SCOTTISH ROOFING SERVICES v (1) MR G E FORREST (2) MR R HOWELL [2006] UKEAT 0063_05_1801

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2006] UKEAT 0063_05_1801Case No Appeal No. UKEAT/0063/05Venue 52 MELVILLE STREET, EDINBURGH EH3 7HS
Between
SCOTTISH ROOFING SERVICESAPPELLANT(1) MR G E FORREST (2) MR R HOWELLRESPONDENTS
Before
Lady Smith Miss J A Gaskell Mr R P ThomsonDate 18 January 2006
[1]APPEARANCES For the Appellant MS E J BELL Solicitor Messrs Brodies LLP Solicitors 15 Atholl Crescent Edinburgh EH3 8HA For the Respondent Mr E T SCOTT Solicitor Messrs Campbell Smith Solicitors 21 York Place Edinburgh EH1 3EN SUMMARY Three roofers claimed that they had been unfairly constructively dismissed. After review, the tribunal determined that the reason for their resignation was a material and repudiatory breach of contract by their employers in respect that they had indicated that the claimants would not get work on a particular site unless they became self employed. Other matters were referred to in a solicitor's letter sent at the time of resignation. The Employment Appeal Tribunal held that, on the evidence, the tribunal's finding was perverse. The solicitor's letter indicated that there was a single cause, namely the claimants having been given yard cleaning duties, a matter which was not found by the tribunal to have been a breach of contract. There was no other evidence as to the cause of their resignation. THE HONOURABLE LADY SMITH PRELIMINARIES This is a claim brought before the Employment Tribunal in respect of a case in which the claimants, who were skilled roofers, alleged that they had been unfairly constructively dismissed.[2]We will refer to the parties as claimants and respondents. Introduction[3]This is an appeal by the respondents in those proceedings against a Decision of an Employment Tribunal, sitting at Edinburgh, Chairman Mr JGd'Inverno, registered with Extended Reasons on 10 th January 2005. The claimants were represented there and before us by Mr Scott, solicitor and the respondents were represented there and before us by Ms Bell, solicitor.[4]The decision of the Employment Tribunal was that the claim was upheld. The issues[5]The issues that the tribunal appear to have addressed were whether or not the claimants had resigned from their employment, if so what was the cause of their doing so and whether that cause was a repudiatory breach of contract by the respondents. The facts[6]The claimants were employed by the respondents as roofers. During the first week of September 2003, they worked on a site in Manchester. They expected to be working on a site at Gogarburn, Edinburgh, thereafter, it having been indicated by the respondents that it was their intention that they should do so.[7]On 8 September 2003, the claimants attended at the Gogarburn site and inspected the roof, which was not yet ready for work to start. On 9 September, in accordance with the respondents' instructions, they attended at a site at Greenside in Edinburgh and worked there. They were told that they might have to return to Manchester later in the week, which did not please them. There was also an argument between them and the respondents' Mr Goldie regarding what sums were due to them. On 10 September the claimants started work at the Gogarburn site. They were advised, that day, by Mr Goldie and another of the respondents' employees, Mr Cairns, that they would not get work on that site unless they became self employed. They did not wish to do so and indicated that that was their position. They were then told that they would require to return to Manchester the following day, which they refused to do. On 11 th September, they presented themselves for work at the Gogarburn site. Mr Goldie arrived and suspended the claimants. However, later the same day, they were reinstated and told to report to the Glasgow yard on 12 th September, which they did.[8]On 12 September, which was a Friday, the claimants were give general labouring duties to perform. They did not consider those duties to be appropriate to their status. They took the day off on 15 th September and consulted their solicitor. They instructed their solicitor to write to the respondents, which he did, in the following terms:
"Dear Sirs GEORGE FORREST, ROBERT HOWELL STUART HUNTER We act for George Forrest, 27 Southhouse Road Edinburgh, Robert Howell, 12 Ferniehill Terrace Edinburgh and Stuart Hunter, The Bungalow Easter Dalmeny, South Queensferry each of whom have consulted us about recent events impinging on their contracts of employment with your Company. Our clients advise that they are roofers in the employment of your company. They also indicate that you recently instructed them to complete work -on a roofing contract in Manchester and report –on site at the new Royal Bank of Scotland Headquarters Building currently in process of construction at Gogarburn. They further inform us that you told them that they were to take part in roofing work at the new building. It appears, however, that when they reported on site at Gogarburn they found that a squad of self-employed roofers was engaged in undertaking the roofing work which your company had contracted to carry out. It also seems that you advised our clients that they would have to leave the employment of your company and become self-employed before they began roofing work on the new building at Gogarburn. We further understand that when our client refused to resign you suspended them without pay. It further appears that you subsequently lifted our clients' suspension after they protested about matters and in particular pointed out that you were in breach of contact. We also understand that you instructed them to attend at your premises in Glasgow where you allocated them to cleaning up duties. Our clients advise that they were employed by you as roofers and not as casual labour to sweep up the yard at your Glasgow premises. They further tell us that in their view (a view with which we agree) you have in effect constructively dismissed them by instructing them to undertake work which is materially at variance with the work which they were employed to do in terms of their contract of employment. Our clients further advised that they are not prepared to undertake duties which are materially in conflict with the contents of their contract of employment and also bears no relationship to the nature of the work which they have actually being doing, that is until recently completed working in Manchester. In the circumstances please advise what steps you intend to undertake to provide them with work of a kind which they contracted to do when they entered into the employment of your company and which in fact they have been doing until they recently completed working in Manchester. We look forward to hearing from you as a matter of urgency. This letter is written without prejudice to any rights and pleas which our clients may have and is not to be founded upon."
[9]Although it is implicit in the tribunal's findings that the claimants ceased working for the respondents, it is not possible to ascertain from the findings in fact when it was that they did so. In the judgment of the tribunal issued after the review hearing, they refer to the claimants resigning on '16/17 September' and it seems implicit from their findings at paragraph 20 of the original reasons that the claimants did not return to work after their solicitor's letter was sent, but no other findings are made regarding the exact timing of their resignation. The Judgment[10]In their original extended reasons, the tribunal clearly stated their finding that the respondents were in breach of contract in one respect only, namely that they indicated to the claimants that they would require to become self – employed to work on the Gogarburn site. That was found by them to be a material and thus repudiatory breach of contract.[11]In the original reasons of the tribunal, the following findings are of particular relevance:
"20. On Monday 15 September the claimants consulted their solicitor, where, having taken legal advice, they concluded that the respondents had acted in a manner repudiatory of their contracts of employment by requiring the claimants to become self employed before being allowed to work on the Gogarburn site, by having suspended them without pay, by having allocated them cleaning duties on Friday 12 September and thus instructing them to undertake work which was materially at variance with the work which they were employed to do in terms of their contracts of employment. The claimants resolved to accept that repudiation and to communicate their resignation thus terminating their contracts of employment and thereafter to pursue a claim for constructive dismissal. The claimants instructed their solicitors to write to the respondents in terms of his letter of 16 September 2004 which is copied and produced at R10. The claimants' solicitors so wrote and the claimants' employment with the respondents was effectively terminated the following day, 17 September 2003, when the respondents received the said letter. In so instructing their solicitor to the claimants, with the benefit of his legal advice, fully understood that they were determining their contracts of employment with the respondents. 23. That by informing the claimants on 10 September 2003 that they would not be allowed to work on the Gogarburn site unless they consented to cease employment with the respondents and adopt self-employed status, the respondents, Mr Goldie, materially breached the claimants' contracts of employment by effectively withdrawing from them their expected high earnings such as to constitute a repudiation of those and entitling the claimants, on acceptance of that repudiation, to resign without notice in terms of Section 95(1)(c) of the Employment Rights Act 1996… 24. The claimants so resigned and were constructively dismissed by the respondents. As at the date of hearing on the merits roofing work of the type previously carried out by the respondents was still being carried out by the other squad at Gogarburn."
Paragraph 20 can thus be seen to contain a finding that the claimants accepted a repudiation of contract by the respondents the nature of which can be found in the three matters referred to. Further , it is evident from the tribunal's reasons that the sole source in the evidence for the findings as to the cause of the claimants' resignation lay in the terms of the letter written to the respondents by the claimants' solicitor dated 16 th September 2004 that is referred to. That is where reference to those three matters can be found. No other evidence is referred to in that respect. Further, we were advised by parties' solicitors at the appeal hearing that the only document that was relevant to that issue was that letter and that neither claimant gave any evidence as to what was the effective cause of his resignation. It was not suggested that any other witness had given evidence that was relevant to the issue. Accordingly, the only proper basis on which the tribunal could proceed was that to find the cause of the claimants' resignation, they required to look at the terms of the letter and only the terms of the letter. The Review[12]The respondents sought a review of the tribunal's findings on the basis that the tribunal had not found what was the effective cause of the claimants' resignation. They requested the tribunal, in terms of their solicitor's letter dated 20 January 2005, to ' - make a finding as to the effective cause of the resignation - to set out a basis of that finding.' After the review hearing, the tribunal amended its earlier findings, insofar as is relevant for present purposes, so as to insert the following finding in fact:
"In resigning , which resignation they communicated by means of their solicitors' letter of 16 September 2003 , the claimants did so in response , in part , to the material and repudiatory breach of their contracts of employment which was constituted by the respondents' Mr Goldie informing them , on 10 September 2003 , that they would not be allowed to work on the Gogarburn site unless they consented to cease employment with the respondents and adopt self – employed status . Although not the only matter in respect of which the claimants, at the point of their resignation sought to respond, the said material and repudiatory breach of contract was the effective cause of their resignation."
[13]The tribunal state, in paragraph 19 of their review judgment, that they:
" ..reviewed the oral and documentary evidence in the case noting on the one hand the earlier identified mutual inconsistencies in aspects of the oral evidence and as between the oral evidence and various earlier iterations of the claimants' position and , on the other hand , the somewhat ambiguous wording of the letter of 16 September 2003." and, at paragraph 21 , after explaining their construction of the letter they state: "
Having reached that conclusion on the construction of the letter of 16 September the tribunal turned to re-evaluate its evidential worth and consequence in the context of the wider oral and documentary evidence ." Nowhere is there any statement or explanation of what the wider oral and documentary evidence was that was said to have relied on by the tribunal in addition to the evidence provided by the letter of 16 September despite the issue raised being a critical one . That is highly unsatisfactory. Further, given the information that we were given by parties in the course of the hearing before us that there was no other relevant evidence on this matter, the majority of us feel bound to conclude that the tribunal's reference to reviewing other oral and documentary evidence is misconceived. If they did review other evidence it cannot have been evidence that was relevant to this issue.[14]We note further that it remains the position , post review, that the tribunal have not found there to have been any material breach of contract by the respondents beyond their having indicated that the claimants would require to become self employed. The appeal[15]The respondents appealed against the tribunal's decision as amended on review. Claimant's case[16]Ultimately, the claimants' case before the tribunal was that they had been unfairly constructively dismissed in respect that the respondents had materially breached their contracts of employment in three separate respects which individually and collectively amounted to a repudiatory breach. Those three respects were: - that the respondents had informed the claimants that there would be no work for them at the Gogarburn site unless they agreed to become self employed - that the respondents had requested and instructed that the claimants attend at the Manchester site on 11 and 12 September - that the respondents had instructed the claimants to carry out general labouring and tidying up duties in their yard on 11 September It was argued that these matters had entitled the claimants to resign, that they had so resigned and that they had, accordingly, been constructively dismissed. Respondents' case[17]On behalf of the Respondents it was contended that, as a matter of fact they had not acted in the three respects founded upon. Even if they had done, those acting did not, in all the circumstances, amount to a repudiatory breach.[18]The respondents also argued that if the claimants had been constructively dismissed, any award ought to be reduced on account of their having contributed to their own dismissal, a matter with which this appeal is not concerned. The legal principles[19]The legal principles to be applied are well recognised and were not at issue in this case. For a claimant to succeed in a claim that he has been constructively dismissed, he must show that the employer materially breached their contract in a manner which goes to the root of the contract, demonstrating that he no longer intends to be bound by its terms ( Western Excavating (ECC) Ltd v Sharp [1978] IRLR 27 .) Further, constructive dismissal being a concept which arises in the context of termination of contract by a repudiation by one party which is accepted by the other party, the claimant also requires to establish that he resigned in response to the repudiatory breach founded on ( Western Excavating (ECC) Ltd v Sharp; Walker v Josiah Wedgwood & Sons Ltd [1978] IRLR 105; Jones v F Sirl & Son (Furnishers) Ltd [1997] 493; Nottinghamshire County Council v Meikle [2004] IRLR 703 ) . This is a question of fact. In Jones , the Employment Appeal Tribunal referred to it being a matter of identifying the 'effective cause' of the resignation. In the Nottinghamshire Council case, the Court of Appeal whilst not, it seems, disagreeing with that approach, preferred an approach that stressed the importance of being satisfied that the resignation was in response to the material breach: " It must be in response to the repudiation…" (Lord Justice Keene at paragraph 33) . The Appeal[20]Ms Bell, in a clear and able submission, indicated that the respondents' position was that the tribunal's decision was perverse. The history of the case was that the claimants had sought to establish a number of breaches of contract on the part of the respondents, as was evident from the statement of issues contained in paragraph 5 of the tribunal's reasons .The tribunal had, though, found that there was only one material breach of contract, namely the self employed status matter. That was a key finding. The tribunal had not, however, in their original reasons, found that it was the effective cause of the claimants' resignation.[21]The letter of 16 th September was the only evidence as to the effective cause of the claimants' resignation. The tribunal themselves had found, after review, that it was the means whereby they communicated their reasons for resigning. The key was the word 'by' which appeared in the fourth paragraph. The letter then went on to elaborate on that matter. The tribunal were not entitled to conclude, on the evidence of that letter, that the claimants resigned in response to the self employed status matter. Further, whilst the tribunal referred to having taken account of other oral and documentary evidence, it was not possible to ascertain from their judgment what evidence that was.[22]In support of her submissions, Ms Bell made reference to the cases of Walker v Wedgwood , Jones v Sirl , Notttinghamshire CC v Meikle , and O'Shea v Coventry City Council UKEAT/))0046/04/CK , the last of these for an example of the way in which a tribunal requires to analyse a constructive dismissal where the cause of resignation is at issue.[23]Mr Scott, for the claimants, sought to submit that there had been a continuum of events beginning with Mr Goldie indicating, on the Wednesday, that the claimants required to be self employed, moving on to their being told to return to Manchester and resulting in their being told, on the Friday, to carry out cleaning up duties in the yard. These events were all interconnected. The tribunal were, accordingly, entitled to find as they had done.[24]He accepted that the letter of 16 September did not read as a resignation letter and that it could, in hindsight, have been better drafted, but it had come to be regarded as a resignation letter in the course of the hearing before the tribunal.[25]Regarding the tribunal's approach at review, Mr Scott said that the tribunal had had the whole sweep of evidence before them and on that evidence, they were entitled to regard the yard incident as a 'last straw' matter with the self employed status matter being the effective cause. He did not refer to any other evidence that was relevant to the issue of the cause of the claimants' resignation and, as we have already noted, indicated that, on that matter, the documentary evidence was the letter of 16 th September and there was no oral evidence from the claimants as to the effective cause of their resignation. Discussion[26]The tribunal refer in their original decision to the letter of 16 September for an explanation of what gave rise to the claimants' resignations. It is also quoted in full in the tribunal's judgment following review on 17 June and 6 July 2005. The tribunal state, at paragraph 19 of their review judgment that they have: "reviewed the oral and documentary evidence in the case" and find that the meaning of the letter of 16 September was that the matter of self employment was not the sole reason for the claimants' resignation. As we have already commented, the majority of us find the reference to other evidence to be misconceived. The tribunal make a finding that the resignation was but 'in part' due to the self employment matter. Whereas the letter referred to the claimants having been instructed to tidy up the yard as the factor amounting to constructive dismissal, that was, they said, to be seen as the 'last straw' They then proceeded to add the finding to which we have already referred.[27]The letter of 16 September is at the heart of this case. The tribunal found that it was the means by which the claimants communicated their resignation to the respondents. It is the only evidence as to the nature of the claimants' complaints and, if it is to be seen as a letter of resignation it is the only evidence as to the reason for resignation. It is clear that the tribunal proceeded both at the original hearing and at review, on the basis that it was a letter of resignation and that the reason for the claimants' resignation is to be found within its terms. We have some difficulty with that approach. The letter of 16 th September makes reference to constructive dismissal in the context of the claimants' objection to being told to perform tidying up duties but it does not read as a letter of resignation at all. The final paragraph calls on the respondents to: " ..advise what steps you intend to undertake to provide them with work of a kind which they contracted to do when they entered the employment of your company…" , That is a call which is wholly inconsistent with resignation. An employee who is intimating resignation does not call on his employer to tell him what he is going to do about providing him with suitable work. However, it seems that parties proceeded on the basis that the letter was to be seen as, in effect, a letter of resignation. Further, as we have indicated, it is the only available evidence as to the reason for the claimants having left the respondents' employment.[28]Further, what is most significant for the purposes of the present appeal is that that letter, in our view, makes it plain that the one matter founded on by the claimants as amounting to constructive dismissal is that they were instructed to carry out tidying up duties in the yard. It is not a letter that was drafted by a layman. It is a letter which was drafted by the claimants' solicitor at a critical point in the employer/employee relationship and is clear and unambiguous in its terms. The solicitor can be taken not to have used the expression 'constructive dismissal' lightly and the only mention of it is the allegation that the respondents 'have in effect constructively dismissed them by instructing them to undertake work which is materially at variance with the work which they were employed to do …' (our emphasis)[29]That is put forward as a major complaint and a matter of major concern and it is that matter that they call on the respondents to address. Thus, if the letter is to be viewed as a letter of resignation, it seems to us that the only conclusion that can be drawn is that the reason for the resignations was the respondents having instructed the claimants to tidy up the yard rather than carry out duties appropriate to their status as skilled roofers. The tribunal did not, however, find that that instruction amounted to a breach of contract at all, let alone a material breach. We do not see that the letter could be interpreted as indicating that the repudiation that was being founded on was anything other than that and that alone. Its terms cannot, in our view, support an interpretation that the self employment matter played any part in the claimants' reasoning for taking the view that their employers had repudiated their contract.[30]The tribunal did not find that the respondents having given the claimants' tidying up duties in the yard amounted to a material breach of contract and the majority of us are, accordingly, satisfied that it was not open to the tribunal to find, as they have now done, that the effective cause of resignation was the one matter out of the three issues raised before them that they found to have amounted to a repudiatory breach.[31]We were not persuaded that the tribunal could properly have regarded this case as one concerning a continuum of events, as was suggested by Mr Scott. Not only did they not make such a finding, they, on the contrary, found that the instruction to the claimants to return to Manchester was a lawful instruction. The claimants did not follow it although, given the finding that it was a lawful instruction, they should have done. Had they done so, since, on the tribunal's findings, a further two or three days work required to be carried out at the Manchester site, they would not have been in Glasgow on Friday 12 th September and the 'yard' incident would never have arisen. In these circumstances, it would have been quite wrong of the tribunal to find that the events of Friday flowed directly from the breach of contract regarding the self employment matter that was committed on the Wednesday.[32]We should add that we are, of course, well aware of the line of authority to the effect that in a 'last straw' case, each and every incident founded on need not, of itself, amount to a material breach of contract ( e.g. Garner v Grange Furnishing Ltd [1977] IRLR 206; Woods v WM Car Services (Peterborough)[1981] IRLR 347 ; Lewis v Motorworls Garages Ltd [1985] IRLR 465 ) . However, that approach is, in our view, not one which was open to the tribunal. It is erroneous in two respects. Firstly, in 'last straw' cases, an employee founds on a series of breaches of contract, often trivial, culminating in a final breach which he treats as the ' last straw'. In this case, on the tribunal's findings, there was no series of breaches of contract. There was a single breach which was also a material breach. The two other matters referred to in the letter of 16 th September were not found to be breaches of contract and so cannot be founded on as being a part of a series of breaches. Secondly, even if those other two matters had also been breaches of contract, we do not see that the letter can be interpreted as indicating that they formed any part in the reason for the claimants' resignation. It is not them that the claimants were, in terms of that letter, responding to.[33]In these circumstances, the majority of us are readily persuaded that the tribunal's finding inserted after review, is perverse, having no basis in the evidence and that the appeal should, accordingly, be allowed. Disposal[34]Ms Bell submitted that if we granted the appeal, we should make a finding that the effective cause of the claimants' resignation was contained in the letter of 16 th September and was the 'yard cleaning' matter. The result of that would be that since that matter was not found to have been a breach of contract, a finding that the claimants had not established that they had been constructively dismissed should follow and the claimants' claims should be dismissed.[35]Mr Scott submitted that if we did not accept his submissions in support of his motion that the appeal should be dismissed then we should remit the case back to the tribunal for clarification as to why they had found the respondents' material breach of contract to be the effective cause of the claimants' resignations.[36]The majority of us considered whether it would be appropriate to accede to Mr Scott's proposal that, in the event we were minded to allow the appeal, we should remit to the tribunal in the terms suggested by him. However, if we were to do so, we would be asking a question which was asked of them on review. They have already been given an opportunity to answer it and have done so and we cannot see that there is any justification for affording them a second 'bite at the cherry'. We have their answer. It is, for the reasons we have explained, in the view of majority, perverse and given that the determination of the point at issue was dependent only on the interpretation of the letter of 16 th September, we cannot see that there is anything further for the tribunal to explain.[37]The majority of us are satisfied that the disposal proposed on behalf of the respondents follows logically, from our decision in this case. We shall, accordingly, pronounce an order allowing the appeal, substituting for the tribunal's finding that was inserted into the beginning of paragraph 24 of their reasons after review a finding that the claimants resigned in response to the respondents having, on Friday 12 th September 2003, instructed them to carry out cleaning up duties in their Glasgow yard , substituting for the tribunal's finding that the claimants' were unfairly constructively dismissed a finding that the claimants have not established that they were constructively dismissed and dismissing their claims. Dissent[38]One of the lay members, Mr Thomson, dissented from this decision. The Employment Tribunal had, he observed, found that the issue of self employed status was a material and repudiatory breach of contract and on the basis of oral and documentary evidence submitted, found that it was the effective cause of the claimants' resignation. His view was that specific issue of what that oral and documentary evidence was should be remitted back to the Employment Tribunal for them to give details of it and re – issue their decision. If they were unable to do so, they should, he felt, review their decision. Alternatively, he considered it would be in the interests of justice that the case be remitted to a newly constituted tribunal for a re hearing.