her next day back at work (2 October) bumped into the Claimant in the car park. The Tribunal considers that this amounted to unreasonable delay. By this time the Claimant had heard that Mr Heath had not got the job – the fact that it was a temporary role makes no difference. Mrs Carton de Wiart should have telephoned the Claimant over the weekend and informed her that she had been unsuccessful. The fact is that the Claimant, a loyal employee of 25 years standing, had not formally been told she had not got the job she had applied for and had to find out by rumour. 8.4 When Mrs Esson returned from leave at the end of October she had another chance to put things right by calling her in to talk to her. She did not do this and the Claimant wrote on November 6 resigning. We accept the Claimant's evidence that when she submitted her resignation she thought that a manager would talk to her and offer her a plan for the future. Had they done that she would have gone back. 8.5 We have no hesitation in concluding that the Respondents were in breach of the implied term of trust of confidence; that the dismissal was unfair and we uphold her claim."
The Tribunal then went on to deal with remedies.[4]We have been told by Mr Camp who appears for the Respondent here and we accept that neither party had expected to deal with remedies that afternoon but at the Tribunal's insistence that they did so late in the afternoon after the Tribunal had reached its decision. The Tribunal deal with remedies in two short paragraphs. They say this:
"9. Remedies 9.1 The Tribunal was told by counsel for the Claimant that he did not have the necessary figures to put in evidence in order to calculate her loss. We agreed to make certain findings which would enable the parties to agree a sum of compensation. 9.2 We heard evidence from the Claimant as to what work she had done since her resignation. We find that up to the date of the hearing the Claimant has done all that could be reasonably expected in finding work. She is obviously deeply upset and cannot be criticised for feeling way gently back into the work place. Her evidence was that in the future she might well apply for a permanent position. We are unable to say that she will be promoted to a G grade. We find that she would have continued working until 65, on the balance of probabilities as an F grade. We feel that in 3 years time she should have reached her previous earnings. Accordingly the period for future loss is 3 years."
[5]We have before us in the bundle an agreed note of the evidence of the Claimant Mrs Diffang: EAT bundle at pages 95 - 96. It is not necessary to repeat it but it does make clear to us is that Mrs Diffang, having left her employment on 31 January 2004 had commenced work on 11 May 2004 doing shift work in Portlands Hospital - two shifts a week. Her previous employment had been full time. She was cross-examined by the solicitor for the Respondent and was asked questions about what action she had taken in getting employment. She said that she had not made any other applications for employment other than the one to the Portlands Hospital or the relevant trust. She had thought about doing so but had decided not to do so because she wanted the opportunity to do voluntary work for a while and then possibly take up a permanent post. She agreed that age would not be a problem in obtaining a permanent post. The Respondent's solicitor wished to call evidence from one of the Trust witnesses in relation to midwifery jobs available at the Trust which would give an indication of the need for midwives across the NHS as a whole. The Chairman responded as follows: "I think we can take it that there are plenty of midwifery jobs" (or something similar to that). The Chairman therefore declined to hear evidence on that point in view of the opinion she had expressed.[6]Against that decision the Trust appeals to the Employment Appeal Tribunal. There are two grounds of appeal. We take them in turn. The first ground of appeal as expressed in the Notice of Appeal is that the Employment Tribunal reached a conclusion which was perverse or alternatively failed to apply the proper legal test when it concluded that the Appellant had committed a repudiatory breach of the Respondent's contract of employment such that the Respondent was entitled to resign.[7]That Notice of Appeal has been amplified by a skeleton argument drafted by Mr Jonathan Moffett of Counsel and he has supported it by his oral submissions. We also have the benefit of a skeleton argument and oral submissions from Mr Christopher Camp who appeared for the Claimant. He also appeared for her at the Employment Tribunal.[8]In essence, Mr Moffett has abandoned his appeal on the point of perversity and that is hardly surprising in the light of the decisions of the Court of Appeal in Picket Brothers and Co Ltd v Jackson [1991] IRLR 309 and the remarks by Mummery LJ in Yeboah v Crofton [2002] IRLR 634 at paragraph 93. The passages are so well known that they do not need reciting. Mr Moffett's appeal therefore on the first point is that the Employment Tribunal failed to apply the correct legal test when deciding that the Appellant here had committed a repudiatory breach of the Respondent's contract of employment.[9]The test for what is a breach of the implied term of trust and confidence is set out in Malik v BCCI [1998] AC 20 and in particular the passages in the judgment of Lord Nicholls at page 35 Letters C-D and Lord Steyn at page 45 Letters F-G. There is also helpful guidance in the judgment of Dyson LJ in the case of Omilaju v Waltham Forest LBC [2005] 1 All ER 75 at pages 80-81, paragraph 14:
"The following basic propositions of law can be derived from the authorities. (1) The test for constructive dismissal is whether the employer's actions or conduct amounted to a repudiatory breach of the contract of employment: see Western Excavating (ECC) Ltd v Sharp [1978] 1 All ER 713 . (2) It is an implied term of any contract of employment that the employer shall not without reasonable and proper cause conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee: see, for example, Malik v Bank of Credit and Commerce International SA (in liq) . I shall refer to this as 'the implied term of trust and confidence'. (3) Any breach of the implied term of trust and confidence will amount to a repudiation of the contract see, for example, Woods v WM Car Services (Peterborough) Ltd. The very essence of the breach of the implied term is that it is calculated or likely to destroy or seriously damage the relationship. (4) The test of whether there has been a breach of the implied term of trust and confidence is objective. As Lord Nicholls said in Malik 's case the conduct relied on as constituting the breach must – 'impinge on the relationship in the sense that, looked at objectively, it is likely to destroy or seriously damage the degree of trust and confidence the employee is reasonably entitled to have in his employer.' (5) A relatively minor act may be sufficient to entitle the employee to resign and leave his employment if it is the last straw in a series of incidents."
[10]This is not a final straw case. Mr Moffett submits in paragraph 12 of his skeleton argument and in his oral submissions that firstly, at no time in its decision did the Tribunal set out the legal test to be applied when determining whether there has been a breach of the implied term of trust and confidence. Second, the language used by the Tribunal in its decision indicates that it was not inquiring as to whether, judged objectively, the Trust had conducted itself in a manner calculated and likely to destroy or seriously damage the relationship of trust and confidence between itself and the Respondent. Rather, the language used suggests that the Tribunal was inquiring as to what "ideally" a "reasonable" employer would have done in the circumstances; and Mr Moffett refers to particular passages in the Decision - in paragraph 8.1, the use of the word "unfortunate"; in paragraph 8.2, the use of the word "ideally"; in paragraph 8.3 - the use of the word "unreasonable"; and in paragraph 8.4 - the use of the phrase "trust did not put things right". Third, Mr Moffett submits that the Tribunal concluded that a failure to tell an employee of the outcome of an appointments process until the fourth working day after the final interview in that process in circumstances where the two individuals with responsibility for the appointments process were not at work, is conduct calculated and likely to destroy or seriously damage the relationship of trust and confidence. He says that that conclusion is so surprising that it can only indicate that the Tribunal has applied the wrong legal test.[11]In reply Mr Camp submits that in fact what this amounts to is a Meek reasons submission dressed up in other language and there is nothing wrong with the approach of the Employment Tribunal. One must look first at the background - paragraphs 5.2 - 5.3 of the Decision and then against that background look at the reasons given by the Tribunal in paragraphs 8.1 - 8.4. We have hesitated in reaching a conclusion in this case but we accept the submissions made by Mr Moffett. It seems to us that the Tribunal have simply set out that the Claimant's allegation was a breach of the implied term of trust and confidence. In paragraph 6 of its summation of the law, it has not gone on to analyse that what that involves in this case.[12]It has failed to apply itself to the authorities and in particular the decision in Malik . We appreciate that the decision in Omilaju had not been given at the time of the Tribunal had reached its decision but that decision and the passage that I quoted from the judgment of Dyson LJ does no more than set out than in a succinct form what the law has always been on this particular issue.[13]Having failed to address the question of whether or not the employer's conduct in this case viewed objectively amounted to a breach of the implied term of trust and confidence the Tribunal then went on to find that it was solely the failure to notify Mrs Diffang within a short time after the end of Mr Heath's interview on Friday 22 September 2003 which amounted to a fundamental breach of the implied term of trust and confidence.[14]Given that the Tribunal had found that following Mr Heath's interview on 26 September 2003 that Mrs Esson was going to be away for three weeks on leave and that Mrs Carton de Wiart was away from work until 2 October 2003 we cannot understand how the Tribunal could possibly have concluded that those facts amounted to a failure to notify the Respondent that she had not been successful in her interview and how that could possibly amount to a fundamental breach of the implied term of trust and confidence viewed in an objective manner. The sole action which the Tribunal identified was a failure or rather omission by Mrs Carton de Wiart to telephone the Claimant over the weekend when she was not at work. The Tribunal make no finding where the Claimant would be either at work or at home and indeed whether Mrs Carton de Wiart actually had the Claimant's home telephone number in order to make that telephone call. On that paucity of evidence we find that the Tribunal has made an error of law.[15]The second ground of appeal relates to remedy and the Notice of Appeal puts it in this way:
"the Employment Tribunal reached a conclusion which was unsupported by evidence when it concluded that the period of future loss in the Appellant's case was three years."
The Tribunal heard evidence from the Claimant. We have set that out earlier in this judgment. It found that up to the date of the hearing that the Claimant had fully mitigated her loss. She had obtained part time employment. There is no appeal against that decision. However, the Tribunal went on to say that "her evidence was that in the future she might well apply for a permanent position. We find she would have continued working until 65 on the balance of probabilities in F grade. We feel in three years time she should have reached her previous earnings."[16]There are two errors here. First, there has been a complete failure by the Employment Tribunal to deal with the issue of mitigation of loss given the fact that the Tribunal accepted at the hearing that such midwifery jobs were readily and freely available. It gives no reasons as to why the Respondent could not have obtained employment within a three year period on indeed much earlier. Second, it fails to draw any distinction between the fact that up to the date of the hearing the Claimant was working two shifts a week whereas when she had worked for the Appellant she had worked on a full time basis. There is no attempt to explain or justify a finding that she would not have found full time employment for a three year period. There is indeed no explanation as to how the Tribunal reached that three year period or indeed much earlier.[17]It is necessary for us to find the Tribunal in error because otherwise if there had been a remedies hearing the Tribunal would have considered itself bound by its finding that the period of future loss was three years. We therefore allow the appeal on both grounds and remit this case for hearing to a fresh Tribunal both on liability and quantum.