DR I GIBSON & PARTNERS T/A BLANDFORD HOUSE SURGERY v MRS S A HUGHES [2006] UKEAT 0371_06_1309

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2006] UKEAT 0371_06_1309Case No Appeal No. UKEAT/0371/06Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
DR I GIBSON & PARTNERS T/A BLANDFORD HOUSE SURGERYAPPELLANTSMRS S A HUGHESRESPONDENT
Before
His Honour Judge McMullenDate 13 September 2006
[1]APPEARANCES For the Appellant MR K SONAIKE (of Counsel) Instructed by: Messrs Irwin Mitchell Solicitors 150 Holborn London EC1N 2NS For the Respondent MS A HARRISON (Solicitor) Free Representation Unit 6th Floor 289-293 High Holborn London WC1 7HZ SUMMARY Unfair Dismissal – Constructive dismissal The Employment Tribunal erred in applying the last straw doctrine of constructive unfair dismissal when, on affirmation of the contract by the Claimant following earlier breach, there was only one event to consider. This was the construction of a letter, and as a matter of law the contents could not amount to a breach of contract. The EAT substituted its Judgment for the Employment Tribunal's and dismissed the unfair dismissal claim. HIS HONOUR JUDGE McMULLEN QC This case is about unfair dismissal. The Judgment represents the views of all three members who pre-read the relevant papers and the additional documents provided to us today. We will refer to the parties as the Claimant and the Respondent. Introduction[2]It is an appeal by the Respondent in those proceedings against a majority Judgment of an Employment Tribunal sitting at Stratford East, constituted as Mr J Scannel, Chairman, Mrs J McPake and Mr B J Banks, registered with reasons on 3 May 2006. The Claimant was represented there and here by Ms A Harrison, a Solicitor on behalf of the Free Representation Unit. The Respondent was represented by Mr Miles Harris of Counsel. We will use our power to correct the Judgments accordingly. As he later became a witness the Appeal was conducted by Mr Kolarele Sonaike of Counsel.[3]The Claimant claimed constructive unfair dismissal and discrimination contrary to the Disability Discrimination Act 1995. The Respondent denied the claims and disputed the dismissal itself. The judgment[4]The majority of the Employment Tribunal, consisting of the Chairman and one member, dismissed the disability claim, then the two lay members, with the Chairman dissenting, upheld the unfair dismissal claim. The Employment Tribunal awarded £13,649 in compensation for unfair dismissal. The Respondent appeals against the liability Judgment. The Claimant does not appeal the disability point. Directions sending this appeal to a full hearing were given in Chambers by HHJ Serota QC. He also awarded the procedure under Practice Direction paragraph 11, relating to allegations of procedural irregularity. The Chairman and members and previous Counsel have all responded. We are grateful to them for so doing. The legislation[5]The relevant provision of the legislation, now relevant on appeal, is the Employment Rights Act 1996 Section 95(1)(c), which provides for constructive dismissal and says this: "95(1) For the purposes of this Part an employee is dismissed by his employer if (and, subject to subsection (2)…, only if)- (c) the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct.[6]The Employment Tribunal did not cite the section but it is not disputed that it gave itself the correct direction at paragraph 49 of its Judgment. Significantly, however, it did not cite on London Borough of Waltham Forest v Omilaju [2004] EWCA Civ 1493 , to which we will return. The facts[7]The Claimant was born in 1959 and began working for a Practice of General Practitioners in Braintree, Essex on 8 December 1997. Her employment ended on 29 November 2004 when she resigned. She was a receptionist. Our further account of the facts bears in mind that there are matters of a sensitive nature which are not necessary for an understanding of the Judgment in this case, relating as they do to the disability claim and to certain aspects of her dismissal claim.[8]In the early part of June 2004 certain comments were made in the Claimant's presence and the Respondent was also involved. The Claimant decided that she would see the Respondent Dr Gibson and certain things were said. On that day the Claimant said that she was resigning. On 4 June 2004 Ms Howard, who also worked at the Practice as Practice Manager, wrote to the Claimant declining to accept her resignation and giving her an opportunity to reconsider. On 28 June 2004 the Claimant withdrew her resignation and the Tribunal found that, in-so-doing, she had affirmed the contract thus whatever occurred in early June was water under the bridge and there has been no appeal against the finding of affirmation.[9]In due course the Claimant's grievance was considered and on 29 October 2004 the Respondent wrote, setting out what he described as some of his conclusions: This is an important document and we will cite it in full:
"Dear Susan, I am writing to give you some of my conclusions from our meeting and our meetings with people involved in your grievance. Firstly, I will deal with the difficulties you had with Hayley — my understanding of the situation was that there was a light hearted conversation going on around the reception area with Lesley Morton and Dr. Rashid, and Jess at that time was in the dispensary, and Hayley was also in reception. I think you were all agreed more or less on the general drift of the conversation, when you remarked that you had made a mistake on "falling for this man"
. Hayley apparently then commented on this and I think both of you are broadly agreed on the context of the wording but I think the difficulty arises in that Hayley was not meaning it in any vindictive sense, but you felt that it was. I note that you have had no previous difficulties with Hayley and there is no other record of any arguments or particular disagreements between you, or that Hayley has made any derogatory comments in the past. I suspect in this instance that Hayley did not realise quite how sensitive an issue it was for you and my understanding of the situation is that she had not meant it in any abusive or derogatory sense and I understand from Hayley that she did try to apologise at the time but you were too angry to accept it. I feel that this particular instance has been one of misunderstanding on your side and possibly some degree on Hayley's side, not realising quite how sensitive an issue it was for you. With your grievance with Alison, one of your complaints was the lack of confidentiality while we were discussing your problems in her office. We are all agreed that this was the situation and the door should have been shut. It is agreed this was an oversight and obviously all care will be taken that no-one is standing in the corridor outside in the future and the door is shut. Your complaint that you felt Alison's attitude was inappropriate towards you and non supportive – Alison feels that you have, in fact, had quite a lot of support over the years with discussions over cups of tea, tissues and also some help with the housing payments when the council are been difficult On your complaint with regard to the difficulty with Heather moving notes inappropriately from your desk, in fact, Alison said she did discuss it with Heather and Heather, at that time, did not know there was a problem, but Alison did, in fact, discuss it with her but did not come back to tell you she had discussed it with her. I can well understand you are upset after coming out of hospital to find that there was a notice about the disciplinary proceedings but I am assured that this, in fact, was sent before the particular situation that you were in (going into hospital) had arisen and was not sent after that occasion. In regard to your comments with the attitude to the doctors – that is under continual discussion and has been discussed further, hopefully with some positive results. Your question about what is happening to the hours – our intention is that nobody should lose any hours with the change in contract times that are now in place. In terms of your comments with Alison's attitude to you and telling you of disciplinary proceedings etc and the fact that you were in a low chair and she was in a high chair is, I agree, accurate but not intentional – I think these were chairs that were left here after the counsellors had had that room but the point is taken. I would hope that this gives us a further basis for discussion next week and at the moment we have agreed to meet at 2:00pm on Wednesday 3 rd November."[10]Shortly after this on 15 November 2004 the Claimant confirmed she was going to an Employment Tribunal the day after the meeting originally scheduled took place, that is 16 November 2004 between the Claimant and Doctors Gibson and Jessa of the Respondent Practice. On 29 November she resigned.[11]The Tribunal, having directed itself in accordance with the last straw doctrine, to which we will refer in greater detail, found this:
"52. With the case of Lewis v Motorworld in mind the two members consider that the letter of 29 October 2004 which began "
I am writing to give you some of my conclusions from our meeting and our meetings with people involved in your grievance" was an unsatisfactory way of dealing with the Claimant's grievance. The members are of the view that the unsatisfactory letter giving "some of my conclusions" was an act they may take into account and was an act in a series of acts whose cumulative effect amounted to a breach of trust and confidence. The members are of the view that the letter of 29 October 2004 contributed to the breach of the implied term of trust and confidence so as to create a continuing breach which continued after the affirmation of the contract of employment. 53. The Chairman takes a different view of the letter of 29 October 2004. He considers it to be a satisfactory conclusion to the grievance complaints. It might not be what the Claimant wanted but that is a different matter. In the Chairman's judgment the letter of 29 October 2004 was an innocuous act on the part of the employer. In the Chairman's judgment such an innocuous act cannot be a "final straw" even if the employee genuinely, but mistakenly, interprets that letter as hurtful and destructive of his or her trust in the employer. 54. The majority decision of the Tribunal is that the Claimant was constructively dismissed. Despite the fact that the employer has not expressly dismissed the employee, the employer must still show the reason for the dismissal. In this situation the reason for the dismissal is the reason for which the employer breached the contract of employment ( Berriman v Delabole Slate Limited [1985] ICR 546). In this case it was the conduct of the Claimant on 1 June. In the circumstances set out above that dismissal was unfair."[12]Those conclusions indicate the division between the Chairman and the members on this issue and the direction which it gave itself, that is the direction of all three of the members. The Chairman and members, as we have indicated, were asked to deal with issues which arose in the letters of appeal where this is said: 3. Further or alternatively, in finding that the Claimant was unfairly dismissed on the basis that the letter was a "final straw" the Tribunal acted unfairly and/or followed an improper procedure because the Respondent was not given a proper opportunity to be heard on this point. In particular:a. In her pleaded case the Claimant relied on the letter solely in support of her claim that the Respondent breached its contract in failing to reasonably and promptly afford a reasonable opportunity to Claimant to obtain redress of any grievance;b. The Claimant did not plead the letter, or indeed any events after the 3 June 2004 in support of its claim that the Claimant breached the implied term of trust and confidence;c. There was no application at the hearing or otherwise to amend the Claimant's pleaded case to include an allegation that the letter amounted to a "final straw".d. Before the Tribunal and during closing submissions the Appellant did not understand it to be argued that the letter was the "final straw";e. The Chairman indicated that he and the members were troubled by the Appellant's actions on 3 June 2004. In this regard the Appellant relied on the Claimant's affirmation of her contract by letter dated 28 June 2004. However, the Tribunal did not ask to be addressed by the Appellant on whether the Letter might be regarded as a 'final straw";f. In failing to ask the Appellant to comment on this matter—and then proceeding to found its decision on its own interpretation of the letter the Tribunal acted unfairly. Further or alternatively its conduct amounted to procedural impropriety.[13]In response additional allowances were given which included, as important to our part of the appeal, the following:
"20. It is clear from my notes that I was under the impression that it was open to the Tribunal to find that the letter of 29 October was the last- straw in the chain of events. The reason I did not find it to be so was because I considered the letter as a whole to be an innocuous act. Though not expressed in my written decision it seems, from the notes, that one of the matters making it an innocuous act was the suggestion that the letter contained only some of the conclusions and it might provide the basis for further discussion. 21. If the majority decision of the members is wrongly based on a belief that they were entitled to consider the letter of 29 October as a last straw, this would clearly be my fault in not telling them that that conclusion was not open to them on the pleadings and the evidence and submissions. That was not my view at the time. It is a matter now for the Employment Appeal Tribunal to decide."
The Respondent's case[14]The Respondent submitted that the Employment Tribunal had erred in that procedural irregularity and also in developing the last straw doctrine which was not properly applicable in this case. Further it was contended that, whatever may have been said about the letter of 29 October, the letter read as a whole is indeed and innocuous act for the following reasons:
"a. The letter addressed each of the grievances that had been raised by the Claimant both (i) in her written grievances of 20 September 2004 concerning the conduct of Hayley Goldthorpe and Alison Howett of the Respondent and (ii) in her grievance meeting on 12 October 2004; b. The letter gave both reasoned and reasonable responses to those grievances; c. At the end of the letter, Dr Gibson, the senior partner of the Appellant, stated: "
I would hope that this gives us a further basis for discussion..." Accordingly, in so far as the letter failed to address particular concerns either adequately or at all, it was clear that the letter was not a final determination of the Claimant's grievance; and d. The Tribunal failed to give any reasons as to why the majority regarded the letter as unsatisfactory."[15]It was contended that the proper approach to this case was to view the act as a single act consisting of the letter being given to the Claimant and to evaluate as a matter of construction whether it did evince an intention by the Respondent no longer to be bound by the essential terms of the contract. The Claimant's case[16]On behalf of the Claimant it was accepted that she had affirmed the contract and in her original submissions Ms Harrison contended that the Claimant had kept alive some of the pre 29 June matters. As to the letter itself she did not dispute the approach of Mr Sonaike which is to look at this as a one off construction. It is clear from the submissions which were helpfully made by Ms Harrison that the Claimant was herself extremely concerned about the impact on her of the way in which the Respondent conducted its response to her grievance. She was entitled to raise a list of matters about which she contended she was badly treated. She relied upon the letter. She left promptly after the letter and by reason of it which are, although not explicit findings, implicit in the Tribunal majority's judgment. She contended that the letter was unsatisfactorily because it failed to deal with some of the issues raised by the Claimant through her grievance and that the Respondent, Dr Gibson, was seeking to sweep matters under the carpet and preferred to take the accounts of others rather than of the Claimant. The legal principles[17]The legal principles to be applied in this case are most conveniently summarised with respect by the Court of Appeal in Omilaju . As we have said this was not before the Employment Tribunal but in the comments of the Chairman it is plain that is was in his mind and some of the words used in the Judgment, such as innocuous, are traceable to Omilaju . In Omilaju Dyson LJ, giving the Judgment with which Wall LJ and May LJ agreed, set out the principles for determining constructive dismissal issues: 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: Western Excavating (ECC) Ltd v Sharp [1978] 1 QB 761 . 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 [1998] AC 20 , 34H-35D (Lord Nicholls) and 45C-46E (Lord Steyn). 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, per Browne-Wilkinson J in Woods v WM Car Services (Peterborough) Ltd [1981] ICR 666, 672A. The very essence of the breach of the implied term is that it is calculated or likely to destroy or seriously damage the relationship (emphasis added). 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 at page 35C, 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" (emphasis added). 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. It is well put at para [480] in Harvey on Industrial Relations and Employment Law:
"[480] Many of the constructive dismissal cases which arise from the undermining of trust and confidence will involve the employee leaving in response to a course of conduct carried on over a period of time. The particular incident which causes the employee to leave may in itself be insufficient to justify his taking that action, but when viewed against a background of such incidents it may be considered sufficient by the courts to warrant their treating the resignation as a constructive dismissal. It may be the 'last straw' which causes the employee to terminate a deteriorating relationship." 15. The last straw principle has been explained in a number of cases, perhaps most clear1y in Lewis v Motorworld Garages Ltd [1986] ICR 157. Neill LJ said (p 167C) that the repudiatory conduct may consist of a series of acts or incidents, some of them perhaps quite trivial, which cumulatively amount to a repudiatory breach of the implied term of trust and confidence. Glidewell LJ said at p 169F: "(3) The breach of this implied obligation of trust and confidence may consist of a series of actions on the part of the employer which cumulatively amount to a breach of the term, though each individual incident may not do so. In particular in such a case the last action of the employer which leads to the employee leaving need not itself be a breach of contract; the question is, does the cumulative series of acts taken together amount to a breach of the implied term? (See Woods v W. M. Car Services (Peterborough) Ltd [1981] ICR 666.) This is the "last straw" situation." 16. Although the final straw may be relatively insignificant, it must not be utterly trivial: the principle that the law is not concerned with very small things (more elegantly expressed in the maxim "de minimis non curat lex") is of general application. 17. It is the alleged failure by the ET in the present case to apply the judgment of Glidewell LJ which led the EAT to allow the appeal. It is submitted by Mr Weiniger on behalf of the Council that although, as Glidewell LJ makes clear, the final straw does not need to be a breach of contract, it must at least be conduct which is "blameworthy or unreasonable"
. Anything less than a breach of contract or conduct which is blameworthy or unreasonable is not capable of being a final straw in the sense discussed by Glidewell LJ. 18. On behalf of Mr Omilaju, Mr Edward submits that (i) the final straw does not need to be a breach of contract (see Lewis ), (ii) blameworthy or unreasonable conduct in a final straw case must by definition be, or at least contribute to, a breach of the implied term of trust and confidence, but (iii) since the breach of this implied term is, by definition, also a breach of contract, it cannot be a requirement that a final straw should amount to blameworthy or unreasonable conduct, since Lewis says that it does not need to be a breach of contract. 19. The question specifically raised by this appeal is: what is the necessary quality of a final straw if it is to be successfully relied on by the employee as a repudiation of the contract? When Glidewell LJ said that it need not itself be a breach of contract, he must have had in mind, amongst others, the kind of case mentioned in Woods at p 671F-G where Browne-Wilkinson J referred to the employer who, stopping short of a breach of contract, "squeezes out" an employee by making the employee's life so uncomfortable that he resigns. A final straw, not itself a breach of contract, may result in a breach of the implied term of trust and confidence. The quality that the final straw must have is that it should be an act in a series whose cumulative effect is to amount to a breach of the implied term. I do not use the phrase "an act in a series" in a precise or technical sense. The act does not have to be of the same character as the earlier acts. Its essential quality is that, when taken in conjunction with the earlier acts on which the employee relies, it amounts to a breach of the implied term of trust and confidence. It must contribute something to that breach, although what it adds may be relatively insignificant. 20. I see no need to characterise the final straw as "unreasonable" or "blameworthy" conduct. It may be true that an act which is the last in a series of acts which, taken together, amounts to a breach of the implied term of trust and confidence will usually be unreasonable and, perhaps, even blameworthy. But, viewed in isolation, the final straw may not always be unreasonable, still less blameworthy. Nor do I see any reason why it should be. The only question is whether the final straw is the last in a series of acts or incidents which cumulatively amount to a repudiation of the contract by the employer. The last straw must contribute, however slightly, to the breach of the implied term of trust and confidence. Some unreasonable behaviour may be so unrelated to the obligation of trust and confidence that it lacks the essential quality to which I have referred. 21. If the final straw is not capable of contributing to a series of earlier acts which cumulatively amount to a breach of the implied term of trust and confidence, there is no need to examine the earlier history to see whether the alleged final straw does in fact have that effect. Suppose that an employer has committed a series of acts which amount to a breach of the implied term of trust and confidence, but the employee does not resign his employment. Instead, he soldiers on and affirms the contract. He cannot subsequently rely on these acts to justify a constructive dismissal unless he can point to a later act which enables him to do so. If the later act on which he seeks to rely is entirely innocuous, it is not necessary to examine the earlier conduct in order to determine that the later act does not permit the employee to invoke the final straw principle. 22. Moreover, an entirely innocuous act on the part of the employer cannot be a final straw, even if the employee genuinely, but mistakenly, interprets the act as hurtful and destructive of his trust and confidence in his employer. The test of whether the employee's trust and confidence has been undermined is objective (see the fourth proposition in para 14 above).[18]As to the way in which a Tribunal must conduct itself, it must of course provide a fair hearing and give opportunities for points which are raised properly in the case statements to be aired. It must not decide issues which are not in dispute between the parties, see Chapman v Simon [1994] IRLR 124 . If on appeal a point of law is identified and an error is found it must be set aside unless the Judgment is otherwise unarguably right. If, on a point of pure construction, the EAT is in as good a position to decide on a document's meaning, it is unnecessary for the matter to be remitted to the Employment Tribunal and the EAT should itself decide it by substituting its own judgment. Conclusions[19]We prefer the arguments of the Respondent and have decided to allow the appeal. First this is not a last straw case. The difficultly in using metaphors, as Lord Hoffmann warned recently in Lawson v Serco [2002], there is a great danger in spending too long on a metaphor and it is open to confusion. The last straw indicates that a very substantial weight be placed upon the back of a camel which it will bear with fortitude. But there comes a stage when any addition to the load will cause the camel's back to be broken, even if the addition is of something as mere as a straw. That is the language that is used throughout the cases Lewis v Motorworld and Omilaju . What is plain is that for this doctrine to be engaged there must be more than one event. True it is that none of them needs to be serious and none of them needs to be a breach of contract, providing cumulatively they amount to a fundamental breach.[20]In this case a line was drawn under the events of June by the Claimant's affirmation of her contract and so none of the events, including a disputed matter of 4 June which occurred before her affirmation, can contribute to the load placed upon the camel's back. Truly this case is not one of a series of events but of a single event once it is recognised that all is in is issue is the 29 October 2004 letter.[21]In our judgment therefore the Tribunal was wrong to approach the case as being soluble by reference to the last straw doctrine. We agree with the Chairman, who of course was in the minority, that there may have been an error in not directing the members as to what was available to them even if it were dealing with the last straw doctrine. It appears to us from the passages we have cited above, from paragraphs 20 and 21 of his letter, that all three of the Tribunal members were operating wrongly we hold on the basis that it was open to them to apply the last straw doctrine. It simply was not a case as a matter of fact where that was available and it was not available as a matter of statements of case, since we accept that the matter was not fully available to it and the arguments presented by Mr Sonaike, which we have summarised above, are in our view correct. Thus there is an error of law in the misdirection and what the Tribunal should have done is to say what was it which caused the Claimant to leave and was it such as to be a fundamental breach.[22]We accept the submission that the sole material was the letter and that our duty is to construe this letter objectively according to the standards set out by Dyson LJ in Omilaju . We accept of course that the impact on the Claimant of this letter is very different from what may be perceived objectively and she no doubt felt very strongly about it, but that is not the test. Since then we are engaged in a matter of construction of a document. This is a question of law. As we read the document there is nothing which indicates a failure by the Respondent to carry out the terms of the contract.[23]On the contrary, this indicates conciliation and an acceptance by the Respondent that it will further engage with the Claimant in trying to resolve the issues between the actors in this drama and to do so in accordance with the contractual framework. There is nothing in this document which indicates that the Respondent intends to tear up the contract. Indeed we agree with the Chairman when he indicated about the first sentence relating to some of my conclusions that the matter was still open to Dr Gibson to consider the matter afresh since his conclusions had not been reached. A meeting was scheduled and indeed it was held in due course. We accept the Respondent's submissions that this letter does not indicate even a breach of any term of the employment relationship, let alone a fundamental breach. And so we uphold the Respondent's case that this was not capable of being a termination. That makes it unnecessary for us to decide any subsidiary issues under the doctrine in Western Excavating (ECC) Ltd v Sharp [1978] ICR 221 / [1978] IRLR 27 , that is causation and promptness.[24]We will however assume in the Claimant's favour that the Employment Tribunal's majority did uphold her on both these points. We have not heard argument from Mr Sonaike for we did not detect that this point was open to him in the notice of appeal but as we say, since the Tribunal has misdirected itself on the first question to be addressed under Western Excavating , it is unnecessary for us to deal with either the substance or the procedure for the raising of those two subsidiary issues. For those reasons therefore this Judgment will be set aside and there will be substituted a finding that the Respondent did not dismiss the Claimant. It follows that the award remedy will be set aside too. I would very much like to thank Mr Sonaike and Ms Harrison for their very concise submissions which have helped us through this decision and again to the Chairman and members for their comments.