Employment Cases Update

Fayusi v Compass Contract Services (UK) Ltd UKEAT/0194/10/MW

Date published: 24/09/2010

Appeal against the Tribunal’s ruling that the claimant had not been unfairly constructively dismissed. Appeal succeeded.

The claimant’s first ET1 complained about, amongst other things, unpaid/underpaid wages. A second ET1 was lodged following his resignation, where he complained of unfair constructive dismissal, victimisation and breach of contract. The Tribunal ruled on some, but not all, aspects of the unpaid/underpaid wages claim and one claim was upheld as a breach of contract. As to the issue of constructive dismissal, the Tribunal concluded that there was no breach of the implied term of mutual trust and confidence, saying that the claimant did not resign immediately following the failure of the respondent to pay the amount he thought was owed. Instead he had continued to work, signing a petition protesting about the respondent’s actions, thus affirming the contract of employment.

At the EAT it was argued that the failure of the Tribunal to address two of the pay allegations meant that they did not expressly find that there was a repudiatory breach of contract on behalf of the employer.  However, by considering the question of affirmation of the contract, they must have found that there was a repudiatory breach. Finally, it was argued, the Tribunal wholly misdirected themselves in finding that, in signing the petition, the claimant had affirmed the contract in addition to continuing to work for the respondent. The EAT agreed with these submissions although was not persuaded that the result was inevitably that the finding must be reversed. They remitted the case back to the same Tribunal and listed specific questions that the Tribunal should consider.

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Appeal No. UKEAT/0194/10/MW

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 26 August 2010

Before

HIS HONOUR JUDGE PETER CLARK

MRS C BAELZ

MR R LYONS

MR J FASUYI (APPELLANT)

COMPASS CONTRACT SERVICES (UK) LTD (RESPONDENT)

Transcript of Proceedings

JUDGMENT

APPEARANCES

For the Appellant MR JAMES MEDHURST (Representative)

For the Respondent MR MICHAEL CREAMORE (Solicitor)
Messrs Gregsons Solicitors
St Christopher's House
Tabor Grove
Wimbledon
London
SW19 4EX

SUMMARY

UNFAIR DISMISSAL – Constructive dismissal

Employment Tribunal found one failure to pay wages but failed to make necessary findings on two further wages claims.

Employment Tribunal ought to have resolved those questions in order to determine whether Respondent's failure to pay contractual wages amounted to a repudiatory breach of contract.

Further, Employment Tribunal regarded the raising of a grievance (by way of a petition by staff signed by, among others, the Claimant) as affirming the contract whereas the opposite is the case.

In these circumstances, the Claimant's appeal was allowed and the case remitted to the same Employment Tribunal for reconsideration of the question of constructive dismissal.

HIS HONOUR JUDGE PETER CLARK

1. The parties in this matter, which has been proceeding in the London (South) Employment Tribunal, are Mr Fasuyi, Claimant, and Compass Contract Services (UK) Ltd, Respondent. We have before us for an all parties full hearing an appeal by the Claimant against so much of a judgment, promulgated with reasons on 28 September 2009 and reached by a Tribunal chaired by Employment Judge Houghton, sitting with Mr J R Callingham and Mrs F McGarry, as dismissed his complaint of unfair dismissal against the Respondent.

2. There is no appeal against the Tribunal's decision to dismiss his further complaints of direct sex and race discrimination and victimisation, nor any cross#appeal by the Respondent against a finding that his complaint of breach of contract succeeded.

Background

3. The Claimant was employed under a zero hours contract, that is he was not guaranteed any minimum working hours each week by the Respondent, which provided hospitality services at the O2 Arena, Greenwich. That employment commenced on 1 January 2008 and ended with his resignation on 25 January 2009. By his first form ET1 lodged at the Tribunal on 25 October 2008 he complained, among other things, that he had not been paid wages for 23 July 2008 (£53.62), and had been underpaid for a period of suspension on pay between 4 August 2008 and 25 September 2008 (£352.50). He also there raised complaints of sex and race discrimination.

4. By a second form ET1 lodged after his resignation on 3 March 2009 he complained of constructive unfair dismissal and victimisation, together with complaints of unlawful deduction/breach of contract post-termination in respect of the payment of wages on 26 December 2008. He received pay for that day at 1.5 times his hourly rate; he claimed double time. He also raised a complaint in respect of holiday pay. His pleaded case of constructive dismissal included a failure to pay for 23 July 2008 and the suspension wages claimed.

5. The Houghton Tribunal noted, at paragraph 2 of their reasons: "The outstanding money claims in respect of the Boxing Day double time and the suspension pay." There is no mention there of the 23 July 2008 wages claim. In the event no ruling was given on the 23 July 2008 and suspension wages claims. The Boxing Day claim was upheld as a breach of contract (reasons paragraph 48).

6. As to the issue of constructive dismissal, the Tribunal found there was no breach of the implied term of mutual trust and confidence. However, at paragraph 52 they said this:

"The Tribunal has found that the Respondent did place itself in breach of contract by failing to honour Mr Waters' promise that work on 26 December 2008 would be remunerated at double time. The Claimant did not, however, resign immediately in response to that but instead, subscribed his name to a petition protesting the Respondent's actions. By so doing and by continuing to work the Tribunal considers that the Claimant affirmed the contract of employment, although he is entitled to bring, as he has duly done, a claim for damages in these proceedings."

Discussion

7. In advancing the appeal, Mr Medhurst focuses on the alleged breach of the Respondent's obligation to pay wages under the contract. He submits (1) that the Tribunal failed to rule on the 23 July 2008 and suspension pay allegations, both of which form part of the Claimant's case on constructive dismissal (such rulings were necessary in the determination of the constructive dismissal issue); (2) having found a breach in relation to the Boxing Day claim, although no express finding is made that such a breach was repudiatory, it is implicit that the Tribunal did so find because they went on to consider the question of affirmation of the contract by the Claimant in paragraph 52; (3) as to their finding on affirmation, the Tribunal wholly misdirected themselves in the finding at paragraph 52 that in signing the petition the Claimant affirmed the contract in addition to his continuing to work for the Respondent thereafter until his resignation.

8. To put that in context, the Claimant was one of a number of signatories to a petition prepared by their staff representative asking management to reconsider and pay double time for Boxing Day. Far from affirming the contract that, submits Mr Medhurst, amounted to a collective grievance about an underpayment of wages; that is not an affirmation of the contract (see Da'bell v NSPCC [2010] IRLR 19 paragraph 32 per HHJ McMullen QC). He invited us to hold that a deliberate non#payment of wages as in this case amounts to a repudiatory breach which it is open to the employee to accept by resignation in circumstances amounting to a constructive dismissal.

9. There is no room for the de minimis principle (see Cantor Fitzgerald International v Callaghan and Ors [1999] IRLR 234 paragraph 43 per Judge LJ). Further, simply continuing to work for a short period under protest before resigning does not waive the breach (see WE Cox Toner International Ltd v Crook [1981] IRLR 443 paragraph 15 per Browne#Wilkinson P). Accordingly, he submits that the appeal should succeed and we should substitute a finding of constructive dismissal and remit the case for remedy to be determined, no potentially fair reason for dismissal being advanced by the Respondent.

10. In response, Mr Creamore objects to the focus of the constructive dismissal case shifting on appeal from the last straw argument based on the implied term of mutual trust and confidence, which was roundly rejected by the Tribunal, to reliance on the modest money claim in respect of Boxing Day 2008 wages. He acknowledges that the Tribunal did not determine factually the claims arising from 23 July 2008 and the period of suspension. He points to the PHR order of Employment Judge Freer following the hearing on 16 February 2010 which ruled that the Tribunal had no jurisdiction to entertain those two claims. However, that related to the original wages claims in the first form ET1. Judge Freer anticipated that they would be raised as post termination breach of contract claims in the forthcoming second ET1.

11. In any event, whatever their status as freestanding claims, they were plainly relevant to the constructive dismissal issue. Further, Mr Creamore accepts that in signing the petition the Claimant was not affirming the contract as the Tribunal found at paragraph 52. However, he submits that that does not vitiate the Tribunal's finding of affirmation based on the Claimant continuing to work for the Respondent in the context of his contract of employment. He submits that the Tribunal's conclusion, paragraph 53, that the Respondent's conduct did not amount to a breach of any express or implied term of the contract is unimpeachable and that the appeal must fail.

Disposal

12. We accept Mr Medhurst's three submissions insofar as they undermine the basis of the Tribunal's finding of no constructive dismissal. However, we are not persuaded that the result is inevitably that that finding must be reversed. We agree with Mr Creamore's submission that if the appeal succeeds then the matter should be returned to the same Tribunal chaired by Employment Judge Houghton (see the observations of Burton P in Sinclair Roche & Temperley v Heard [2004] IRLR 763 paragraph 46) for reconsideration of the issue of constructive dismissal.

13. We shall allow the appeal and remit the matter to the same Tribunal for reconsideration of the issue of constructive dismissal by reference to the following specific questions: (1) Was the Respondent in breach of contract in respect of the payment of wages for (a) 23 July 2008 and/or (b) pay during the suspension period in August/September 2008? (2) Depending on the answer to the first question, did the breach or breaches of contract as to wages, including the Boxing Day 2008 breach as found, amount to a repudiatory breach of the contract of employment? (3) If so, did the Claimant affirm the contract by continuing to attend for work during January 2009? (4) If not, was the repudiatory breach an effective cause of the resignation?

14. Those questions should be answered by reference to the guidance to which we have earlier referred. No further evidence will be necessary. The matter can be dealt with on remission on oral submissions on behalf of the parties. The answers to those questions will inform the answer to the ultimate question: Was the Claimant constructively dismissed? If so, that dismissal was unfair in the absence of any potentially fair reason being advanced by the Respondent. The question then will be one of remedy.