Nelson v. Kingston Cables Distributors Ltd [2000] UKEAT 662_99_0205 (2 May 2000)

JUDGMENT Revised © Copyright 2000 APPEARANCES For the Appellant MS HELEN GOWER (of Counsel) Instructed By: Mr A Potts Messrs Gosschalks Solicitors Queens Gardens Kingston Upon Hull HU1 3DZ For the Respondents MR DAVID CHRISTIE (of Counsel) Instructed By: Mrs F Richardson Messrs Wallace Robinson & Morgan Solicitors 4 Drury Lane Solihull West Midlands B91 3BD MR COMMISSIONER HOWELL QC : In this appeal Ms Elizabeth Nelson seeks to have set aside as erroneous in law the decision of the Hull Employment Tribunal given with Extended Reasons sent to the parties on 31 March 1999 after a hearing on Monday 22 March 1999. Her Originating Application submitted to the tribunal on 20 November 1998 had been on the two main grounds of alleged sex discrimination and unfair dismissal on the part of her employers, Kingston Cables Distributors Ltd, in informing her while she was away on maternity leave that the job she would be required to do on her return would differ to some degree from what she had been doing previously: in particular it would no longer include certain accounting functions, and she would be required to devote her time to Sales and Customer Service only. Ms Nelson considered this to be a fundamental change in the basis of her employment and resigned rather than returning to take up the duties offered. Pursuant to the directions earlier given at the Preliminary Hearing of this appeal on 28 September 1999, the only issue for us to consider is whether the tribunal in their stated reasons for their decision adequately addressed and dealt with the issue of a possible constructive dismissal of the Appellant by her employer's conduct: in particular whether by indicating to her shortly in advance of the intended date of her return from maternity leave that the role she would be expected to perform would differ from what she had been doing previously, they had committed an anticipatory repudiatory breach of her contract of employment which gave rise to her leaving and thus to her being constructively dismissed. The facts needed to consider the issues arising on the appeal can be taken quite shortly from the tribunal's findings in paragraph 3 of their Extended Reasons as follows: "(a) The Applicant commenced work for the Respondent in September 1992 as a sales administrator. Subsequently, she became an accounts administrator and took qualifications relating to accountancy and subsequently a business management degree course. (b) While working for the Respondent she had had one child and returned to work and there had been no problems about that. (c) In the period relating to the pregnancy and birth of her second child she said that there were problems as a result of her maternity leave. (d) In this period of time the Respondent was transferring its accounts function to Dublin. The Applicant was well aware of this. She had been over to Dublin and acted as a liaison in the transfer up to the time of her going on maternity leave in August 1998. (e) During that time things speeded up. (f) There was a temporary worker recruited. The Applicant had been involved in recruiting the temporary worker from an agency and that cover went on until December 1998. (g) However, by the time that the Applicant was about to consider returning to work in October the accountancy function at the Respondent in England had significantly diminished and so there were discussions about the role in which the Applicant was, in fact, to return. The fact is that at that time the requirements of law relating to the definition of redundancy with regard to the Applicant's job had pretty well been fulfilled but discussions were taking place and the Respondent wanted the Applicant to return to her original role of sales administrator. The terms and conditions and payment were to be the same as her sales [ sc. accounts] administrator post and she had had several pay rises over the years. (h) She saw this as a reduction in status. However, there was on-going correspondence. The Respondents did, however, make it plain that the role that she had filled in accounts was not there any longer. The Applicant decided to put herself on the books of several agencies and immediately got the offer of another job which she took. She then claims that she had been dismissed by the Respondent." For the purposes of the appeal we have been provided with a supplemental bundle of various documents that were before the tribunal, including Ms Nelson's original particulars of employment as a sales administrator from 1 September 1992 and later documents showing her being described as "Accounts Controller" carrying out accounting and associated functions responsible to the United Kingdom Director. He confirmed in a statement dated 1 June 1998 that she was responsible for providing him with weekly and monthly profit reports and other summaries of a general accountancy controlled nature, plainly outside what would normally be expected of a person employed in Sales and Customer Service. Our attention has been drawn in particular to three letters in that bundle, which comprised the main documentary evidence before the tribunal showing how the alleged constructive dismissal of the Appellant had come about. It appeared that the Appellant had previously given formal notice of her intended return from maternity leave on 16 November 1998 but some discussion had been taking place a month in advance of that about the date of her return being brought forward two weeks by agreement, and about what there would be for her to do on her return. On 17 October 1998 she wrote to the UK director, Mr Mark Bayston, in the following terms: "Dear Mark I refer to our meeting on Tuesday 13th October 1998 in which you asked me, on my return from maternity leave, to go and work in the Sales Department, not as an Accounts Administrator, as I had been employed before my maternity leave to do. I have the right to come back to the job which I was employed to do on exactly the same terms and conditions, including money and status, as I had before maternity leave. I fully appreciate that sometime in the future there may be changes in my role which necessitates me moving to a different department but, at present, those changes are not, as I understand it, in force. My proposal is that I return to work, as we discussed, on 2 November 1998, to my job that I held before maternity leave. When I am in my post we can discuss what role I will have in the Company when the changes to my job, as Accounts Administrator, are implemented in the New Year, or shortly after that. I understand that there is a temporary worker currently covering my duties. I understand that this temporary worker will either have to be finished or transferred to another part of the Company. If this cannot be achieved by the 2nd November 1998, then please contact me and I will return on the date that I advised you, in my letter of 10th July 1998 i.e., 16th November 1998. I look forward to hearing from you." The response to that came from Mr Bayston in a letter dated 27 October 1998 as follows: "Dear Beth Further to our recent discussions, meeting of 19th October 1998 and your letter of 17 th October 1998. As you are already well aware, during the past 4 months, there have been a number of very necessary structural changes within the … group and in particular U. K. distribution. … ... With regard to the accounts administration functions, you are aware that many of the duties carried out at Kingston have then been duplicated in the Dublin head office. A review as to how we carry out these duties in Dublin only, is now taking place. Due to the above economic reorganisation and the urgent need for as much emphasis to be placed on the sales operation as possible, I can confirm that after much consideration you are required to join our national customer service team. This important role whilst working within a team will also hold a number of individual functions and special management projects, as and when they occur. Your extensive experience, knowledge of our business and industry will be very much required in this role. Your present salary, benefits, length of service and status within the company remain unchanged. It may be possible to accommodate some limited variation to your start and finish time, this will have to be agreed with your other team members. I appreciate your wish to return to your old role and the comments made in your letter are duly noted. I can assure you, that your maternity period has had no influence on this reorganisation, other than, the change of role would have taken place already. Thank you for your comments regarding this matter. I would appreciate confirmation of your return to work on the 2nd November 1998." The Appellant was not willing to accept this admitted change in her previous role and wrote back two days later on 29 October 1998 as follows: "Dear Mark: I am writing to you to tender my resignation from the firm. The reasons for this is that, despite my letter to you expressing my wish to return to the job which I did before my maternity leave, which still exists, you wrote to me telling me that the job was no longer OPEN to me. I consider that in these circumstances I have no alternative but to resign and consider myself to be dismissed. … Please arrange for my P45 to be forwarded to me and ensure all monies, outstanding to me, are paid." Our attention was also drawn to letters dated 21 October, 27 October and 28 October 1998 showing that while her discussions with the Respondents had been taking place, the Appellant had also placed herself on the books of a recruitment agency; and on 28 October 1998 had received, and accepted, the offer of a position as accounts administrator with another firm to start on Monday 16 November 1998. Her letter of acceptance of this new job had been dated 28 October, that is the day before she wrote to Mr Bayston on the 29th saying that she considered herself to have been dismissed by his letter of the 27th. The Tribunal's stated reasoning for rejecting the Appellant's complaint of unfair dismissal in the circumstances is contained in a single paragraph of their Extended Reasons at paragraph 4 on pages 4-5 of the appeal file as follows: "4. It is claimed that the final letter saying that her original job was not there, the letter of 27 October was a deemed dismissal: alternatively that she was entitled to leave without notice by reason of the employer's breach of contract by making that statement. The Tribunal take the view that at that time matters were still in negotiation, consultations were taking place. There was nothing absolutely finalised and there had, at that stage, been neither notice given of dismissal for redundancy on any particular date, or any breach of contract. Indeed, the Applicant had not, at that stage, given any really definite date to return to work. Had the Applicant given a definite date and returned and then been given different work to do, then the point would have been reached, presumably, when she might have claimed that there was a breach of contract. In this case, the Applicant, seemed, in colloquial terms, 'to jump before she was pushed'. It is the Tribunal's considered opinion, therefore, that the Applicant was not dismissed by the Respondent." Against that decision Ms Nelson appealed, the original Notice of Appeal dated 12 May 1999 contending in particular that the Tribunal's apparent findings that negotiations were still taking place and that the Appellant's job had not disappeared, were contrary to the evidence, in particular the clear statements in Mr Bayston's letter of 27 October 1998. Ms Gower, who appeared on her behalf before us, developed and broadened these contentions, founding in particular on what she said was the Tribunal's apparent failure to address adequately or at all the threatened fundamental breach of contract she said was embodied in the clear statements by the employer in the letter of 27 October 1998, which were consistent only with a fundamental change in the Applicant's job duties, as the Tribunal themselves had in practice recognised in their reference in paragraph 3(g) of their findings of fact to the requirements for a redundancy having been "pretty well fulfilled". She submitted that the Tribunal's stated reasoning in paragraph 4 thus showed that they had only directed their minds to the question of whether there had been an actual dismissal, and that they had erred in failing to take account of the possibility of an anticipatory repudiation or to make and record findings on that obvious issue. Moreover their references to negotiation and consultation had showed that they had wrongly allowed questions of fairness and reasonableness to intrude on what should have been a clear-cut question of whether there had been a constructive dismissal or not: only after that question had been given a clear answer could questions of fairness and reasonableness, or a proper consultation process, arise. Mr Christie on the other hand argued on behalf of the Respondents that there was no material error on the part of the Tribunal. First he said that all the matters complained of had taken place during the period while the Appellant's contract of employment was still in a state of statutory suspense because she was still absent from work in the period of her maternity leave entitlement under Section 71 of the Employment Rights Act 1996. In those circumstances, submitted Mr Christie, there could be no question of the normal contract principles of anticipatory repudiation applying; and the Tribunal had been correct in holding that there was no question of dismissal to consider unless and until the point had been reached when the Applicant had actually tried to return to work on the due date, and then been given different work to do. Secondly, Mr Ritchie submitted that in any case the Tribunal's express findings that there had been no dismissal and that the Applicant had "jumped before she was pushed" were justified, and should be taken as extending to any possible question of anticipatory breach as the evidence showed no more than what he described as a "mere shift in the focus of what she was required to do", falling short of anything that could amount to a fundamental change in the terms of her employment to justify treating is as the basis for a constructive dismissal. The Tribunal's conclusion of fact that there had been no dismissal of any kind was therefore justified. Mr Christie put forward as a third reason for justifying the Tribunal's conclusion that the evidence showed that in any event the Appellant had not left her employment in response to the employer's indication that her role was to be changed. In his submission the fact that she had been looking for other jobs and had actually accepted one the day before writing to tender her resignation showed that her leaving had been for other reasons altogether. In this context he referred us to the well known judgment of the Court of Appeal in Norwest Holst v Harrison [1985] ICR 668 and, in particular to the passage quoted from Buckley LJ at page 676H-678D explaining the general principles of anticipatory repudiation in this context; and also to Harvey , Industrial Relations and Employment Law, paragraph D403, for the proposition that in order for an employee to be able to claim constructive dismissal his or her leaving the employment must be in response to the employer's conduct relied on as a breach of contract and not for some other unconnected reason. Having considered these arguments and the terms in which the Tribunal stated the reasons for their decision, we accept the submissions of Ms Gower on behalf of the Appellant and reject those of Mr Christie. In our judgment, the Tribunal's decision as recorded in their statement of reasons did fall into error of law in two important respects, making it necessary for the decision to be set aside and the question of whether a constructive dismissal has been established on the facts of this case to be reheard and determined. In the first place, it appears to us that the Tribunal erred in failing to make and record a sufficiently clear finding about whether the altered role she was told by the employer's letter of 27 October 1998 she would have to undertake when she returned to work, did or did not embody a fundamental alteration of the terms on which she was employed so as to give rise to a possible repudiation. It appears to us quite clear from the terms of the letter itself that a material change in the Appellant's role was indeed admitted by the employers to be involved, and the Tribunal's own references in paragraph 3 (g) to redundancy and in paragraph 4 to being given "different work to do" appear to us to confirm that there was a serious issue on the facts whether the changes required were of a fundamental nature so as to give rise to a repudiatory breach on the employer's part. Yet the Tribunal appear to have recorded no clear finding on this issue as we consider the facts required them to do. Secondly we think the Tribunal erred in failing to address with sufficient clarity the question of whether there had been an anticipatory repudiation by the employer of the contract in what was said in the letter of 27 October 1998, even though as the Tribunal found the point had not been reached at that stage where it could be said that there had been an actual dismissal of Ms Nelson by the employer from its employment on that date. We do not for our part think that the terms of the letter of 27 October 1998 admit of any other reasonable interpretation than that "the change of role" was being put forward as something that Ms Nelson would have to accept if she was to return to her employment at all on either 2 or 16 November 1998; and we do not think in view of the express terms of that letter that paragraph 4 of the Tribunal's stated reasons (and in particular the statement that "there had, at that stage, been neither … or any breach of contract") shows with sufficient clarity how the issue of a possible anticipatory breach by what was expressly said in that letter had been dealt with. On those two grounds we hold the decision of the Tribunal to have been erroneous in law and we set it aside. In so holding we reject the submissions of Mr Christie that considerations of an anticipatory repudiation of the contract are irrelevant in circumstances such as this case, and also that the aspects of the evidence to which he drew out attention justified the Tribunal's conclusion. Mr Christie cited no authority for the proposition that no anticipatory repudiation of an employer's contractual obligations can take place while those obligations are in suspense during a period of maternity absence and we do not accept it as well founded. It was common ground that on the facts of this case the Appellant's contract of employment had not been brought to an end when she went away on maternity leave. On the contrary, it remained on foot during the period of her absence on maternity leave, though her own obligations to work and her employer's obligations to pay her remuneration were placed in abeyance during that period by the statutory provisions. Mr Christie also accepted that if a woman returning from maternity leave is told by her employer on her first morning back at work that her duties are now changed in a fundamental and unacceptable way, that could give rise to an immediate constructive dismissal. We can see no reason in principle why an employer who, instead of waiting until the woman's actual return to spring such a change on her, gives a clear indication in advance that the old conditions of her job will no longer be available to her and that she must accept a fundamental change if and when she does return, should not be held thereby to have evinced an intention not to continue performing his part of the original contract. That would be capable of giving rise to an anticipatory repudiatory breach entitling the employee, by due acceptance, to treat the contract as brought to an end straight away under the well established principles of the ordinary law of contract set out in the passage from Buckley LJ quoted in Norwest Holst at pages 677A-678D. Those principles appear to us to be just as capable of applying to executory obligations under a still subsisting contract of employment whether or not the current obligations under that same contract are presently in abeyance or suspended through maternity or any other reason. In our judgment, the question that needs to be addressed in any particular case is not whether as a matter of principle an anticipatory breach is capable of taking place in such circumstances at all, but whether the facts do in fact establish that a breach of that nature has taken place and been duly accepted so as to bring the contract to an end. For the reasons we have already given we do not consider the Tribunal's stated reasons record with sufficient clarity how the necessary factual questions to determine those issues have in fact been considered and determined in relation to the facts of this case. The points Mr Christie urged in seeking to persuade us that there was in fact no fundamental change in the Appellant's terms of employment in the altered role proposed for her are questions that will have to be gone into by the Tribunal in the course of a redetermination of the factual issues in the case. Contrary to those submissions, we do not for our part find it at all self-evident that the change of role put forward was a relatively minor one; and the Tribunal's comments, to which we have referred, if anything suggest the opposite. Similarly, the question of whether the Appellant in fact left her employment because of what she was told in the letter of 27 October 1998, or for some other quite unconnected reason, is a matter of fact for the proper determination of a Tribunal after going into all the evidence. We reject Mr Christie's submission that we should take a view on this ourselves and confirm the Tribunal's decision on the basis of the letters he showed us. Again we agree with Ms Gower's submission that issues of whether the Appellant did in fact leave her employment in response to the employer's repudiation of her contract are questions to be determined by the Tribunal, along with any questions of the fairness or otherwise of her constructive dismissal, only once it has been clearly established whether conduct amounting to a repudiation for the purposes of a constructive dismissal has taken place. Specifically, we do not accept Mr Christie's submission that the fact that the Appellant's letter bringing the contract to an end and saying that she regarded herself as being dismissed was dated the day after her acceptance of another job, was conclusive against a constructive dismissal on the facts of this case. As Miss Gower pointed out, everyone who responds to an anticipatory breach will have "jumped" before the actual push came; and the submission that there cannot be a constructive dismissal where an employee has made alternative arrangements before communicating acceptance of the repudiation appears to us to confuse two principles. First, as stated in the passage from Harvey cited above and the cases referred to at paragraphs 508-541, the employer's breach must, as a matter of fact, effectively cause the employee to leave the employment if a constructive dismissal is to take place. Second, in order to bring a contract to an end on the ground of anticipatory repudiation the employee's acceptance of the repudiation must be communicated , failing which the contract will continue to run: see per Cumming-Bruce LJ in Norwest Holst at pages 678E-G. The mere fact that an employee faced with an anticipatory repudiation takes the natural and understandable step of making sure he or she will have another job to go to before notifying acceptance of the repudiation does not of itself mean that the reason for having to seek another job and accept the repudiation was anything other than the employer's anticipatory breach. It is all a question of fact in the individual case, and as was held by another division of the EAT in Jones v Sirl [1997] IRLR 493 , the fact that an employee arranges another job to go to is not inconsistent with a finding of constructive dismissal. This appeal is accordingly allowed and the decision of the Tribunal on the unfair dismissal issue set aside. The case is remitted for all relevant issues on whether the employer's conduct amounted to a repudiation giving rise to a dismissal of the Appellant, and if so whether that dismissal was fair or unfair in all the circumstances, to be reheard and redetermined by either the same or a differently constituted Tribunal. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII