The tribunal refer to section 95 (1)(c) of the Employment Rights Act 1996 and state that they have also had regard to the case of Western Excavation (ECC) Ltd v Sharp [1978] IRLR 27. They then, at paragraph 40, state:
clearly bearing in mind that there is, in every contract of employment, an implied mutual duty of trust and confidence and that duty will be found to have been breached if, without reasonable and proper cause, an employer conducts himself in such a way as calculated to destroy or seriously damage that relationship of trust.
At the end of paragraph 43, the tribunal state their view that the actions of the Respondents amounted to a fundamental breach of contract. The route by which they arrive at that conclusion is as follows. They decided firstly that, having examined the whole facts and circumstances of the incident in which the Claimant was injured, no reasonable employer would have decided that the Claimant had been negligent. Secondly, the Respondents decided as they did because the Claimant was a "thorn in the flesh of management" due to his repeatedly having raised health and safety issues. This was an assessment that was based on what Mr Mitchell had learnt from Mr Farrell about their attitude to the Claimant.
Further, the tribunal were satisfied that the Claimant resigned principally because of the refusal of IOD benefit. He did so in circumstances where he suspected that he was being refused benefits because of having raised health and safety issues in the past.
The Relevant Law
Section 95(1)(c) of the Employment Rights Act 1996 is the statutory provision which allows for what is known as "constructive dismissal" and it provides:
The correct approach to determining whether or not there has been a constructive dismissal was discussed in the well known Western Excavation case. There, the Court of Appeal stressed the need to remember that it only arises if it can be said that there has been a repudiatory breach of contract. It is not, accordingly, enough simply to observe that an employer has acted unreasonably. That is not, however, to say that the reasonableness or otherwise of an employers' conduct is irrelevant to a consideration of whether or not constructive dismissal has occurred. At one end of the scale, if an employer's conduct has reasonable cause, then the implied duty of trust and confidence will not have been breached and such a dismissal will not have occurred (see: Malik v BCCI SA [1997] IRLR 462 at para.70 per Lord Steyn). Likewise, it must be the case that conduct of an employer which goes to the root of the contract will often if not usually be unreasonable conduct. So long as a tribunal bears in mind that the test is whether the employer is guilty of a breach which goes to the root of the contract or shows that the employer no longer intends to be bound by one or more of its essential terms, it is not wrong of it to look at the question of whether or not the employer acted unreasonably and if he did, to weigh and assess the extent of that unreasonableness. As Lawton LJ put it, in Western Excavation at paragraph 26:
The Appeal
For the Respondents, Mr Hardman began by observing that whether or not that there has been a relevant breach of contract in a constructive dismissal case is a question of fact. That meant that the tribunal were obliged to assess the Respondent's behaviour against the terms of the contract of employment. They should have asked whether the employers were entitled to interpret the condition of the IOD scheme in the way that they did and apply it to the facts in the way that they did. This tribunal had not done that. They had used a "reasonable employer" test instead. Had they used the correct test, they would not have found that there had been a breach because, on the facts of the case, it was open to the Respondents to decide that the incident was brought about by the Claimant's negligence. As against that, Mr Hardman accepted that if the Respondents had declined to pay out under the scheme when they should have agreed to do so, then that would be conduct that went to the heart of the contract of employment and breached the duty of trust and confidence.
Further, the tribunal were perverse to have found that the only reason for the Respondents acting as they did was that the Claimant was a thorn in their flesh. They had not looked properly at the question of whether the Respondents had come to the view that the Claimant was negligent.
For the Claimant, Mr MacKinnon submitted that the tribunal had applied the proper test. They had considered the behaviour of the Respondents and come to the view that it amounted to a fundamental breach of contract. It was not wrong to have considered reasonableness. The scheme itself involved the application of a measure of discretion and it was relevant in that regard. There had been no finding of any causal link between the Claimant's conduct and his injury. The Respondents had acted on an assumption. They had, further, overall and under particular reference to the matter on which Mr Mitchell had given evidence, acted in such an unreasonable fashion as to have fundamentally breached the contract.
Discussion
We are not persuaded that the tribunal erred. As we have already indicated, we take the view that it is not irrelevant per se to consider whether or not an employer's conduct was reasonable when determining a claim for constructive dismissal. It was of particular relevance to do so in this case when considering what the Respondents had done and why they had done it.
The Respondents' decision was reached against a background of circumstances in which it was never determined that the perpetrator of the assault on the Claimant was a participant in the incident which he had encountered in Chapelhall yet it was decided that the Claimant had brought about his own injuries by stopping 50 yards from that incident to telephone the police and remaining in his vehicle with the windows closed facing the direction of the incident through which he had passed. Bearing in mind these circumstances and that if reasonable care has been taken then it cannot be concluded that there has been negligence, we agree with the tribunal when, at paragraph 42, they say:
We note that the tribunal found not simply that the Respondents' assessment of the Claimant as having been negligent was unreasonable but went as far as to find that it was an assessment that no reasonable employer would have made. That is an assessment which we consider that they were entitled, on the evidence, to reach.
It is also of relevance to note that the Respondents' decision was reached in circumstances where, under the scheme, even if an employee has been negligent, they are not bound to refuse payment. The use of the word "may" in clause F2 makes that plain. They have a discretion in the matter. The matter being one of discretion, the Respondents are bound to exercise it reasonably; an unreasonable exercise of that discretion would amount to them refusing payment when they ought not to do so and that, in turn, as was accepted by Mr Hardman, would involve a breach of the duty of trust and confidence.
That was not, however, an end to the tribunal's reasoning. Having found that the Respondents had acted unreasonably in a manner that no reasonable employer would have done, they asked themselves if they could identify why that had happened. On the evidence, they concluded that the Respondents decision was reached, further, in circumstances where, as the Claimant suspected was the case, they were targeting him due to the fact that he had regularly raised health and safety issues with them so as to become a "thorn in the flesh of management". Mr Mitchell's evidence on this matter was regarded by the tribunal as crucial (paragraph 39) and they were entitled, in all the circumstances, so to regard it. It was open to the tribunal to infer, from that evidence together with the Respondents' decision falling below the minimum standards of reasonableness, that the reason the Respondents decided not to pay the IOD was a quite improper one and was, indeed, the reason that the Claimant had suspected was the case. They drew that inference. Having done so, we are readily satisfied that they were entitled to go on and conclude, as (at paragraph 43) they did, that the whole actions of the Respondents amounted to a fundamental breach of contract so as to give rise to an unfair constructive dismissal.
Disposal
In these circumstances, we will pronounce an order dismissing the appeal.