Aberdeen City Council v McNeill

JurisdictionScotland
JudgeLord Drummond Young,Lord Eassie,Lord McGhie
Judgment Date28 November 2013
Neutral Citation[2013] CSIH 102
Docket NumberXA61/10
Date28 November 2013
Published date28 November 2013
CourtCourt of Session (Inner House)

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

[2013] CSIH 102

Lord Eassie

Lord Drummond Young

Lord McGhie

XA61/10

OPINION OF LORD EASSIE

in an appeal under section 37(1) of the Employment Tribunals Act 1996

by

TOM McNEILL

Appellant;

against

ABERDEEN CITY COUNCIL (No.2)

Respondents:

_______________

Act: Napier, QC, McCrossan, Solicitor Advocate; Lefevre Litigation

Alt: Sandison, QC; Brodies

28 November 2013

[1] I am grateful to Lord Drummond Young for the very full Opinion which he has prepared in this appeal from the Employment Appeal Tribunal. I agree with him, and for the reasons given by him, that the appeal succeeds and that the decision of the Employment Tribunal should be restored. I would simply confirm that in so far as Lord McGhie may favour a different approach to the interpretation of section 95(1)(c) of the Employment Rights Act 1996 - which concerns "constructive dismissal"- from that of Lord Drummond Young, I prefer the view of Lord Drummond Young to the effect that the provision requires the employee's right to terminate the contract without notice by reason of the employer's conduct to be determined in accordance with the proper law of the contract of employment in question.


EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

[2013] CSIH 102

Lord Eassie

Lord Drummond Young

Lord McGhie

XA61/10

OPINION OF LORD DRUMMOND YOUNG

in an appeal under section 37(1) of the Employment Tribunals Act 1996

by

TOM McNEILL

Appellant;

against

ABERDEEN CITY COUNCIL (No 2)

Respondents:

_______________

Act: Napier, QC, McCrossan, Solicitor Advocate; Lefevre Litigation

Alt: Sandison, QC; Brodies

28 November 2013

Introduction
[2] The appellant was employed by the respondents for a period of 21 years prior to 27 July 2006, working in the field of leisure management.
Latterly he held the post of Sport and Recreation Manager (North); this involved responsibility for a number of locations in the city and for approximately 500 members of staff. On 27 July 2006 the appellant tendered a letter of resignation from his employment with the respondents. He then lodged a claim for unfair dismissal with the Employment Tribunal in Aberdeen, alleging that in terms of section 95(1)(c) of the Employment Act 1996 he was entitled to terminate his contract of employment without notice by reason of the respondents' conduct. The result, he claimed, was that his resignation amounted to a constructive dismissal by the respondents.

[3] The background to the appellant's resignation is set out at some length in the judgment of the Employment Tribunal. It is unnecessary for present purposes to give more than a fairly brief summary. Some time prior to the appellant's resignation there had been a history of disagreements within the respondents' Leisure Department relating to the management of leisure facilities: whether they should be managed according to traditional municipal practices or on a more commercial basis. The appellant favoured a more commercial approach; others, including the investigating officer who considered the complaints against him, had favoured a more traditional approach. The appellant was a third-tier manager, and reported at first-tier level to his Corporate Director, the Director of Neighbourhood Services (North). In January 2005 a senior manager within the Leisure Department was suspended as a result of allegations of financial misconduct. Subsequently, complaints were made about that manager's relationship with another employee in the respondents' Leisure Department, GP. The appellant had reported concerns about this relationship to the respondents' Chief Executive. He made allegations regarding two specific incidents involving the senior manager and GP that he claimed to have witnessed. In that connection he made a statement to the disciplinary investigation that had been set up to consider the senior manager's conduct. Thereafter, the appellant discussed the statement that he had made to the investigation with other employees in the Leisure Department, including his own line manager. The line manager became concerned about those discussions. GP heard about the discussions, and in August 2005 she made a complaint in writing about the appellant's conduct, in particular his discussing the allegations with other members of staff. The complaint was passed to the appellant's immediate line manager, who decided to suspend him pending a disciplinary investigation. The reasons for the suspension and disciplinary investigation were found by the Employment Tribunal to be unclear (paragraph 18 of their decision). The appellant was suspended on 16 August 2005, and his suspension was confirmed by letter dated 17 August. The letter stated that the suspension was "precautionary", without assumption of guilt, pending investigation of two specific allegations: first, that the appellant had breached the confidentiality of an investigation interview when he was interviewed as a witness in relation to the complaint against the senior manager; and secondly, that he had made remarks among colleagues that were defamatory and undermined the position of a female colleague, obviously GP.

[4] Thereafter the appellant's conduct was considered by an investigating officer, who was the Assistant to the respondents' Chief Executive. The investigation was prolonged, and the allegations made against the appellant increased as it progressed. I deal with this aspect of the case in considering the appellant's second ground of appeal (paragraphs [36] et seq). The investigation continued into 2006, and the appellant became concerned at the manner in which it was proceeding. On 27 July 2006 he wrote to the respondents to tender his resignation, giving the following reasons:

"1. I have no trust in the Council as my employer.

2. The unfair way I have been treated.

3. The damage to my health and well-being.

4. The irreversible damage done to my career, integrity and reputation.

5. The breach of Council procedures.

6. Lack of information about and the process regarding assimilation".

The appellant then submitted a claim to the Employment Tribunal for unfair dismissal, in which he alleged that he had been constructively dismissed by the respondents. He contended that the manner in which the investigation of his conduct had been conducted amounted to a breach of the respondents' duty of trust and confidence towards him, and that on that basis he was entitled to treat the respondents' conduct as constructive dismissal and to claim compensation accordingly.

[5] After a hearing conducted over 22 days between 11 July 2007 and 20 February 2008 the Employment Tribunal (Employment Judge I McFatridge, Ms J Chalmers and Mr D Cameron) found that the manner in which the respondents had investigated the complaints of misconduct against the claimant amounted to a breach of their duty of trust and confidence. They accordingly held that the claimant had been constructively dismissed and that the dismissal was unfair. He was therefore entitled to a basic award and a compensatory award. The latter award was reduced by 50% owing to the claimant's contribution by his conduct to his dismissal; that reduction was made under section 123(6) of the Employment Rights Act 1996. The Tribunal did not, however, go so far as to find that the appellant was guilty of gross misconduct.

[6] On 4 February 2010 the Employment Appeal Tribunal (Lady Smith, Miss J Gaskell and Mrs A Hibbard) allowed the respondent's appeal, revoked the decision of the Employment Tribunal and substituted a decision dismissing the appellant's claim. The Appeal Tribunal held that the appellant was guilty of gross misconduct. That was a material breach of his contract of employment. In accordance with the Scottish doctrine of mutuality of contractual obligations, the appellant was disabled by his breach of contract from calling upon the respondents to adhere to their contractual obligation of trust and confidence in relation to the investigation. Consequently the appellant could not treat the manner in which the respondents had investigated his conduct as a repudiation of the contract entitling him to resign without notice, and he had not been constructively dismissed. The Employment Appeal Tribunal further held that in any event the respondents' investigation did not amount to a breach of contract.

[7] The Employment Appeal Tribunal refused leave to appeal against their decision, but on 29 January 2013, this court granted leave to appeal. The appellant now accepts that he was guilty of gross misconduct. Nevertheless he appeals on two cumulative grounds. First, he contends that the doctrine of mutuality of contractual obligations is of no relevance in determining whether he was entitled to resign without notice and was thus constructively dismissed. Secondly, he contends that the Employment Appeal Tribunal were not justified in interfering with the Employment Tribunal's assessment of the respondents' investigation. He must succeed on both grounds in order for the Employment Tribunal's decision in his favour to be restored.

Ground 1: Section 95(1)(c) and the doctrine of mutuality of contractual obligations
[8] Constructive dismissal of an employee is dealt with in section 95(1)(c) of the Employment Rights Act 1996.
This provides as follows:

"95. Circumstances in which an employee is dismissed

(1) ... an employee is dismissed by his employer if...

(a) the contract under which he is employed is terminated by the employer (whether with or without notice),

...

(c) the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct."

Strictly speaking, what the employee is entitled to do is to terminate the obligation to give further performance of his substantive obligations under the contract, a matter discussed at paragraphs [23] - [25] below....

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17 cases
  • A v B: 1801568/2016
    • United Kingdom
    • Employment Tribunal
    • 3 November 2021
    ...instead making the decision (from 11 November 2015) to use the disciplinary policy instead. In McNeill v Aberdeen City Council (No. 2) [2013] CSIH 102, it was held that the obligation of trust and confidence is not suspended or put in abeyance because one party has broken that obligation. T......
  • Ted Jacobs Engineering Group Inc V. Robert Matthew Johnston-marshall And Partners And Others For Orders Of Section 1 Of The Administration Of Justice (scotland) Act 1972
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    • Court of Session
    • 6 February 2014
    ...is rescinded. Retention thus functions as a form of security for performance of the contract: see McNeill v Aberdeen City Council, [2013] CSIH 102. It does not have the effect of releasing the party who is not in breach from any part of the contract other than the duty to give performance, ......
  • Stobart Group Ltd v William Andrew Tinkler
    • United Kingdom
    • Queen's Bench Division (Commercial Court)
    • 15 February 2019
    ...remarks, even if made only once, can amount to “gross misconduct”. It relies upon the Scottish case of McNeill v Aberdeen City Council [2015] ICR 27, at [32]. I note, however, that the sexist remarks in that case were made to colleagues in the same workplace, and made about at least one oth......
  • Mr D White v Forest Master Ltd: 2500220/2023
    • United Kingdom
    • Employment Tribunal
    • 27 November 2023
    ...by the employer and end the contract -Atkinson v Community Gateway Association 2015 ICR 1, EAT. 128. In Aberdeen City Council v McNeill 2015 ICR 27 the claimant committed acts of gross misconduct, including sexual harassment and being intoxicated at He claimed constructive dismissal in rela......
  • Request a trial to view additional results
3 books & journal articles
  • The Mutuality of Obligations Doctrine and Termination of the Employment Contract: McNeill v Aberdeen City Council (No 2)
    • United Kingdom
    • Edinburgh University Press Edinburgh Law Review No. , May 2014
    • 1 May 2014
    ...of the Inner House in McNeill v Aberdeen City Council (No 2) 1 1 [2013] CSIH 102, [2014] IRLR underscores the extent to which the doctrine of mutuality of contractual obligations in Scots contract law occupies vital territory in the Scots common law regulating the termination of the contrac......
  • The Mutuality and Enforceability of the Employment Contract: Sunrise Brokers LLP v Rodgers
    • United Kingdom
    • Edinburgh University Press Edinburgh Law Review No. , May 2015
    • 1 May 2015
    ...work-related obligations. The question is: what happens next? In Scots law, the answer is clear.7 7 See McNeill v Aberdeen City Council [2014] IRLR 113. That is to say that the operation of the “mutuality of obligations” doctrine – which is an expression of the exceptio non adimpleti contra......
  • Examining “Equitable” Retention
    • United Kingdom
    • Edinburgh University Press Edinburgh Law Review No. , January 2016
    • 1 January 2016
    ...retention based on the mutuality principle is also equitable in nature.4646Gloag, Contract (n 8) 627; McNeill v Aberdeen City Council 2014 SLT 312 per Lord Drummond Young at para [30]. As such, it is submitted that the term “special retention” should be used to distinguish between this type......

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