W A Goold (Pearmak) Ltd v McConnell & Anor

Factual and Procedural Background

The Employers, engaged in the wholesale distribution of watch attachments and jewellery sundries, employed two Employees as salesmen on a salary and commission basis. Changes in the retail sector and the ill-health of the managing director led to declining stock control and administration. In July 1992, a new manager was appointed to reorganise the business. The Employees experienced a drop in their take-home pay and sought redress from management, which was not adequately addressed. After unsuccessful attempts to resolve the issue, including legal advice and a letter threatening a claim for constructive dismissal, the Employees ultimately resigned, claiming constructive dismissal.

The Industrial Tribunal at Leeds held a three-day hearing and found in favour of the Employees, upholding complaints of unfair dismissal. The Employers appealed this unanimous decision.

Legal Issues Presented

1. Whether the Employers were in serious breach of their contractual obligations to justify the Employees' resignation as constructive dismissal.
2. Whether the failure to provide and implement a grievance procedure constituted a breach of contract.
3. Whether the Employees waived their right to claim constructive dismissal by continuing to work after assurances from management.

Arguments of the Parties

Appellants' Arguments

• The Tribunal erred by not specifying the exact contractual term breached by the Employers.
• It is improper for a losing party in an Industrial Tribunal to be unclear about the basis of the decision against them.
• The Tribunal may have wrongly assumed that all reasonable employer conduct is contractual.
• The Employees waived any breach by remaining at work after the manager’s assurance to address the issue, thus losing the right to resign on grounds of constructive dismissal.

Respondents' Arguments

• Whether there was a breach of contract and whether it was fundamental are factual questions for the Tribunal.
• The question of acquiescence by the Employees is also a matter of fact.
• Relied on Court of Appeal authorities to support the Tribunal’s findings: Woods v M W Car Services (Peterborough) Ltd [1982] ICR 693 CA and Pedersen v Camden London Borough Council [1981] ICR 674.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Woods v M W Car Services (Peterborough) Ltd [1982] ICR 693 CA	Determination of breach of contract and fundamental breach in employment context.	Supported the Tribunal’s role in factual determination of breach and its seriousness.
Pedersen v Camden London Borough Council [1981] ICR 674	Principles relating to breach of contract and employee resignation.	Reinforced that breach and acquiescence are factual matters for the Tribunal.

Court's Reasoning and Analysis

The court accepted the Tribunal’s identification of a breach of contract based on the Employers’ failure to provide a proper grievance procedure, which was implied by statutory requirements under the Employment Protection (Consolidation) Act 1978. The Tribunal found that the Employers’ failure to address the Employees’ grievances promptly and reasonably amounted to a breach of contract. The court noted that the right to a grievance procedure is fundamental for maintaining good industrial relations and that the Employers’ neglect led to frustration and justified resignation by the Employees.

The court rejected the Employers’ argument that the Tribunal should have specified the exact contractual term breached, finding that the implied term regarding grievance handling was clear from the Tribunal’s reasoning. Furthermore, the court held that the Employees did not waive their right to resign by continuing to work after assurances from management, because the breach was continuing and the Employees’ frustration grew until they resigned.

The court concluded that the Tribunal did not misdirect itself and that the appeal raised no real arguable point of law.

Holding and Implications

The court DISMISSED the Employers’ appeal.

This decision upholds the Industrial Tribunal’s finding that the Employers were in breach of contract by failing to provide and implement a grievance procedure, justifying the Employees’ constructive dismissal. The ruling affirms the importance of grievance procedures as an implied term of employment contracts and confirms that failure to address grievances can constitute fundamental breach. No new precedent was set; rather, the decision applied established principles to the facts.