Appeal No. UKEAT/0075/04/RN

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 22 June 2004
Judgment delivered on 21 July 2004

Before
HIS HONOUR JUDGE BIRTLES
MR I EZEKIEL
MR D WELCH

MR P P GREENE	APPELLANT

NEOPOST LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR FRANCIS DAVEY
(of Counsel)
Instructed by:
Free Representation Unit
4th Floor, Peer House
8-14 Verulam Street
London WC1X 8LZ	
For the Respondent	MR STUART RITCHIE
(of Counsel)
Instructed by:
Messrs Mills & Reeve Solicitors
1 St James Court
Whitefriars
Norwich NR3 1RU	

SUMMARY

Contract of Employment

Is there a breach of the term of trust and confidence if employer has no knowledge of the facts which make his conduct unacceptable to employee?

HIS HONOUR JUDGE BIRTLES

Introduction

1.	This is an appeal from the decision of an Employment Tribunal sitting at London (South) on 8 September and 13 October 2003.  The Extended Reasons were sent to the parties and entered in the Register on 14 November 2003.  The Chairman was Ms M E Stacey and the members were Mrs J S Muir and Mr S Blake.  The unanimous decision of the Tribunal was that the Originating Application was dismissed.  That Originating Application also contained claims for constructive unfair dismissal, breach of contract, failure to make a redundancy payment and unauthorised deduction from wages which were withdrawn at the hearing before the Employment Tribunal.

The Material Facts

2.	The Employment Tribunal found the following facts:

“3.	On the balance of probabilities and from the information before us the Tribunal finds the following facts relevant to this case.  The Applicant had continuous service with the Respondent organisation from 17 February 1992 when he was employed by Ascom Hasler Ltd as a Field Service Engineer, within their Central and South London area.  He was quickly promoted to become Technical Support Engineer from 1 October 1995.  In this post he was predominantly engaged in telephone based technical advice to the field services engineers, providing back up and assistance to them.  He also trained engineers on the machines sold by the Respondent organisation.  He also trained the salesmen on the technical specifications of the company's products and liaised with the manufacturers in Switzerland.  He produced technical bulletins on products and occasionally went out on site if necessary.  Mr Greene was an exemplary employee with a faultless record, technical knowledge and expertise second to none and played an important part in the Respondent's business.  He was highly regarded by colleagues and managers and well liked and respected.
4.	The Applicant's terms and conditions of employment are as set out on pages 20-33 of the agreed bundle.  The provision concerning his workplace is as follows:
"2.1	Place of work 
2.1.1	Principal place of work
Offices at: Commerce Way, Croydon, or Airport House, Purley Way, Croydon or such other place as may be agreed between the employee and the Company
2.1.2	Other places of work 
The Company may from time to time require staff to work elsewhere.  In the event of the Company requiring staff to work at a place other than the principle place of work, the agreement of the staff concerned will be obtained…”
5.	In early March 2001 Ascom Hasler Ltd changed its name to Ascom UK Ltd.  The Applicant was employed in the part of the company dealing with mailing and franking machines and associated equipment, which was then split off from Ascom UK and renamed Mailing Systems Ltd, generally referred to as MSL.  The Applicant's employment transferred to MSL on 9 October 2001.  Neopost Ltd acquired MSL through a share acquisition on 31 May 2002.  The MSL business and its assets were subsequently transferred to Neopost Ltd in around February 2003 and the Applicant's employment transferred under operation of TUPE at that time.  Susan Webber, Ascom UK Ltd HR Manager from April 2001 liaised with Neopost Ltd managers concerning the transfer of staff and when requested provided a copy of the standard Ascom UK Ltd terms and conditions of employment (page 54-65) which provide a different mobility clause to that in the Applicant's contract of employment.  The standard Ascom contract provides that "Your principal place of work will be at the Company office shown in your Contract of Employment but may be varied from time to time to ensure continuity of productivity and employment" (p56).  The Respondent erroneously assumed that this was the Applicant's contractual term.  The personnel documents for the Applicant had either gone astray or been lost in transit in early 2003 and the Neopost personnel department did not have a copy of his contract of employment at this stage. 
6.	It was common knowledge amongst the staff that the Croydon base in Commerce Way would close.  It was announced on 25 September 2002 and that it was the intention to move the majority of the Croydon based activities to Romford, Essex over a period of some months with an office to be sought in the New Year to maintain sales facilities in the South London area.
7.	The Applicant, who lives locally to the Croydon office in Norwood, South London, visited the Romford office and attended a course about various technical matters in September 2002 and was told by his new Neopost manager, Andy Smith (Technical Support Manager) that there would be no redundancies in the department and that there was a job for the Applicant in Romford.  Mr Smith and his colleagues from Neopost were extremely impressed with the Applicant's reputation, skills and abilities and wished for him to remain with the company.  At this time the Applicant did not share his misgivings about relocating to Romford since Mr Smith was presenting the move as a certainty and as a fait accompli, rather than a discussion point or consultation exercise.  Mr Greene was however, unhappy about it and later obtained advice as to his rights in respect of the relocation.  Mr Smith, for his part, arrived at the impression that the Applicant was enthusiastic about working for the company and had been interested and impressed with the new products and the course in Romford, and was looking forward to continuing his career with the company. 
8.	Around about this time, redundancy was being discussed with other members of MSL staff in Croydon in different departments to the Applicant, such as administration, who were being offered redundancy if they did not wish to relocate.  In November 2002, Mr Smith told Malcolm Holmes, (the other technical service engineer based in Croydon), of the relocation to Romford and Mr Holmes was also told by Mr Smith that there would be no redundancies in the service engineering department, but that he would be moving to Romford.  Mr Holmes did not want to move to Romford and told Mr Smith he would think about it and ring him in a few days.  Mr Holmes did contact Mr Smith shortly afterwards and made very clear his objection to relocating to Romford.  Mr Holmes was eventually offered redundancy at the end of January 2003.  He worked for two weeks on a trial period basis in the position of Field Technical Specialist before taking the redundancy offer.  The redundancy terms offered and accepted by Mr Holmes, were based on double his actual salary for each year of service, a further 3 months base salary as an ex gratia sum and a lifting of the cap of the number of weeks' service used in the computation (the engineers' terms) (page 91).  Other engineers were also offered the engineers' terms on an individual basis.  Malcolm Holmes, like the Applicant, was based at Croydon.  The Tribunal find that the redundancy terms available to Ascom UK employees and MSL employees who were made redundant (the MSL Scheme), which were less generous then the engineers' terms, and are set out on page 86 of the bundle, had contractual force in that in the event of redundancy the Respondent was contractually bound to honour the MSL Scheme in respect of affected employees.  The MSL scheme is similar to the statutory scheme, but without the statutory cap on the calculation of a week's pay.
9.	No contact was made with the Applicant beyond the conversation with Andy Smith when the Applicant attended the course in Romford in September 2002.  The Applicant telephoned Mr Smith on 29 January to ask what was planned for him and was told that his post would be transferred to Romford and his terms and conditions would remain unchanged.  The Applicant was surprised partly because he had then checked his contract and knew there was no mobility clause, partly because he knew on the grapevine that some of his colleagues were being approached with redundancy offers and partly because he thought Mr Smith would be aware of his lack of enthusiasm at moving to Romford.  The Applicant was therefore surprised that an assumption appeared to being made that he would move.  Mr Smith did not appreciate Mr Green's strength of feeling on the matter and took the opportunity to increase the Applicant's pay in line with Neopost employees and authorised an internal "job change form" transferring the Applicant from Croydon to Romford (p107) and which was duly forwarded to the Applicant by the Human Resources Department.  The Applicant was most surprised to receive this and was most unhappy about the way he perceived he was being treated and, after taking advice, set out in detail his concerns in a letter to Mr Smith (p109-110) asserting that his post was being made redundant with the closure of the Croydon base and that the failure to acknowledge the redundancy situation was somewhat underhand.  A meeting was convened between the Applicant and his adviser Ms Cobb and Mr Smith and a representative from HR (Caroline Benjamin) which took place on 25 February 2003.  At the meeting both sides were at cross purposes: Ms Benjamin and Mr Smith did not appreciate that the Applicant's contract of employment did not include a contractual mobility clause and did not engage with the Applicant as to his contractual terms in detail, but rather sought to reassure the Applicant of his value to the company and to reiterate that his position was not redundant.  The Applicant did not realise that the Company did not know that his contractual place of work was fixed unless agreed otherwise with him, and so felt his concerns were being dismissed and brushed aside.  He found the company's failure to acknowledge, and worse, to deny, the redundancy situation was extraordinary.  The Applicant was also concerned about the differential treatment between himself and Mr Holmes.  The meeting then moved on to discuss possible alternatives to working from Romford and Ms Benjamin said that she would look into it and revert to him.  The Applicant was frustrated about how the meeting had gone because he felt his point about the fact that he was redundant was being lost in the Respondent's eagerness to move him to Romford.  On the company's part, they too were perplexed as they had thought the Applicant was keen to remain with them, and they were keen to keep him, and wanted to find ways to encourage him to remain.  Ms Benjamin’s response (p115-6) reiterated that the Respondent did not consider that the Applicant was redundant and suggested two options as alternatives to working from Romford each day.  The first was to work from the Reigate office (which was to be set up principally as a location for sales staff), or from home.  Both options would require travel to Romford from time to time.  Meanwhile the Applicant had written to Andy Smith (p113-4) and repeated his assertion that the closure of his workplace made him redundant. 
10.	Chris Burns, Human Resources Director, then telephoned the Applicant to request a further meeting with the Applicant, alone, which took place on 13 March 2003 and was also attended by Nigel Goodridge, Operations Director.  During the meeting Mr Greene explained his journey would increase by 11 miles or so were he to transfer to Reigate and that the traffic was heavy.  Mr Goodridge explained that flexibility could be arranged on working hours so he could travel at less congested times of day.  Mr Burns offered to install all the facilities and resources necessary at the Applicant's home to enable him to work from home as much as possible.  A second meeting took place the following day when Mr Goodridge and Mr Burns sought to reassure the Applicant of his value to the company and the role they thought he could play at Neopost and reiterated their intention to be as flexible as possible to ensure they could retain his services.  It was suggested by Mr Burns that under the standard terms and conditions of employment a forced relocation was within their rights, but he also said that he was seeking a consensual arrangement to facilitate the Applicant.  The Applicant listened to what was being said and the meeting concluded with the Applicant stating that is was likely he would seek to resign.  He was most anxious that the Respondents had not admitted and accepted that his position at Croydon was redundant and this caused him much concern.  Mr Greene had received unequivocal advice that his fixed location clause in his contract of employment meant that he was redundant and so the company's somewhat dismissive assertion that he was not redundant led the Applicant to consider that the company's stance was underhand and inspired by dubious motives to deny him his redundancy entitlement.  With the benefit of hindsight the Applicant accepted at the Tribunal hearing that the Respondent was not acting in bad faith.
11.	The Applicant considered the matter further and on 5 March 2003 wrote rejecting the two options put forward (home working and Reigate based) and reminding Mr Smith that the terms and conditions of his employment did not permit a change of location without his express agreement which, he pointed out, had not been reached.  The Applicant repeated this assertion in subsequent letters both through his own correspondence and letters written by his adviser, Ms Cobb (see for example pages 123-4).  On 25 March 2003 the Respondent wrote again to the Applicant asserting that his contract allowed for geographical mobility and asking him to accept the change in location.  The Applicant wrote on the same day (p133) resigning and claiming and constructive dismissal.  At that point Ms Eckl from the HR department telephoned Sue Webber to ask about the Applicant's terms and conditions of employment.  Ms Webber was able to explain that the Applicant's terms and conditions showed his workplace as fixed at Croydon or Purley unless otherwise agreed with the post holder and Ms Webber faxed a copy of the Applicant's contract on 28 March to the H.R department at Neopost Ltd.
12.	In the Applicant's resignation letter he explained that he would work until 30 April 2003, the date of the closure of the Croydon office.  During the Applicant's notice period he worked extremely hard to ensure a smooth and efficient wind down including working long hours at Neopost's warehouse in Basildon, Essex and ensured identification of all MSL machines and parts to enable a proper inventory to be drawn up and assisted in dismantling whole machines and valuable parts for the service support spares.
13.	A further meeting took place on 10 April 2003 attended from the company side by Mr Goodridge and Mr Burns and by the Applicant and his adviser, Ms Cobb.  Mr Burns explained again that Neopost were keen to retain the Applicant's skills as a valuable employee and that the two options - working predominantly from home or based at Reigate were still on the table.  No progress was made in that the Applicant repeated his assertion that the Reigate location was not suitable because he would have to spend much time travelling and nor was he comfortable with the idea of working from home without all the machinery and equipment in front of him. He did not consider that facilities could be set up suitable for home working. 
14.	On 29 April 2003 Mr Burns wrote again to the Applicant (p146-7), expressing regret that the situation had become confused and admitted that there might have been an error in the understanding of the Applicant's contractual terms.  His letter went on to say that the Respondent considered that even in the absence of a contractual mobility clause they considered the offer of employment in Reigate or predominantly home working to constitute suitable alternative employment which it would be unreasonable for the Applicant to refuse, and that his refusal would therefore deprive him of a redundancy payment.  Mr Burns explained that the offer of employment based at Reigate or from home (or Romford) would remain open until 12 May 2003.  The Applicant did not receive the letter until after 30 April and did not accept the Respondent's offer.”

The Employment Tribunal’s Conclusions

3.	The Employment Tribunal’s conclusions are contained in paragraphs 20-22 of its decision.  The Tribunal said this:

20.	We accept that this is a case where the employer genuinely believed that the Applicant's contract provided for contractual mobility and we accept that the standard Ascom terms do provide flexibility for the employer to move their staff as and when occasion demands and we further accept that the power to move staff "from time to time" includes a permanent change of base.  We also accept that the Respondent sought to agree changes to the Applicant's location with him: they did not want to lose him and given that the base in Croydon was closing, genuinely wanted to find an alternative that would be acceptable to him.  The difference between the Respondent's analysis and the Applicant's, was that the Respondent considered that if the Applicant did not agree to a change of base, it could be imposed upon him, whilst the Applicant considered the change could only be made with his agreement.  The Applicant was right in this regard as a matter of contract law, and the Respondent was wrong.
21.	We next considered whether the employer's belief in the contractual position was reasonable and this was more difficult.  The position was that from his letter of 22 y onwards Mr Greene was trying to explain that he considered there was a redundancy because he had not agreed a change in the location of his workplace, as per his contract, but either management were not hearing what he was saying, or he was not explaining so that they could understand.  We think it was due to a combination: the Respondent had an idée fixe that the Applicant was on the standard Ascom terms contract, and so was not receptive to the possible issue, and Mr Greene did not expressly draw their attention to the exact wording of his actual contract.  On balance however we consider that at the stage of the meeting on 25 February 2003 the Respondent were on notice that there could be a problem and it was incumbent upon them to investigate the contractual position further which they did not do.  We therefore accept Miss Cobb's submission that the case can be distinguished from that of Frank Wright & Go. Holdings Ltd v Punch [1980] IRLR 217 and were buoyed in this conclusion by the dicta of Templeman LJ in Financial Techniques (Planning Services) Ltd v Hughes [1981] IRLR 32.  But that assists the Applicant only so much we have found that the Respondent was genuine in its desire to retain the services of Mr Greene and that they were negotiating in good faith and seeking to agree a new workplace with the Applicant.  They wanted to keep him and his departure was not their desired outcome - whether by resignation or redundancy.  So there was no actual breach of contract at the time the Respondent were ignorant of the Applicant's contractual rights and when they realised the mistaken assumption they had been labouring under on 28 March 2003, continued attempts were made to agree the Applicant's new workplace with him.  Even at the time of the Respondent's wrong view of the position they could not really be said to have evinced an intention to no longer be bound by the Applicant's terms, since their aim was for an agreed change.  We therefore conclude that there has been no repudiatory breach of the Applicant's contract of employment in this regard.  The negotiations were ongoing and the Respondent's behaviour was not such as to be regarded as going to the root of the contract entitling the Applicant to consider himself no longer bound by the contractual terms.  We understand how irksome it would have been to know that a colleague who had objected to transfer from the outset, had been offered voluntary redundancy, but we do not conclude that the treatment of Mr Holmes was sufficient to give the Applicant grounds for constructive dismissal.  Nor do we consider that the Respondent's failure to acknowledge a redundancy situation assists the Applicant greatly, since if agreement had been reached or suitable alternative employment offered the effect would have been that there was no dismissal nor right to redundancy payment, and the Respondents were working towards exactly that outcome.
22.	Therefore our conclusion must be that the Applicant's resignation was exactly that, a resignation and not a constructive dismissal within the meaning of S 95(1)(c) ERA.  The consequence of this finding is that there was no redundancy.  S139 is predicated on a dismissal in providing that: 
"For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to …”
and the right to a redundancy payment likewise: Section 135 ERA which provides that: 
"(1)	An employer shall pay a redundancy payment to any employee of his if the employee -
(a)	is dismissed by the employer by reason of redundancy, or 
(b)	is eligible for a redundancy payment by reason of being laid off or kept on short-time".
So in light of our conclusion that the Applicant was not dismissed, the originating application must fail.”

The Amended Notice of Appeal

4.	The Appellant has been represented by Mr Francis Davey, instructed by the Free Representation Unit.  We are grateful to him and to Mr Stuart Ritchie, who appeared for the Respondent, for their Skeleton Arguments and oral submissions.  We pay tribute to the work of the Free Representation Unit which plays a vital role in representing parties who cannot afford legal representation.

5.	The Notice of Appeal contains two grounds of appeal and we propose to take them in the order in which they were argued before us.

Ground 1

6.	The first ground of appeal alleges that the Employment Tribunal erred in law in finding there was no repudiatory breach of the Appellant’s contract.  In reaching this finding, the Employment Tribunal misdirected itself by having regard to the reasonableness of the Respondent’s subjective belief in the contractual position, its intentions vis-à-vis the Appellant and its conduct after the Appellant’s receipt of its 25 March 2003 letter (“the letter”).  The Employment Tribunal should have found that the letter amounted to such a fundamental breach of the Appellant’s contract that his resignation was in law a dismissal.

7.	No issue arises in this appeal as to an actual breach of an express term of the contract because the Employment Tribunal found as a fact that there was no such breach of contract: decision paragraph 21.  Indeed, Mr Davey does not seek to argue that there was an actual breach of an express term of the contract in this case.  Instead, he argues that there was an actual breach of an implied term of trust and confidence.

8.	The issue is whether the Employment Tribunal were correct in finding that there was no anticipatory breach of contract.  Mr Davey submits that the question of whether or not there is an anticipatory breach of contract is an objective one.  In support of that submission he refers us to Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] 1 WLR 277 at page 281D per Lord Wilberforce.  Indeed, we understand there to be no dispute between the parties about this proposition of law.

9.	Mr Davey also refers us in the context of a genuine mistake as to the construction of a contract (as here) to the test elaborated by Sir John Donaldson MR in Bridgen v Lancashire County Council [1987] IRLR 58.  At paragraph 16 he said this:

“16.	But, for my part, I would not have thought it necessary to give any particular time to this point because the essential features of a claim for constructive business are two-fold; first, that the conduct of the employer relied upon must be such as to amount to a repudiation by him of the contract of service: it has to be, in popular language, expulsive conduct - to the lawyer repudiatory conduct; and, second, that the employee has left because of that conduct.  The mere fact that a party to a contract takes a view of its construction which is ultimately shown to be wrong, does not of itself constitute repudiatory conduct.  It has to be shown that he did not intend to be bound by the contract as properly construed.  There is no finding by the Industrial Tribunal that that was the case here.”

That observation was applied by Burton J in Haberdasher’s Monmouth School for Girls v Mrs R Turner (unreported) EAT/0922/03/RN, 8 March 2004, paragraphs 22, 26-28.  Mr Ritchie also referred us to paragraphs 29-30 of that decision.

10.	Having approved the observation of Sir John Donaldson MR in Bridgen, Burton J went on to say this:

“22.	It is plain that that, set in the context of Woodar v Wimpey, to which we have referred, makes the position entirely clear.  What is not sufficient is an assertion, however forthright, by a party in good faith, of its interpretation of a contract – as here, an interpretation of the contract that the other party to it is not an employee but is self-employed – and an intention to act in accordance with the party’s interpretation of that contract.  What is necessary in order to amount to repudiation is a position that the party will not comply with the contract unless such be the case, i.e. that the party does not intend to be bound by the contract as properly construed, i.e. if it should turn out that such party should be wrong in its interpretation.
…
28.	It might also be that on the construction of a particular set of circumstances the Tribunal might conclude that, even if a lot was not at stake, such was the high-handedness or bloodymindedness of one side or another to the negotiations or discussions that had it turned out to be wrong it would not in fact have complied with the contract, come hell or high water.
29.	But there must be, in our judgment, some kind of consideration and discussion of that kind, because otherwise, as in the end it appeared to us Ms Palmer was compelled to accept, Sir John Donaldson’s helpful, precise dictum, which consists of two sentences, would not be honoured as to the contents of both sentences.  We remind ourselves what he said:
“The mere fact that a party to a contract takes a view of its construction which is ultimately shown to be wrong does not of itself constitute repudiatory conduct.  It has to be shown that he did not intend to be bound by the contract as properly construed.”
30.	An assertion, however high-handed, however heavy-handed, however determined, as to the interpretation of a contract, would, on that basis, not be sufficient of itself to constitute repudiatory conduct, absent of course some finding of a different breach of contract, such as breach of the mutual term of trust and confidence or something of that kind, without the second sentence being fulfilled, namely that the relevant intention had to be shown.”

11.	Mr Davey submits that a proper reading of paragraph 21 of the Tribunal’s decision shows that the Employment Tribunal were adopting a subjective test which was dependent on the Respondent’s intention.  He also refers us to the letter written by the Appellant dated 25 March 2003: EAT bundle pages 65-66.  That says this:

“Dear Philip, 
Thank you for your letter dated 17th March, 2003.  I write in response to the points you made in turn.
Point 1
We understand your position on the working from home option and accept what you say.  We put this on the table as an option to demonstrate our flexibility and keenness to keep you as an employee.
Point 2 
We do not share your view that working from our new offices in Reigate is unacceptable.  Your contract clearly states in Part 2.3 that “Your principal place of work will be at the Company offices shown in your Contract of Employment but this may be varied from time to time to ensure continuity of productivity and employment”.
The Reigate office is based in postcode RH2 900, which is a distance of 17 miles from your home.  You already drive 5 miles to the Croydon office in CRO 4XA making the difference an additional 12 miles.  We do not view this as unacceptable.
Regarding facilities, we furnish our offices to a high standard and are equipped with all the necessary technology and office facilities to carry out your normal duties. 
Point 3 
I attach a copy of the job description.  In our meetings with Nigel Goodridge we spoke about the job and on more than one occasion you clearly said that you are happy.  Nigel witnessed this and I made notes after the meeting.
Point 4 
With regard to your query over salary you will have noticed that your salary was increased from £20,376 to £23,500 in February of this year. . 
Lastly, I would like to make our position clear, we do not accept your role is redundant.  Your location has changed but with reasonable commuting distance and you now enjoy greater earnings.  We have demonstrated flexibility and understanding and are keen for you to continue your career with us.  We believe we offer an excellent opportunity for you to further your career, enjoy improved benefits and earnings. 
I also acknowledge receipt of the letter dated 18th March, 2003, from your Advisor, which I will attend to as soon as possible.”

12.	Mr Ritchie submits that the first ground of appeal is in fact limited by the Notice of Appeal to consideration only of that letter of 25 March 2003: see the last sentence of the ground of appeal set out above.  In the alternative, Mr Ritchie argues that the Employment Tribunal focused on the Appellant’s claim that the Respondent had no power to move him: Employment Tribunal paragraphs 9, 11, 13 and 21.

13.	Mr Ritchie also refers us to the letter of 27 February also written by the Respondents: EAT bundle pages 75-76.  He argues that the Employment Tribunal correctly applied the law and approached the question of whether or not there had been an anticipatory breach by applying the objective test.  The Appellant was not being required to move and the Employment Tribunal found as a fact that the Respondent was trying to find a consensual solution to the problem and was therefore not acting in breach of the Appellant’s original contract of employment with Ascom Hasler Ltd at paragraph 2.1.1-2.1.2: EAT bundle page 43, or his later contract of employment with Ascom UK Ltd at paragraph 2.3: EAT bundle page 55.

Employment Appeal Tribunal Decision

14.	We do not accept Mr Ritchie’s submission that ground 1 of the Notice of Appeal relates only to events post-receipt of the Respondent’s letter of 25 March 2003.  In our judgment there is reference to (i) the reasonableness of the Respondent’s subjective belief in the contractual position (ii) its intentions vis-à-vis the Appellant and (iii) its conduct after the Appellant’s receipt of its 25 March 2003 letter (“the letter”).  However, we do accept Mr Ritchie’s submission that properly construed the Employment Tribunal did not confuse actual breach of contract with anticipatory breach of contract.  Furthermore, it applied the objective test to the question whether or not there had been an anticipatory breach of contract.

15.	The Employment Tribunal fastened on the continuing efforts of the Respondent to achieve a consensual solution to the problem.  That activity continued while the Respondent was ignorant of the Applicant’s contractual rights and continued after they became aware of them.  In those circumstances there was no attempt to force the Appellant to move.  We particularly rely upon the following passage of the Employment Tribunal decision:

“21.	…  So there was no actual breach of contract at the time the Respondent were ignorant of the Applicant's contractual rights and when they realised the mistaken assumption they had been labouring under on 28 March 2003, continued attempts were made to agree the Applicant's new workplace with him.  Even at the time of the Respondent's wrong view of the position they could not really be said to have evinced an intention to no longer be bound by the Applicant's terms, since their aim was for an agreed change.  We therefore conclude that there has been no repudiatory breach of the Applicant's contract of employment in this regard.”

Ground 2

16.	The second ground of appeal is that the Employment Tribunal’s decision was perverse.  No reasonable Tribunal could have failed to find that the letter of 25 March 2003 was the last in the sequence of events amounting to a fundamental breach of the implied contractual term of mutual trust and confidence.  The Employment Tribunal should have found that the letter amounted to such a fundamental breach of the Appellant’s contract that his resignation was in law a dismissal.

17.	Before turning to the submissions made to us, we remind ourselves of the law relating to perversity: see the remarks of Lord Donaldson MR in Piggott Brothers & Co Ltd v Jackson & Others [1991] IRLR 309 and more recently those of Mummery LJ in Yeboah v Crofton [2002] IRLR 634.  At paragraph 93 Mummery LJ said this:

“93.	“Such an appeal ought only to succeed where an overwhelming case is made out that the Employment Tribunal reached a decision which no reasonable tribunal, on a proper appreciation of the evidence and the law, would have reached. Even in cases where the Appeal Tribunal has "grave doubts" about the decision of the Employment Tribunal, it must proceed with "great care", British Telecommunications PLC v Sheridan [1990] IRLR 27 at para 34.”

18.	Mr Davey submits that the breach of the implied term of trust and confidence in this case was the Respondent’s failure to obtain in good time a copy of the original contract of employment and/or its failure to investigate the Appellant’s precise contractual position.  That submission is not ground 2 of the amended Notice of Appeal which addresses a completely different issue, i.e. the effect of the letter of 25 March 2003.  To that extent we agree with Mr Ritchie’s submission that the way this ground of appeal has been argued is outwith the Notice of Appeal.  However, we will also deal with the issue on the merits.  In our judgment the Employment Tribunal carefully considered the facts (both parties gave evidence) and it looked at the correspondence including the letter of 25 March 2003.
19.	In the light of the Employment Tribunal’s finding that the Respondent was attempting to find a consensual solution to the problem before and after the Appellant’s true contractual position was known to them, no error of law arises in the Tribunal’s construction of the letter of 25 March 2003, not least because that letter crossed in the post with the Appellant’s letter of resignation dated the same date: EAT bundle page 85.  Indeed, the Appellant expressly acknowledged that fact in his subsequent letter of 27 March 2003: EAT bundle pages 86-87.

20.	In those circumstances it cannot possibly be said that the letter of 25 March 2003 from the Respondent to the Appellant amounted to a breach of the implied term of trust and confidence which caused the Appellant’s resignation and his claim for constructive unfair dismissal.  In our judgment there was no error of law by the Employment Tribunal here.  Under no circumstances could we possibly say that the decision of the Employment Tribunal was perverse in law.

Conclusion

21.	For these reasons this appeal is dismissed.