In Frith Accountants Limited v Mrs J Law the relatively narrow questions for the Employment Appeal Tribunal were whether someone who has been constructively dismissed can be held to have contributed to that dismissal, whether the basic award should have been adjusted to take into account the employee’s conduct and whether the assessment at 40% of the prospect of future dismissal was too low.
However, the case is noteworthy since, as observed by EAT President Mr Justice Langstaff, it “may be the first [appeal] case to deal with an alleged contribution by an employee where the breach of contract by the employer was a breach of the implied term of trust and confidence”.
Mrs Law worked in an accountant’s office and was aged 62 at the date of her dismissal. She had performed well at a performance review in 2011 but did not receive a pay rise in 2012 as a result of concerns about her performance. She accepted that she had been late in filing returns with HMRC but thought that this was an easy mistake to have made. She disputed other alleged errors. Instead of treating the matter as one of performance management and undoubtedly unwisely but equally with good intentions, Mr Frith, a principal of the practice, decided to raise his concerns with Mrs Laws’ son. As the Tribunal had said, this was not the way to go about such matters!
Unsurprisingly Mrs Laws was horrified when she found out and she resigned. Equally unsurprisingly the Employment Tribunal found that this was a constructive unfair dismissal. However, even if Mrs Laws had made errors and was unwilling to accept criticisms, these actions could be said to have contributed to the employer’s action in breaching the duty of trust and confidence. Mr Justice Langstaff noted that it will be unusual for a constructive dismissal to be caused or contributed to by an employee, since it is based on a breach of contract by the employer. Further since a constructive dismissal results from a “fundamental” breach of contract by the employer “then not only will it be repudiatory, but by definition there will be no reasonable or proper cause for the employer’s behaviour”. However, although the question of constructive dismissal is answered by seeking to establish a fundamental breach of contract, the question of compensation is dealt with by statute and covers all dismissals, including constructive dismissals.
However, in this case the Tribunal had summarily dismissed the possibility that Mrs Laws had contributed to her dismissal. Mr Frith’s decision to act as he did was “a matter entirely for him”. There was therefore no causal connection between anything done by Mrs Laws and the action taken by Mr Frith which resulted in her dismissal. Mr Justice Langstaff agreed:
As Mr Hainsworth points out, insofar as an employee is suffering by reason of some lack of capability, without any intention on their part, it will be very difficult if not impossible to hold that culpable [or] blameworthy. That is why he pointed out that here what was being relied upon for this argument was a conclusion that the Claimant was in fact refusing to accept blame where it was justified. He pointed out that the Tribunal never reached that conclusion. But more to the point, Mr Frith could not sensibly be said to have had the conversation he did because of her resistance to criticism. Insofar as his motives were genuine, and he wished to understand whether there might be some medical condition from which the Claimant suffered, that had nothing to do directly with this particular aspect of her behaviour. He pointed out that the finding which the Tribunal made could not be said to be perverse in circumstances in which the employer itself had not ever put, or at least there was no evidence it had ever put, a refusal to accept criticism to the Claimant herself. There had been no such mention in a letter containing her performance review of 2012. It was not referred to in the Grounds of Resistance except, en passant, as he put it, in paragraph 2 at page 30 of the bundle. If asked whether, in the context of constructive dismissal, by reason of a breach of this term, the Claimant’s failure to accept criticism in respect of matters which the Tribunal itself downplayed as being of no great significance, which it did throughout both its Judgments generally, fully entitled the Tribunal to conclude that there was no causal contribution upon the robust test which has to be applied. It might perhaps have been surprising if it had reached such a conclusion. But the issue is simply whether it was entitled to, or whether as a matter of law was bound to hold that there must, on the evidence, be some contribution. I could not go that far. It seems to me that, accordingly…the appeal must fail. The Tribunal was entitled to reach the conclusion it did. There was no error of law. The Tribunal approached the matter correctly save that it did not identify the culpable conduct complained of but rather dealt with the matter assuming that that had been made out.
However, the failure by the Tribunal to consider whether there should have been a reduction of the basic award on the just and equitable ground was successfully appealed. This aspect did not require any consideration of causation and the parties agreed a revised sum accordingly.
The appeal on the ground that a 40% chance of future dismissal was too low was, as noted by the Judge, not pursued with any great enthusiasm, and rightly so. It would take a great deal to persuade an appeal court to find that such an assessment was clearly wrong. As Mr Justice Langstaff observed, “It cannot be said with certainty that a percentage of 40 percent or 60 percent or 30 percent is any better than the other”.