(1989)1989AugustΙΟ (A LOIZOU. Ρ. DEMETRIADES. PIKIS,JJ) ELBEECO.LTD., Appellan ts-Respondents, v. SOZOS EFSTATHIOU, Respondent-Applicant (CaseStated No. 249). Wrongdismissal — Variation ofcontract of employment byemployers — Implied acceptance of variation (which was a temporary duration and involved only an insignificant change in salary) by accepting payment of emoluments for the next two months — Treating variation as constructive dismissal— In the circumstances, the employee had no such right. 5 The applicant-respondent was being employed by the appellants as salesman. The terms of the employment were embodied in a Collective Agreement In October 1984 the appellants informedthe respondent that during the winter period he would be employed as 10 replacement salesman. The Collective Agreement did not provide for such a right, but in a note to the table of basic salaries, to which there isan express reference in the Collective Agreement, the case of conversion fromsalesman to replacement salesman ismentioned. In any event, thechangeinvolvedanisignificantamount,asfarasthe 15 salary is concerned. The respondent accepted payment of salary without protestforOctoberandNovember, butwhen hewasoffered his 13thsalary, he protestedand treatedthe changeasaconstructive dismissal. He lefthis work andapplied fordamages totheIndustrial Disputes 2 0 Court. The lattergavejudgment fortheapplicant. Hence this appeal by way of casestated. Held, allowing theappeal, Pikis,J. dissenting:
(1)On the factsofthis case and in particular in the light of the aforesaid note, the respondents have not committed a breach of the contract of 25 employment. 448 1C.L.R. Elbee Co. Ltd. v. Efstathiou
(2)Inanyevent,sincetherespondent hadacceptedthevariation of the contract, he was not entitled to treat the conduct of his employersasamountingtoconstructivedismissal. Appealallowed.Noorderastocosts. 5 Casesreferredto: WesternExcavating(E.C.C.)Ltd. v. Sharp[19781 Q.B. 761; MillbrookFurnishingIndustriesLtd. v.MclntochandOthers
(1981)1 RCR309; IV. E. CoxToner(International)Ltd. v.Crook
(1981)l.C.R. 823; 10 InReHjiCostas
(1984)1 C.L.R.513; Stylianidesv. Paschalides
(1984)1 C.L.R. 49; Bracegirdlev. Oxiey[1947]1 K.B.349; Bashirv. BrilloManufacturingCo.
(1980)1 R.L.R.284; Stokesv. HamsteadWineCo.Ltd
(1979)1 R.L.R.
- 15 Casestated. Case stated by the Chairman of the Industrial Disputes Court relativetohisdecisionofthe29thNovember, 1986inproceedings under the Termination of Employment Law, 1967 (Law No. 24/ 67) instituted by Sozos Efstathiou against Eteria Elbee Ltd. 20 whereby the respondent wasordered topay damages and wages inlieu of notice. K.Michaelides,for the appellants. A. Scordis, for the respondents. Cur.adv. vult 25 A.LOIZOU P.:This isan appeal by way of case stated by the IndustrialDisputesCourtinCaseNo.6/85,inwhichjudgmentwas delivered on the 29th November
- This is the majority judgment(A.LoizouP.andDemetriadesJ.).H,H.Pikiswilldeliver hisdissenting judgment. 30 .Thefacts ofthe case asfound bytheCourt areas follows: The appellant Company, hereinafter to be referred to.as the Company, is a company of limited liability and is an agent and distributorof soft drinks inLimassoland the Limassol district. 449 A. Loizou P. ElbeeCo. Ltd. v. Efstalhiou
(1989)The applicant (respondent in the appeal) hereinafter to be referred to as the employee was employed by the Company on the8th October 1979,originallyasareplacementsalesmanforthe sale and distribution of soft drinksand inparticular of Coca-Cola drinks, and as from May 1980 as a salesman, with such 5 remuneration as was provided for inthe Collective Agreementof the Soft Drinks Industry which byvirtue of article 23thereof also extends to sales depots. There were no individual contracts of employment between theCompany and itsemployees. The Companyoccasionally, duringthewintermonths,when its 10 business was low, would modify or decrease the itineraries in accordance with its requirements and would also change the duties of a number of salesmen into those of replacement salesmen inorder that according toitsallegation, itwould not be obliged to dismiss any personnel due to the fall of any seasonal 15 demand. In or about October 1984, the employee was informed that during the winter period which, depending on the weather conditions, would last untilthe 1stof March, orthe latest until the 1st of April, he would be performing the duties of a replacement 20 salesman. The employee worked as a replacement salesman during November 1984 atthe end of which he waspaid thebasic salaryofareplacement salesman pluscostoflivingallowanceand other benefits. He did complain aboutthistohisTrade Union,but continued toworkassuch alsoduringthemonth ofDecember.On 25 the21stof Decemberashis13thsalarywascalculated onthebasic salary of a replacement salesmanpluscostof livingallowance, he refused to collect itashe didnotwish toworkassuchand demanded,ifhewastocontinuetoworkasareplacementsalesmantobe paidthesalaryofasalesman,otherwisetobereinstatedtothepost 30 ofsalesman. He considered astheCompany didnotcomplywith this that this amounted to constructive dismissal and on the 2nd January 1985 he did not turn up for work but telephoned the Company and informed them that he would file a Court action againstthem, and thereafter herefused toreturn towork. 35 The Company wrote to him on the 3rd ofJanuary tothe effect thatsincehisrefusal toworkhadbeen considered asaresignation, itwasaccepted as from the 2nd January 1985.He replied on the 5thJanuary 1985that he considered theattitudeofthe Company as amounting to constructive dismissal and filed as a result an 40 450 1C.L.R. ElbeeCo.Ltd.v.Efstathiou A.LoizouP. application to the Industrial Disputes Court which was accepted forthereasonthatitwasconsideredthattheunilateralalterationof the basic terms of the Collective Agreement by the Company which would have continued for about sixmonths -constituted a 5 breach of an essential term amounting thus' to constructive dismissal and furthermore that he rightly terminated his employment with the Company as he was not bound by its previousconduct vis-a-visother employees. By the above case stated the following questions of law were 10 formulated bytheJudge of the said Court: 1.Whether the Court onthe evidence before itwrongly accepted that the change of duties of the applicant from a salesman to a replacement salesman constituted conduct amounting tr constructive dismissal. 15 2. Whether the amountsof remuneration adjudicated by the Court tothe applicant were wrongly assessed. 3. Whether the Court wrongly decided that the applicant was entitled to payment of wages in lieu of notice since though the respondent had notified the applicant of the change of duties in 20 October 1984,he left their employment inJanuary 1985. Counsel for the Company, submitted that there had been no breachbytheCompany regardingthecontractof employmentof this particular employee as it is incorporated in the Collective Agreement, but that he had left voluntarily, and thateven ifthere 25 hadbeen abreachsuchhadtobeofafundamental kindinorderto entitle him toterminate hisemployment. Itwasargued that inthe first place, though not expressly provided for in the Collective Agreement there was a practice which was followed for a great number of years and which had been accepted by the Trade 30 Union. Secondly, as regards thisparticular employee, he had worked forpracticallytwomonthsunder the«varied»contractand inview of the fact that the variation was temporary, that is of four or maximum five months, inview of the material advantages which 35 this person obtained and the insignificant overall loss, it was submitted that he must be taken to have elected to affirm the varied contract. 451 A. LoizouP. ElbeeCo.Ltd.v. Efstathiou
(1989)Counsel ior the appellant Company relied for support on the case of Western Excavating (E.C.C.) Ltd., v. Sharp [1978] Q.B. 761,whereitwassaidatp.769byLordDenningM.R.asfollows: «If the employer isguilty of conduct which is a significant breach going to the root of the contract of employment, or 5 whichshowsthattheemployernolongerintendstobe bound byone or more of theessentialtermsof thecontract,then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer's conduct. He is 10 constructively dismissed. The employee is entitled in those circumstancestoleaveattheinstantwithoutgivingany notice atall,oralternatively,hemaygivenoticeandsayheisleaving attheendofthenotice.Buttheconduct mustineithercasebe sufficiently serious to entitle him to leave atonce. Moreover, 15 he mustmake up hismindsoon after theconductofwhich he complains: for, ifhe continues for any length of time without leaving,he willlosehisrighttotreathimselfasdischarged. He willbe regarded as havingelected toaffirm the contract». Similarly in the case of MillbrookFurnishingIndustries Ltd., v. 20 Mcintosh and Others
(1981)IRLR 309, at p.311 itwas stated as follows: «We can accept that ifan employer, under the stresses of the requirements of his business, directs an employee to transfer to other suitable work on a purely temporary basis 25 and at nodiminutioninwages,thatmay,intheordinarycase, notconstituteabreach ofcontract.Butinsayingthat,wethink it must be clear that the word 'temporary' means a period which iseitherdefined asbeingashortfixedperiod,orwhich, as in the Aveling Barfordcase, isin itsnature one of limited 30 duration». If the intention of the employer isto preserve the jobs of his employees the breach may not be of the type which entitles his employees to treat the contract at an end. Whether or not it is a repudiatory breach depends on itsnature and the circumstances 35 ofthecase.Relevant iswhatwassaidintheMillbrookcase (supra) at p.312: «This requires one to look at the intentions of the party in breach of the contract. In the context of cases where two 452 1C.L.R. 5 ElbeeCo.Ltd.v.Efstathiou A. LoizouP. partiesare; opendisagreementastotheproper construction of a contract, ithasbeen heldthatthe mere insistence by one party on his construction of the contract, albeit at the end of the day found to be mistaken, does not constitute a repudiatory breach: see tVoodar Investment Development Ltd., v. Wimpey Construction U.K.Ltd.
(1980)1WKR 277 applied in an employment context in Frank Wright & Co., (Holdings)Ltd. v.Punch
(1980)IRLR217». Also in the case of W. E. Cox Toner (international)Ltd., v. 10 Crook
(1981)I.C.R. 823,itisstated at p,831: 15 «Tostayatworkforaperiodofonemonth to 'look around' starting from the initialbreach ofcontract mightwellnot have been fatal:buttoworkforafurther month,sixmonthsalready having elapsed, seems to us inconsistent with saying that he had not affirmed the contract». Inthepresent caseweconsiderthatonthefacts asstatedbythe trial Court wrongly accepted that the conduct of the Company amounted tobreach.Though,asstatedabove,itwasnot expressly providedforinthetermsoftheCollectiveAgreement,inthetables 20 °f basic salaries and commissions paid, attached thereto and to which expressreference ismade inArticle3 thereof, itisstated in the form of a note that salesmen and/or drivers who will be converted into replacement salesmen, who were in the employment of the Company on the 31st December 1968 will 25 receivethebasicsalaryincreased bytwo pounds. Since the Collective Agreement containing this provision was signed as a whole by the Trade Unions, this provision is thus deemed to be incorporated therein and has become part and parcelofthe Agreement. 30 Consequently, we do not consider that the Company was in breach of any of the terms of the Collective Agreement by temporarilychangingthedutiesofthisemployee,asitdid,butthat ithad acted within the framework ofthe agreement. But even if such conduct by the Company were to be 35 considered as being a variation of the terms of the Collective Agreement nonetheless it was for a temporary and practically definite duration -that is until the 1st March or the latest the 1st April - and the overall monetary loss, if any, was insignificant. Furthermore the employee continued to work for almost two 453 Λ. Loizou P. ElbeeCo. Ltd. v. Efstathiou
(1989)months before deciding to treat his contract of employment as having been repudiated and this only after his demands which were made for thefirst timeatthe end of December,beginning of January, were notmet by his employers. On the authorities cited above, we consider thatinany case he 5 was not entitled to treat the conduct of his employers as* amounting to constructive dismissal, since for all intents and purposes heeven acceptedtheoffending variationofthecontract. In view of the above conclusion there is no need for us to examine questions 2 and
- 10 In the result and for the reasons stated above the appeal succeeds. Inthecircumstances,however, therewillbenoorderastocosts. PIKIS J.: From 1.1.89 all my judgments were delivered in Greek.Thedecision inthiscase istheonlyexception. Mybrethren 15 have delivered the majority judgment in English. As I differ, I shall givea separate judgment. Intheinterest of uniformity of language I,too,shall deliver myjudgment in English. The power of the Supreme Court to review by way of appeal cases stated by the Arbitration Tribunal, is confined to pure 20 questions of law. What amounts to a question of law as distinct from a question of fact or a mixed question of law and fact, was debated in a number of decisions of this Court, including In Re HjiCostas* and Stylianides v. Paschalides.**Also the subject is illuminated by numerousEnglish decisions.*** Theapplication of 25 the law to a given set of facts can be properly classified as a question of law. A clear perspective must be kept of the line dividing questions of law and questions of fact. Our reviewing powers are confined tothe former. The appellants are distributors of soft drinks, namely Coca- 30 Cola. They employed the respondent as a salesman. InOctober, 1984, after four years service inthat capacity, the respondent was relegated for a foreseeable period of five - six months to an assistant salesman; a demotion that entailed change of duties, diminution of status, as well as a small lossof income amounting 35 '(1984HC.LR.
- "
(1985)1C.L.R.
- '" (See, interalia, BRACEGIRDLEV. OXLEY[l947} 1 KB. 349). 454 IC.L.R. ElbeeCo.Ltd.v.Efstathiou A.LoizouP. between four and five pounds a month.The employers changed the terms of hisemployment unilaterally, without reference to or prior consultation with the respondent. There was no warrant for the change inthe contract of employment, founded, asitwas, on 5 the terms of a collective agreement negotiated between employers and the union representing employees in the trade. The respondent objected to the change of the terms of his employment. The objection was raised through his union, the established channel for the ventilation of complaints of workers 10 against management. He did not resign immediately; he awaited the outcome of his protestations. Thus he served in November. 1984, the month immediatelyfollowing the communication ofthe change, as assistant salesman and drew the emoluments paid to that category of personnel. Nevertheless, he persisted in his 15 protestationsandlefttheemployment oftheappellantsassoonas he was informed that his objections were dismissed. The appellants made their position known towards the end of December, whereupon the respondent refused to accept the salary ofassistant salesman and submitted hisresignation asearly 20 aspossible thereafter, on 2.1.
- The respondent had recourse to the Arbitration Tribunal that vindicated his claim for constructive dismissal. The Court found that the employers had changed the terms of employment unilaterally, contraryto and inbreach ofthetermsof the contract 25 ofemployment. Atthe requestoftheappellants the Courtstateda case for the decision of the Supreme Court revolving on the implications ofthe primary findings of the Court. Among the questions we are asked to resolve, is the question whether the practice followed in the trade of distribution of soft 30 drinks to downgrade occasionally salesmen to assistant salesmen during the wintermonthswhen businesswasatitslowest, should be deemed to be incorporated and form part of the contract of employment, and whether the acceptance by the respondent in the month following thevariation ofthe termsofthe employment 35 of the emoluments that were payable to assistant salesman, constituted acquiescence on hispart to the changes made by his employers. The appellants argued that seasonal variations in the duties of the personnel of distributors of soft drinks should be considered to be part of the contract of employment. Also they 40 submitted that the conduct of the respondent following the changes, signified acquiescence on hisparttothe decision of the 455 A. LoizouP. Elbee Co.Ltd. v.Efstathiou
(1989)t·rnpioyvrs,dir..rulinghimfromprotestingthereafter. The change ... the duties of the respondent, on the other hand, was so slight andinsignificant -theemployersargued-astoleavenonoticeable effects on the contract of employment. Before answering the questions raised, Imust emphasize that thereisno finding thatthepracticeinthetrade,theuniformity and effect of which were not identified, was made part of the contract of employment. On the contrary, the onlypertinent finding isthat thetermsof employment oftherespondent weresolelygoverned bythe contract of employment. 5 *® The motives of the employers, in effecting the variation in the terms of the contract of employment of personnel, are not in themselves relevant {Millbrook Furnishing Industries Ltd. v. Mcintosh and Others
(1981)R.L.R. 309). Nonetheless, we may note in passing that the relegation of the respondent to assistant 15 salesman wasnotwhollyunconnected withthe disapprovalofthe employers of the level of efficiency of the respondent and certain traitsinthe discharge of hisduties. The caselaw establishes that unilateral changes in the termsof the employment introduced at the instance of the employer, 20 entitle the employee to treat the contract as broken and seek damages for dismissal; provided that the variation is not insignificant orsuchasitcouldbedeemed tobepartofthe custom in the trade. Whenever the variation strikes at the root of the contract or entails a breach of a material term of it, itentitles the 25 employee to treat the contract as atan end and seek damages for constructive dismissal. Another test that has been propounded isto cast an objective glanceonthecontractualsituationandtreatthecontractasbroken by the employer whenever thechangesaresuch astoreasonably 30 entitledthe employee totreatthecontractasatanend (thesubject isdiscussed and relevant caselaw reviewed, inLabour Law Cases and MaterialsbyElias,Nappier and Wellington). One's employment istheprincipalavenueforthe expressionof his creativity; whereas his status and duties at work are directly 35 . associated with his self-esteem and scope for creative work. The duties of an assistant salesman, within the context of the employment of the respondent, were different from those of a 456 1C.L.R. ElbeeCo. Ltd. v. Efstathiou A. LoizouP. salesman; particularly intermsof responsibility and initiative. The tasks of anassistant salesman were wholly subordinatetothoseof a salesman and superior personnel. Responsibility for the promotion of the sales of soft drinks rested primarily with 5 salesmen. The changes affecting the terms and conditions of the employment of therespondentwere contractuallyand objectively material. Ineffect, he was required to carry out duties other than the ones he stipulated for. In the case of Bashir v. Briilo Manufacturing Co.* itwas held thatthe downgrading or lowering 10 of the status of an employee in breach of the terms of his employment, amounted to a breach of a material term of the agreement, entitling the employee to treat the conduct of the employer as an act of dismissal. The case of Millbrook, supra, serves to illustrate the importance of the terms of the contractof 15 employment and the weight that the worker may legitimately attach tothemas defining thecontextof his employment. The loss of income, limited though it was, augmented the breach.Thefindings of theArbitration Tribunaldisclose amaterial breach of the contract of employment on the part of the 20 employers. Inthose circumstancesthe employee could justifiably treat thecontracthe originally entered intoas atan end. The next question we must answer is whether the respondent had acquiesced to the changes by accepting to serve as assistant salesman. The case of Stokes v. Hamstead Wine Co. Ltd.** 25 suggests that an employee who is wronged in the context under consideration, need not lay down his tools, so to say, and walk away themomentthatthewrong occurs.Hemay protestandmay stay on course inanticipationof the outcomeof his protestations. This is a reasonable approach; in fact, a desirable one given the 30 present-day realities of industrial relations. Itisnot unreasonable for a worker to await for a reasonable time the response of his employers to his objections. In this case the respondent left his employment soon after his objections were dismissed. The time :hatelapsed untiltheviewsoftheemployers tohisobjections were 35 madeknown,was notunreasonably long.These findings made,in myview,inevitable theconclusion of theArbitration Tribunalthat therespondentwas constructively dismissed. Consequently, Iwould, for my part,dismiss the appeal. . „ZT •
(1980)1R.L.R. 284. 40 •*{1979)IRLR 297 Appeal allowed by . .. _ Λ / majonty without costs. 457