Veitch Penny LLP - Exeter | Crediton, Devon

Case

Billington v Michael Hunter & Sons Limited
Employment Appeal Tribunal - (16 October 2003)

Issues

(1) Unfair dismissal
(2) Constructive dismissal
(3) Termination of employment

Facts

Mrs Billington was employed as a Showroom Sales Assistant selling bathrooms and tiles. She was given a written warning following a disciplinary meeting which had been convened to discuss a number of written complaints received from customers.

Two weeks later a further meeting was convened to discuss further allegations of unsatisfactory performance that had come to light. Mrs Billington’s Line Manager told her that if there were any more complaints from customers she “would very likely be dismissed”. She was told that “should she decide that the job was beyond her capabilities” she could resign on “favourable terms” (presumably via a Compromise Agreement). The Line Manager added that he hoped she would be able to improve her performance. Mrs Billington said that she was able to do the job.

Mrs Billington worked on for a while. She received a copy of the minutes from the meeting, and found that they were inaccurate and misrepresented what had occurred. She alleged that it had been made plain to her that she was not wanted. She became ill and submitted her resignation on 29th November 2002.

She then issued a complaint at the Employment Tribunal alleging constructive dismissal, a complaint that centres on the concept of the implied term of trust and confidence.

The Tribunal found that there had been no deliberate act by the employer which had caused a fundamental breach of the implied term of trust and confidence between the employee and employer. Accordingly, the Tribunal rejected her complaint.

Mrs Billington appealed the decision to the Employment Appeal Tribunal. She submitted that the Tribunal had not properly considered whether the employer had conducted itself in a way which is likely to seriously damage or destroy the relationship of trust and confidence between the parties.

Decision

The Appeal would be allowed.

The Employment Appeal Tribunal had to consider:

1. Did the employer conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of trust and confidence between the parties?

If not the case ends. If the answer is yes, a second issue arises.

2. Did the employer do so without reasonable or proper cause?

The Appeal Tribunal in this case answered the first question in the affirmative, taking into account that the invitation to resign was made against the background of the previous issued written warning.

The Employment Appeal Tribunal found that the original Tribunal had failed to consider the issue of whether there had been reasonable and proper cause for the employer to act as it did.

The reference made to the repeated complaints did not address that test, and it did not tell Mrs Billington why she had lost the case. The mere existence of complaints did not mean that there would be a finding of reasonable or proper cause. Accordingly the matter would be remitted to a fresh Tribunal.

Comments

It is often felt that a way of cutting the risk of constructive dismissal is by offering an employee a variety of options (rather than just resignation or dismissal), on the basis that they are not forced to resign but are given a choice between improving their performance or leaving on favourable terms.

However, this case means that employers should tread carefully before offering an employee this sort of choice, instead of following the formal procedure. If a worker is offered an exit package as an alternative to going through the formal procedure (where dismissal is not certain at the end of it) there is a risk that if the package is refused and the worker resigns, the worker may still be able to succeed with a claim for constructive unfair dismissal.