England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
CIVIL DIVISION
ON APPEAL FROM THE HIGH COURT
EMPLOYMENT APPEAL TRIBUNAL

		The Royal Courts of Justice The Strand London Friday 31 May 2002

Friday 31 May 2002

1. LORD JUSTICE MUMMERY: This is a renewed application for permission to appeal. The application is made by Mr Davison on behalf of Ms Maureen Fitzgerald. The application for permission to appeal relates to a decision of the Employment Appeal Tribunal on 27 February 2002 allowing an appeal by Ms Fitzgerald's employers, the University of Kent ("the university"), against the decision of an Employment Tribunal on 27 September 2001 that it had jurisdiction to entertain proceedings by Ms Fitzgerald against the University, as initiated by her on the form IT1 on 1 June 2001. The Employment Appeal Tribunal held that, on the true construction of a compromise agreement, which was made in respect of earlier proceedings by Ms Fitzgerald against the university, there was no jurisdiction to entertain the current proceedings.
2. On such an application, this court has to be satisfied that the proposed appeal has a real prospect of success, and appeals are confined to questions of law arising in proceedings in the Employment Tribunal. The question we therefore have to focus on is whether, as a matter of law, the Employment Tribunal correctly construed the relevant provisions of the compromise agreement. If they did, then they had jurisdiction: if they did not, then there was no jurisdiction.
3. Before going to the actual provisions of the compromise agreement and the decision of the Employment Tribunal, it is necessary to state the background to this unfortunate dispute. Ms Fitzgerald was taken on as a lecturer at the university. Her subject was Business Management and she would be lecturing in the Canterbury Business School. The appointment was for a probationary period of three years from July 1995. Unfortunately, she began at the end of 1995 to suffer from depression and there were periods of absence. As a result of actions taken by the university to deal with this situation, Ms Fitzgerald started proceedings in the Employment Tribunal on 30 June 1999. She complained of disability discrimination, the disability relied on being her depression, and she also claimed breach of contract.
4. It was alleged in the first set of proceedings that the university had acted in breach of contract through its University Promotions Committee and had discriminated against her, contrary to section 5(1) of the Act, in its unilaterally seeking to vary her contract of her employment to make the submission of a PhD thesis and the award of a PhD a condition of her continuing employment. I refer in particular to the allegations in the IT1, paragraphs 15-20. There are other allegations made in the proceedings to which it is not necessary to refer for the purposes of dealing with the only point before us, which is the construction of the agreement which compromised those proceedings.
5. So I now turn to the compromise agreement. This has all the appearance of a very carefully drafted legal document. It is dated 18 November 1999. It set out the background, namely that the university employed Ms Fitzgerald as a probationary lecturer and that from 1 April 1999 the university had notified her of its decision that her probationary period would be extended from 1 July 1999 to 30 June 2000, during which time she would be required to submit her PhD thesis, and that if the requirement was met, her probationary period would be extended for a further period from 1 July 2000 to 30 June 2001, during which time the examiners should confirm that the employee had satisfied the criteria for the award of a PhD and, if that requirement were satisfied, the University Promotions Committee would consider her performance as a whole to decide if the probationary service had been satisfactorily completed or not. The agreement referred to written notice being given to the university of Ms Fitzgerald's wish to appeal against that decision, and to the issue of the proceedings on 30 June 1999 to which I have referred. It then recited that

"Terms have now been agreed whereby the ... Employee's claims (if any) will be compromised or withdrawn."

6. The agreement then moved to the operative provisions. It stated in paragraph 3 as follows:

"By way of clarification of the Decision, and in particular clause (b)(ii) and (iii) above, it is envisaged by both parties that in the event of the Employee submitting her thesis by the due date the Employee will make an application for confirmation of satisfactory completion of probation in the usual form to the Faculty Promotion Committee during the Michaelmas Term of 2000. The application will then be considered by the UPC at its annual meeting during the Lent term 2001."

7. Under the heading "Full and Final Settlement" there was clause 4, which is the focus of the decision in the Employment Tribunal and the Employment Appeal Tribunal and the argument Mr Davison has very helpfully put to this court, both in writing and orally this morning:

"4. The terms of this agreement are in full and final settlement of all claims (if any) extant at this time whether contractual, statutory or otherwise including but not limited to the Employee's claims under English and/or European Community Law for wrongful dismissal, unfair dismissal, equal pay, sex discrimination, race discrimination, disability discrimination, statutory redundancy payments and unlawful deductions from pay which the Employee has against the University or any of its officers or employees, SAVE THAT nothing in this agreement shall serve to restrict the Employee's right to pursue a claim (if any) for the following:

(a) Personal Injury and/or

(b) Any remedies the Employee may have concerning the University's non-confirmation of successful completion of probation, whether following non-submission of her PhD thesis by the due date or following submission of her PhD thesis and its assessment (other than claims for disability discrimination or breach of contract arising by the inclusion within the Employee's employment terms of the requirement to complete a PhD and that it be submitted by the 30th June 2000)."

8. There were other provisions under which Ms Fitzgerald withdrew her appeal within the university and withdrew the proceedings. There were various representations, warranties and miscellaneous provisions which are not material to the construction of clause 4.
9. Unfortunately Ms Fitzgerald failed to complete her PhD by the required date of 30 June 2000, with the result that her probationary period was not confirmed and her appointment was terminated on 28 February 2001. In those circumstances new proceedings were issued on 1 June 2001, in which claims were made by Mrs Fitzgerald against the university for unfair dismissal and disability discrimination. In the details of the claim she alleged that she was suffering from disability within the meaning of section 1 of the 1995 Act, namely depression. She referred to her employment from 1 July 1995 and to her subsequent illness and depression, and some of the allegations that were made in the first set of proceedings were repeated. There is reference in paragraph 8 to the earlier proceedings and to the fact that they were compromised, and that under the compromise she was given a period to 30 June 2000 free of teaching and administrative duties in order to complete and submit her PhD thesis. Then she referred to the recurrence of depressive illness resulting in her inability to complete her PhD, and the decision of the University Council on 9 April 2001 not to confirm her appointment or extend her probationary period further, and how she was informed of that decision. She referred to her claim that since the compromise agreement the university had failed to make reasonable adjustments in her favour by failing to heed or act upon and/or obtaining medical advice and by insisting on her compliance with the requirement to obtain a PhD by a given date when medical evidence was to the effect that the applicant could not comply. It was also alleged, under the heading "Dismissal contrary to the Disability Discrimination Act 1995", that the termination of her employment was for a reason related to her disability, namely her inability, due to depression, to complete and submit her PhD thesis. It is clear from those proceedings that claims were made for both unfair dismissal and disability discrimination in relation to the university's invoking the term that was included in the employment contract in consequence of the compromise agreement, clause 4.
10. The response of the university to the proceedings was that the Employment Tribunal had no jurisdiction to deal with the new proceedings in the light of the provisions of the compromise agreement settling the earlier proceedings. They submitted that, on a true construction of clause 4 of the compromise agreement, Ms Fitzgerald was not entitled to bring a claim for disability discrimination or breach of contract based on the inclusion of the term in her contract that she be required to complete her PhD thesis and that it be completed by 30 June 2000. They contended that the new proceedings were based on disability discrimination and breach of contract, and that on the true construction of clause 4 of the compromise she was precluded from bringing the claims, as they are excluded by the agreement.
11. The matter came before the Employment Tribunal. A hearing took place on 11 September 2001 on a preliminary question of jurisdiction. Mr Davison of counsel appeared for Ms Fitzgerald and the university was represented by a solicitor. As appears from the extended reasons, which were sent to the parties on 27 September 2001, the Tribunal unanimously decided that it had jurisdiction to consider the complaints, having regard to the provisions in section 203 of the Employment Rights Act 1986 and section 9 of the Disability Discrimination Act 1995. The Tribunal set out the background which I have already summarised and stated their conclusions after summarising the submissions of the parties in paragraph 13. They said that in their view:

"... paragraph 4(b) of the compromise agreement debars the Applicant from complaining that the mere inclusion of terms concerning a PhD in her contract of employment constitutes discrimination for a reason related to her disability. However, the clause does not preclude the Applicant from complaining that the university's application of the PhD requirement as a reason for non-confirmation of her probationary period is discrimination for a reason relating to her alleged disability.

14. The Tribunal therefore concluded that a Tribunal does have jurisdiction to consider the Applicant's complaint of disability discrimination as set out in the amended Originating Application, having regard to section 9 of the Disability Discrimination Act 1995."

12. The chairman of the Tribunal went on to give directions for the future conduct of the proceedings.
13. The university appealed. The appeal was heard by the Employment Appeal Tribunal on 27 February 2002. They made an order allowing the appeal and substituting a finding that the Employment Tribunal does not have jurisdiction to consider the claims of disability discrimination. The judgment of the Employment Appeal Tribunal was given on its behalf by His Honour Judge Wilkie QC. He set out the background to the dispute, referring to the terms of the compromise agreement and setting out in detail the submissions that Mr Davison had made on the question of construction. In the relevant part of the judgment, the Employment Appeal Tribunal concluded (paragraph 11):

"It seems to us that a clause such as clause 4(b), which has obviously been very carefully crafted in order to provide for two cumulative provisions pointing in opposite directions, is one where we should not readily accept that it is simply an exercise in futility. It seems to us, on the contrary, that clause 4(b) plainly does have a purpose, and the purpose was specifically to prevent the Applicant in future making a claim for disability discrimination, on the occasion of her non-confirmation of successful completion of probation, where that claim was already the subject of the Compromise Agreement, albeit not explicitly covered by the first part of clause 4.

12. Thus clause 4(b) makes the obvious statement that she can bring a claim for a remedy, in respect of non-confirmation of her successful completion of probation on the grounds of non-submission of her PhD thesis, that being a claim which is not extant at the date of the Compromise Agreement, but deliberately makes specific contrary provision that she may not do so if the non-confirmation arises by the inclusion, within her employment terms, of the requirement to complete a PhD, on the grounds that that constitutes a claim for disability discrimination.

13. It seems to us that the plain and sensible intention of clause 4(b) is to preclude that which the Applicant now seeks to do, namely to have her cake and eat it, to have achieved her settlement of her claims and yet be able to bring a new claim, essentially arising from the complaint that she has already made and already compromised. It seems to us that, therefore, the inclusion of [clause] 4(b) has this specific purpose. It is not an exercise in futility. The use of the word 'inclusion' rather than 'application' within clause 4(b), in the context where the trigger for the claim is that there has already been a refusal of certification of completion of her probation, is apt to cover the claim that she presently makes."

14. So they concluded that the Employment Tribunal misconstrued the compromise agreement.
15. It is against that construction that Mr Davison now presents submissions. We are indebted to him for the careful way in which he has set out the arguments in support of Ms Fitzgerald's contentions. The essence of his case is set out in the grounds of appeal in the appellant's notice, where he summarises two points: first, that the EAT's construction of clause 4(b) of the compromise agreement was wrong in law, in that it was (a) grammatically impossible and (b) at variance with the presumed intention of the parties, having regard to the factual matrix within which the agreement was concluded; and (2) that on the true construction of clause 4(b) it applied only to claims based upon the inclusion in the contract of the requirement to obtain a PhD, and not to claims based upon invoking or enforcing the requirement. The EAT gave no (or alternatively, no adequate) grounds to disturb the decision of the Employment Tribunal to this effect.
16. Those two points are developed very lucidly in the skeleton argument under those headings. In the argument before us, Mr Davison has emphasised the wording of the agreement, focusing on the use in clause 4(b) of the expression "arising by the inclusion within the Employee's employment terms". He seeks to draw the same distinction as he sought to do before the Tribunals below, between including the provision, which is to constitute a basis for a claim by Ms Fitzgerald for disability discrimination and, by way of contrast, he says, invoking such a term which, he says, is not covered by the latter part of clause 4(b) and therefore is a case in which Ms Fitzgerald is entitled to claim a remedy concerning the university's non-confirmation of her successful completion of probation.
17. I am indebted to Mr Davison for his submissions, but I have not been persuaded that the construction placed by the Employment Appeal Tribunal on this compromise agreement is wrong. This is not a matter that requires looking at any further evidence. No material was put in by either side before the Tribunals below by way of correspondence or written material which might be used to resolve any ambiguity that existed in the terms of the agreement, and no one has suggested on Ms Fitzgerald's side that the agreement should in some way be rectified in order to represent what was in fact agreed. I therefore proceed on the basis that it is necessary to construe this compromise agreement, first, by reading the document as a whole; secondly, by looking at the nature of the claims in the first set of proceedings that were being compromised; and, thirdly, looking at the particular provisions in clause 4 to read in their ordinary and natural meaning. The conclusion which I have reached, adopting that approach, is that Mr Davison's suggested construction is not one that this provision reasonably bears.
18. As I analyse the provision it starts, first of all, in the first eight lines of the clause, by settling the claims in a comprehensive and final way. It is in full and final settlement of all claims extant at the time of the agreement. Then, and rather unusually, it spells them out claim by claim, including, specifically, disability discrimination.
19. Pausing there, Mr Davison accepted in response to a point put to him by my Lord, Lord Justice Dyson that if the compromise agreement had stopped in this clause at the end of those first eight lines, there would be no question of Ms Maureen Fitzgerald bringing a claim for disability discrimination arising merely from including within the contract of employment the requirement to complete her PhD thesis and submit it by 30 June 2000. He was right to accept that, because her complaint in the first set of proceedings was that the university was seeking to do this unilaterally and the claim that she was making, namely that that constituted disability discrimination, was a claim that she was settling and withdrawing in her withdrawal of these proceedings as a part of this settlement.
20. Mr Davison's point was that when it came to clause 4(b), which in its initial words provided that the compromise did not restrict her right to bring certain other proceedings, the words following "other than claims for disability discrimination" were put in by way of an abundance of caution. It seems to me that on that construction it would not simply be an abundance of caution, it would be a super-super-abundance of caution, because of the view I have taken of the clarity of the opening words on the claims in the proceedings that she was settling and withdrawing. But even when I reach the terms of clause 4(b), I find it difficult to accept Mr Davison's narrow interpretation of "inclusion" as simply meaning that Ms Fitzgerald is agreeing that she will not bring a claim for disability discrimination merely from the fact that these requirements are put into the employment terms. It seems to me, on a reasonable reading of that provision in the whole context of the earlier proceedings and the other provisions in the agreement, that she was agreeing that she could not bring a claim for disability discrimination arising out of the requirement, which was being included in the employment contract being invoked. The distinction which Mr Davison has sought to make between the inclusion of the term and that term actually being operated or invoked is, I think, over subtle. It is not one that I would accept as within the ordinary and natural meaning of these provisions, considered in their particular context.
21. I would also decline to accept Mr Davison's argument that all that was being settled were what he described as "extant claims" and that the claim that Ms Fitzgerald is now seeking to make is not a claim that was extant at the time of this agreement, but is a claim which arises out of events which have occurred since this agreement. It is apparent that what this part of the clause is dealing with is any future claims of disability discrimination that Ms Fitzgerald may have. When the opening words of (b) refer to "any remedies the Employee may have concerning the University's non-confirmation of successful completion of probation", it is referring to claims that will arise out of the future events. The natural meaning of the qualifying words, "other than claims for disability discrimination", is that they refer to claims that will arise out of future events following on the compromise agreement.
22. So, notwithstanding the skill with which Mr Davison has deployed his arguments, I am not persuaded that there is any error of law on the part of the Employment Appeal Tribunal in construing this agreement and reversing the decision of the Employment Tribunal. On the contrary, I think there was an error of law in the decision of the Employment Tribunal and the appeal before the Appeal Tribunal was correctly allowed.
23. In those circumstances, I do not think that this appeal has a real prospect of success. I would therefore refuse permission.
24. There is one other matter I should mention for completeness. At the outset of the hearing I pointed out to Mr Davison and his client, who is in court, the relationship that members of my family have had with the firm of solicitors who act for the university in this case. I asked him to seek instructions as to whether his client had any objection to my sitting on this renewed application. He took instructions and I was informed by Mr Davison that there was no objection to me being part of the constitution which heard and determined this application.
25. So to repeat, for the reasons I have given, I would refuse this application for permission.
26. LORD JUSTICE DYSON: I agree.
ORDER: Application refused