RECEPTEK v Pearce

For constructive dismissal based on the implied term of trust and confidence, the employer’s conduct must be assessed objectively. The relevant question is what the employer did or failed to do, not an undisclosed intention which cannot be inferred from its conduct.

An employer will commonly have reasonable and proper cause to discuss an employee’s unhappiness. The discussion may nevertheless breach the implied term where, in context, it conveys a wish to end the employment and a threat of unjustified disciplinary action. An Employment Tribunal need not analyse the issues formulaically if its reasons, read as a whole, identify the conduct, the absence of reasonable and proper cause, and the employee’s resignation in response.

The claimant was the operations manager of a small business. Following changes to his role and working arrangements, the proprietor met him on 12 August 2011. The Employment Tribunal found that the proprietor wished him to leave and that the claimant reasonably inferred a veiled threat of disciplinary proceedings if he remained.

Employment Judge Sneath, sitting at Hull, held that the employer had fundamentally breached the implied term of trust and confidence. The claimant had therefore been constructively and unfairly dismissed after resigning on 17 August 2011.

The employer appealed. It argued that the Tribunal had relied on the proprietor’s intention rather than conduct, had failed to apply the two limbs of the trust and confidence test, had taken irrelevant matters into account, and had inadequately resolved a conflict of evidence.

1. Appeal dismissed. Read fairly and as a whole, the Employment Tribunal’s reasons showed that it decided the case by reference to the proprietor’s conduct at the meeting on 12 August, rather than merely his undisclosed wish that the claimant should leave.

2. The applicable implied term was that the employer must not, without reasonable and proper cause, conduct itself in a manner calculated or likely to destroy or seriously damage mutual trust and confidence. The formulation in Woods, subsequently adopted in Omilaju, remained binding. Small textual differences in Malik did not alter that test. Whether conduct is calculated or likely to have the relevant effect is assessed objectively from what the employer did or failed to do, including what it said; it does not rest on an undisclosed intention.

3. An employer will often have reasonable and proper cause to explore an apparently unhappy employee’s concerns and their consequences. Context and the manner of the discussion are decisive. Here, the Tribunal had found that the proprietor sought the claimant’s departure and made a veiled threat of disciplinary proceedings for which there was no reasonable and proper cause. It was entitled to regard that conduct as a repudiatory breach.

4. The Tribunal’s conclusions at paragraphs 51 to 56 adequately addressed the relevant questions: the employer’s conduct, the absence of reasonable and proper cause, and the claimant’s resignation in response. A tribunal need not use a formulaic sequence where its reasons sufficiently disclose that reasoning.

5. The earlier workplace events were legitimate context. They were not treated as a cumulative “last straw” case. The meeting on 12 August was the central event. Nor was fuller reasoning required for the finding about access to computer folders, because that factual issue was contextual rather than central.

• Employment Appeal Tribunal: The employer’s appeal against the finding of constructive unfair dismissal was dismissed.
• Employment Tribunal, Hull: Employment Judge Sneath found that the claimant had been unfairly and constructively dismissed. Reasons were promulgated on 3 December 2013.
• Earlier Employment Appeal Tribunal proceedings: The matter had previously been remitted following Mr Pearce v Receptek UKEAT/0553/12/LA (3 May 2013).