MacKenzie v Billing Aquadrome Ltd

An employment tribunal must determine the issues fixed by an appellate remittal, even if it considers the remittal order or the underlying analysis unsatisfactory. Where no actual dismissal is found, and the case has been remitted on the basis that the employee resigned, the tribunal must decide whether the resignation was caused by a fundamental breach of contract. A claimant may succeed on a pleaded alternative which conflicts with his own evidence. The objective character of words or conduct as a resignation is distinct from the claimant’s later denial of resignation. For causation, the relevant question is what caused the words amounting objectively to a resignation, not how the claimant later characterised them.

The employee’s employment ended after a dispute concerning changes to his commission arrangements. He advanced an actual dismissal case, with constructive dismissal pleaded in the alternative. An Employment Tribunal initially dismissed the claim, finding no dismissal. On an earlier appeal, the case was remitted to determine whether the employment ended by dismissal or resignation and, if by resignation, whether the resignation was constructive dismissal.

On remission, the Tribunal found no actual dismissal on 4 February 2007 but declined to decide whether the resignation was caused by a fundamental breach, holding that the employment might have ended later. The employee appealed against that decision and against the refusal of recusal. The central issues were whether the Tribunal had failed to comply with the remittal and what consequential order should follow.

1. Substantive appeal allowed. The Employment Tribunal had found no actual dismissal on 4 February 2007. On the basis of the earlier remittal, that finding meant that the employee had resigned on that date. The Tribunal was therefore required to determine whether the resignation amounted to constructive dismissal.
2. The Tribunal erred in law by declining to decide whether the resignation was caused by a fundamental breach of contract. The issues had been fixed by the earlier appellate order, and the Tribunal was bound to determine them whether or not it considered the underlying analysis correct.
3. A claimant’s denial that he resigned does not prevent a tribunal from finding objectively that his words amounted to a resignation. A claimant may succeed on a pleaded alternative inconsistent with his own evidence. The relevant causation question is whether the words objectively constituting the resignation were uttered because of the employer’s fundamental breach. A subsequent denial or disagreement about the legal characterisation of those words does not answer that question.
4. The earlier Tribunal’s observation that the employer’s conduct was likely to damage trust and confidence was obiter and insufficiently reasoned to establish a fundamental breach. The issues of breach and causation therefore had to be considered together on remission.
5. The recusal appeal was dismissed as academic. The case was remitted to a differently constituted Employment Tribunal, on the basis that the employee resigned on 4 February 2007, to determine whether that resignation was caused by a fundamental breach of contract within section 95(1)(c) of the Employment Rights Act 1996.

• Employment Appeal Tribunal: On the earlier appeal, the Employment Tribunal’s finding of no unfair dismissal was set aside and the case was remitted for determination of whether the employment ended by dismissal or resignation and, if by resignation, whether there was constructive dismissal.
• Employment Tribunal: On remission, found no actual dismissal on 4 February 2007 but did not determine constructive dismissal.
• Employment Appeal Tribunal: Allowed the substantive appeal, dismissed the recusal appeal as academic, and remitted the constructive-dismissal issue to a differently constituted Tribunal.