Employment Cases Update

Logan v Celyn House Ltd UKEAT/0069/12/JOJ

Date published: 03/09/2012

Appeal against a finding that the claimant had not been constructively unfairly dismissed. Appeal allowed and a finding of constructive dismissal was substituted.

The claimant raised several grievances with her employer including one which complained of overbearing actions of a colleague and another that she had not been paid her contractual sick pay when she was off sick. All her grievances were dismissed and so was her appeal against the decisions. She then resigned, saying in her letter of resignation ‘The manner, in which you have rejected each and every single point of my grievances, while choosing to ignore vital evidence I submitted, has placed me in the impossible and intolerable situation where I just cannot return to work for your company’. She claimed constructive unfair dismissal which was rejected by the ET. They agreed that the non-payment of the contractual sick pay   was a repudiatory breach of her contract of employment. However they ruled that the principal reason for the claimant’s resignation was her erroneous perception of how she was being treated by her colleague and how her complaint had been dealt with, not the non-payment of sick pay. The claimant appealed.

The EAT allowed the appeal. Applying the Meikle case the ET were wrong to look for the ‘principal reason’ for the resignation. There were sufficiently clear findings of fact in the remainder of the judgement for the EAT to find that a reason for the resignation was the sick pay matter and to substitute a finding of unfair constructive dismissal.

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Appeal No. UKEAT/0069/12/JOJ

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX

At the Tribunal

On 19 July 2012

Before

HIS HONOUR JUDGE SHANKS

MR M CLANCY

MR P GAMMON MBE

MRS S LOGAN (APPELLANT)

CELYN HOUSE LTD (RESPONDENT)

Transcript of Proceedings

JUDGMENT

APPEARANCES

For the Appellant
MR ANDREW WATSON (Representative)
Free Representation Unit
Ground Floor
60 Grays Inn Road
London
WC1X 8LU

For the Respondent
MS LAUREN LANSON (of Counsel)
Instructed by:
Citation Plc
Tribunals Department
Citation House
1 Macclesfield Road
Wilmslow
SK9 1BZ

SUMMARY

UNFAIR DISMISSAL – Constructive dismissal

The Claimant resigned in response to a grievance decision which she found unsatisfactory. The grievance had involved a number of matters, including alleged bullying (which the Employment Tribunal found was a figment of her imagination) and a failure to pay contractual sick pay (which the Employment Tribunal had found was a repudiatory breach of contract). The Employment Tribunal found that the principal reason for the resignation was the alleged bullying and not the sick pay matter and rejected a claim of constructive dismissal.

The appeal succeeded: applying the Meikle case [2005] ICR 1 it was clear that the Employment Tribunal had been wrong to look for the "principal reason".

There were sufficiently clear findings of fact in the remainder of the judgement for the EAT to find that a reason for the resignation was the sick pay matter and to substitute a finding of unfair constructive dismissal.

HIS HONOUR JUDGE SHANKS:

Introduction

1. This is an appeal by the Claimant against the dismissal of her claim for unfair constructive dismissal. It was allowed to proceed on one ground only by HHJ Peter Clark by an order made on 1 February 2012.

Background

2. The Claimant was employed as a veterinary nurse by the Respondent company from 1 September 2008. Part of her contractual terms in that capacity are recited by the Employment Tribunal in their Judgment at paragraph 40: she was entitled to four weeks sick pay paid at normal basic pay.

3. A dispute arose over rotas in 2010 and on 26 May 2010 the Claimant was called to a disciplinary hearing that was to take place on 2 June 2010. She wrote in on 2 June saying that she had become ill. On 7 June 2010 she wrote again to the Respondent to say that she was certified as being entitled to sick leave. She remained off work through sickness until her contact came to an end in circumstances that I will describe in a moment.

4. On 1 July 2010 she wrote to the Respondent about her salary for the month of June. She wrote:

"I have been advised to point out that you are acting contrary to your own procedure in the Employee Handbook at Section 4-2 which states as follows:

'Contractual sick pay

The Practice has a contractual sick pay scheme, which is paid in tandem with SSP on condition that the sick pay rules contained in this handbook are complied with. The scheme provides for the payment of up to four weeks basic pay and four weeks half pay, inclusive of SSP, in any rolling 12-month period.

If the above entitlement is exhausted, you will revert to SSP only'

This major and unexpected shortfall in my June salary of £872.00 has had a serious effect on my family and added to the stress that I'm already under. The Doctor has just signed me off for a further two weeks….

Perhaps you can explain why there is a conflict between the salary I have been paid and what your handbook states."

The Respondent replied the same day and stated:

"In answer to your queries the salary you have been paid is Statutory Sick Pay for the period of time you have been off sick"

That was the Respondent's position. The Employment Tribunal found, and it is not challenged, that the Respondent was wrong about the sick pay issue and that the Claimant was indeed entitled to be paid full salary for a period of four weeks, which would have begun at the beginning of June and carried on through June.

5. On 5 July, the Claimant wrote again to the directors of the Respondent in these terms:

"I write in relation to the exchange of correspondence between myself and Mrs Roberts regarding a huge deficit of £872.00 which the company has withheld from my salary.

Having taking advice in this very worrying situation, I now demand that you pay this outstanding sum without further delay.

If I do not hear from you by Thursday, 8th July, …….then I shall take whatever legal action is necessary to recover my money."

There was a grievance process already in train and in the course of which the Claimant had raised a large number of grievances, in particular against Mrs Roberts, whose name we have just mentioned in another context. Added to a list of 11 grievances was one further one, number 12, which related to the sick pay issue which we have described. The grievances were heard on 5 July 2010 and the Tribunal reproduced notes which had been taken of that hearing by the Claimant at paragraph 44 of their Judgment which were accepted as an accurate reflection of the hearing.

6. Grievance number 12 is set out at page 14 of the Employment Tribunal Judgment; it was in similar terms to the letters quoted above. The Claimant said:

"There's an unjustified deficit of £872.00 in my June salary. […] This is completely contrary to my contract of employment and the Employee Handbook and therefore illegal."

And then under the heading, "Do You Want to Know What I Want from this Grievance?" she asked for a full written apology on letter-headed paper from Mrs Roberts and all references to a disciplinary matter, which we have not referred to, being removed from her personnel records and then:

"I also require immediate payment of the four weeks full salary before I take the matter further."

7. The Respondent sent a decision letter in relation to the grievance on 19 July 2010 basically rejecting the entire grievance. The Claimant appealed against that. There was an appeal hearing fairly promptly and the decision on the appeal was sent to her on 6 September 2010. We have not seen that letter following the grievance appeal but it is perfectly apparent that the appeal was rejected.

8. The Tribunal found at paragraph 51 of their Judgment that the letter rejecting the appeal "resulted" (and I emphasise that word used by the Tribunal) in the Claimant's resignation on 13 September 2010. The Tribunal recited the terms of her letter of resignation of that date:

"I am writing in response to your letter of the 6th September 2010, informing me of your decision regarding my grievance procedure appeal. The manner, in which you have rejected each and every single point of my grievances, while choosing to ignore vital evidence I submitted, has placed me in the impossible and intolerable situation where I just cannot return to work for your company.

Your very selective, frequently inaccurate and distorted reasoning shows an unjustified and quite sickening bias in trying to support the overbearing actions of Mrs Roberts in the entirely unreasonable way she has treated me, which now makes my position completely untenable. Indeed, the whole unpleasant experience has been traumatic and had a profoundly damaging effect both on me and my family.

However, I do understand that your decision is final. Given all the circumstances, it is with a great deal of hurt and sadness that I am left with no alternative but to resign from my position as qualified Veterinary Nurse with your Company."

The Claimant therefore resigned; she claims that she was constructively dismissed.

9. There was a clear and unchallenged finding by the Employment Tribunal that the Respondent's failure to pay sick pay for June was a repudiatory breach of the contract of employment and that is contained at paragraph 62 of the Judgment where the Tribunal said:

"The Tribunal are in no doubt that the Respondent was obliged to pay the Claimant contractual sick pay in accordance with the principles set out in the employee handbook."

And then they went on to say:

"Had the Claimant resigned on or shortly after 1 July, then in the Tribunal's view that would have been both a constructive dismissal and unfair."

It is clear from that that there was a finding both of a breach and that it was repudiatory breach.

10. Notwithstanding that finding, they did not find that she had been constructively dismissed and the reason for that appears in paragraph 63 of the Tribunal's Judgment where they said this:

"In the Tribunal's view the principle (sic) reason for the Claimant's resignation was her erroneous perception of how she was being treated by Mrs Roberts in general, as summarised by the Claimant at Page 115 in her letter of the 29th June when she accused Mrs Roberts of unacceptable conduct of bullying, harassment and discrimination… and also the Claimant's erroneous perception of how the Respondent's had dealt with her grievances. We are fully satisfied that the principle reason for the Claimant's resignation was not related either to the wording of the disciplinary letter nor to the non-payment of contractual sick pay, as evidenced by the fact that she did not resign at the time and took, as we say, nearly 4 months to resign after the disciplinary letter and over 2 months from the non-payment of the contractual sick pay."

So there was a finding at paragraph 63 that the principal reason for her resignation was not the non-payment of contractual sick pay and in those circumstances the Tribunal having found that the Claimant's complaints about Mrs Roberts and the grievances were erroneous they rejected her claim for constructive dismissal.

The appeal

11. On this appeal the Claimant says that the Tribunal approached the question in the wrong way and referred us to the case of Meikle v Nottinghamshire County Council [2005] ICR 1. The important passage is in the Judgment of Keene LJ at page 12:

"The proper approach, therefore, once a repudiation of the contract by the employer has been established, is to ask whether the employee has accepted that repudiation by treating the contract of employment as at an end. It must be in response to the repudiation but the fact that the employee also objected to the other actions or inactions of the employer, not amounting to a breach of contract, would not vitiate the acceptance of the repudiation. It follows that, in the present case, it was enough that the employee resigned in response, at least in part, to fundamental breaches of contract by the employer."

We were also referred to a case in the Employment Appeal Tribunal heard by a former President, Elias P, called Abbeycars (West Horndon) Ltd v Ford UKEAT/0472/07/DA where he referred to Meikle at paragraph 34 and he then said:

"On that analysis, it appears that the crucial question is whether the repudiatory breach played a part in the dismissal. There must be a causal connection between the repudiation and the resignation; if they are unconnected acts then the employee is not accepting the repudiatory breach.

35. It follows that once a repudiatory breach is established, if the employee leaves then even if he may have done so for a whole host of reasons, he can claim that he has been constructively dismissed if the repudiatory breach is one of the factors relied upon. We respectfully agree with this reasoning. We think it would be invidious for tribunals to have to speculate what would have occurred had the employee been faced with the more limited grounds of legitimate complaint than he had perceived to be the case.

36. Moreover, if there is a repudiatory breach which entitles the employee to leave and claim constructive dismissal, we see no justification for allowing the employer to avoid that consequence merely because the employee also relies on other, perhaps unjustified or unsubstantiated, reasons. The employee ought not to be in a worse position as a result of relying on additional, albeit misconceived, grounds.

37. Accordingly, although the Tribunal did not in this case specifically engage with the question of whether there was a causal link between the repudiatory breach and the dismissal, that was no doubt because in the circumstances of this case this appeared not be in dispute. It was never suggested that the employee did not resign because of the list of grievances that he set out in his letter. It follows from the reasoning in the Meikle case that if any of those matters constituted a repudiatory breach, the resignation would be enough to establish constructive dismissal."

12. Having regard to those two authorities, and there are others applying the same principle, it is clear to this Tribunal that when the Employment Tribunal asked itself what the principal reason for the resignation was, it asked itself the wrong question. It should have asked itself whether the breach of contract involved in failing to pay the sick pay was a reason for the resignation, not whether it was the principal reason.

Disposal

13. It follows from that that we must allow the appeal. The question now is what we should do about it: whether we remit the question back to the Tribunal or whether it is open to us to decide whether the Claimant was constructively dismissed or not.

14. We have been referred to the case of Hellyer Brothers Ltd v MacLeod [1987] ICR 526, and in particular to a quotation from another case Dobie v Burns International which appears at page 547 of the Hellyer case and that quotation from the Judgment of Waite J reads as follows:

"If we are satisfied that a conclusion reached as a result of a misdirection is plainly and unarguably wrong upon the facts found by the Industrial Tribunal and those facts do not require further application or reinvestigation, then we are entitled and bound to substitute our own conclusion as to what those findings require in law."

The Claimant invites us to follow that course and to substitute a finding of constructive dismissal.

15. We have therefore looked carefully at the Employment Tribunal's Judgment. We were referred to paragraph 62 which sets out some written submissions from the Claimant, in particular a submission that the failure or the refusal of the Respondent to pay contractual sick pay was not the core reason for her decision to resign from their employment, but that it was both a significant and contributory factor in the decision and a later submission that:

"The non-payment of wages whilst off sick was one of the reasons that led the Claimant to resign after exhausting all avenues available to her whilst still employed by the Respondent."

We do not consider those statements, although they are not contradicted or even commented on by the Employment Tribunal, to be a sufficient basis for us to make the finding that we are invited to make. They are not evidence, they are not adopted by the Tribunal and it seems to us that is not a proper basis for us to substitute a finding as we are asked to do.

16. However, we have recited the Tribunal's findings of fact earlier at some length. At para. 57 the Tribunal state as follows:

"What was the reason for the Claimant's resignation? This is succinctly set out in Mrs Logan's letter of resignation…"

In a nutshell the reason given for her resignation in the letter was that Mrs Logan was dissatisfied with the way in which all her grievances had been dealt with, such grievances being as set out at paragraphs 1-12 of the note that we have already quoted from, which of course include the sick pay grievance. It seems to us that that clear finding, combined with the background to which we have already referred, does provide a sufficiently clear factual basis for us to substitute for the Tribunal's decision a finding of constructive dismissal.

17. Ms Lanson argued that the Tribunal had found that the real reason for the resignation was the way that the Claimant had been treated by Mrs Roberts and her erroneous perception of how the grievance in relation to that had been dealt with. We have no doubt that that reason featured larger than the question of contractual sick pay, but the Employment Tribunal's finding that it was the principal reason is perfectly consistent with a finding that the sick pay issue was also a reason for the resignation.

18. The other point that Ms Lanson makes relates to paragraph 57 of the Tribunal's Judgment and the statement that the reason for the resignation was that the Claimant was dissatisfied with the way in which her grievances had been dealt with. It does not seem to us, giving a fair reading to those words, that we can confine what the Tribunal is saying just to the process by which the grievance was dealt with. It seems to us clear that they are referring to the whole of the grievance process including the substantive outcome and that is clear because in the next few words they refer expressly to grievance 12 which was:

"You have failed to pay me my contractual sick pay. You must now pay me that contractual sick pay"

We really cannot see how a complaint about the way that grievance was dealt with can mean anything other than a complaint that the sick pay was not paid and so we do not accept Ms Lanson's submissions on that paragraph.

Conclusion

19. Putting together paragraph 57 with the background that we have outlined, it seems to us we can substitute a finding that there was a constructive dismissal. There was no issue that if there was a constructive dismissal it was unfair. It may well be open to the Respondent at the remedies stage to maintain that the Claimant would have resigned regardless of the sick pay issue and consequently suffered no loss but that will be a matter to be resolved by the Employment Tribunal.

20. We should mention that for reasons that were entirely understandable and clearly right, Ms Lanson did not at the hearing seek to argue any affirmation point in the event that she was unsuccessful on the main point of the appeal.