Industrial Tribunals Northern Ireland Decisions

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URL: http://www.bailii.org/nie/cases/NIIT/2008/00421.html
Cite as: [2008] NIIT 421_8IT, [2008] NIIT 421_08IT

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THE INDUSTRIAL TRIBUNALS

CASE REF: 421/08

CLAIMANT: John Laverty

RESPONDENT: South Eastern Regional College

DECISION

The unanimous decision of the tribunal is that:-

The title of the respondent is ordered, by consent, to be amended from South East Regional College to South Eastern Regional College, as set out above.

(2) The tribunal does not have jurisdiction to determine the claimant’s of breach of contract as the said claim was not outstanding at the effective date of termination of the claimant’s contract of employment with the respondent; and the claimant’s claim is therefore dismissed.

Constitution of Tribunal:

Chairman (sitting alone): Mr N Drennan QC

Appearances:

The claimant appeared in person and was not represented.

The respondent was represented by Ms A Finnegan, Barrister-at-Law, instructed by J Blair, Employment Law Solicitor.

Reasons

The claimant presented his claim to the tribunal on 29 February 2008, in which he made a claim of breach of contract against the respondent. The respondent presented a response on 17 April 2008, in which it denied liability; and, inter alia, contended that the said claim was out of time and/or the tribunal had no jurisdiction to determine the claimant’s said claim.

There was no dispute between the parties that the claimant’s claim for breach of his contract of employment related to the claimant’s claim that there had been a breach by his employer of the implied duty of an employer to inform an employee of the benefits of that relationship, pursuant to the decision of the House of Lords in the well-known decision of Scally v Southern Health & Social Services Board [1991] IRLR 522.

In the said Scally decision, the House of Lords held:-

“There was a contractual obligation on the employers to take reasonable steps to bring the existence of the right to enhance their pension entitlement by the purchase of added years to the notice of the plaintiff employees.

It is necessary to imply an obligation on the employer to take reasonable steps to bring a term of a contract of employment to the employee’s attention, so that he may be in a position to enjoy its benefit, where the terms of the contract had not been negotiated with the individual employee but result from negotiation with a representative body or otherwise incorporated by reference; a particular term of the contract makes available to the employee a valuable right contingent upon action being taken by him to avail himself of its benefits; and the employee cannot, in all the circumstances, reasonably be expected to be aware of the term unless it is drawn to his attention.

Accordingly there was an implied term in each of the plaintiffs’ contracts of employment of which the employers were in each case in breach.”

As His Honour Judge McMullan QC stated in a recent decision of the Employment Appeal Tribunal in the case of Dombey v University of Brighton [UKEAT/0172/07]:-

“ … the reach of Scally is that where a valuable benefit exists in the employment relationship, an employee is under a duty to make that known. It is under a particular duty where it is limited in time, as it was in Scally. …”

The claimant initially brought a claim against the respondent on 18 May 2007, to which the tribunal gave the Case Reference No: 1186/07. This was an equal pay case made under Section 1(1) of the Equal Pay Act (Northern Ireland) 1970 and Article 141 of the Treaty of Rome, alleging the claimant was unlawfully excluded from membership of his employer’s pension scheme because he worked part-time and such exclusion was unlawful. This claim was made pursuant to the litigation known as the ‘Preston Litigation’ (see further Preston & Others v Wolverhampton Healthcare NHS Trust & Other (No 3) [2004] IRLR 96). By an Order of the Tribunal issued to the claimant on 15 February 2008, the claimant was ordered to pay a deposit as a condition of being permitted to continue to take part in the proceedings, pursuant to Rule 20 of the Industrial Tribunals Rules of Procedure 2005, set out in Schedule 1 of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 (‘the Rules of Procedure’). The claimant’s said claim was struck-out by the tribunal, pursuant to Rule 20 of the Rules of Procedure, by reason of the failure of the claimant to pay the deposit in accordance with the Order of the Tribunal, in a decision recorded in the register and issued to the parties on 12 March 2008. The said decision was not appealed.

The claimant’s contract of employment with the respondent terminated on 31 August 2007 (the effective date of termination).

The tribunal has jurisdiction to determine a claim for breach of contract, pursuant to Article 3 of the Industrial Tribunals (Extension of Jurisdiction) Order (Northern Ireland) 1994, (‘the Extension of Jurisdiction Order’) in relation to a claim for damages for breach of contract, provided the claim arises or is outstanding on the termination of the employee’s employment.

For the purposes of these proceedings, it was agreed by the parties that the claimant was employed, at all material times, for the purposes of these proceedings, by the respondent and/or by the respondent as successor-in-title to East Down Institute of Further & Higher Education/South Eastern Education & Library Board.

It was further agreed, at the outset of the hearing of the claimant’s claim of breach of contract that the tribunal would first consider and determine the liability of the respondent in relation to the claimant’s said claim; and, if necessary and appropriate, in light of the tribunal’s decision on liability, the matter would then be re-listed to consider any remedy which the claimant would be entitled to on foot of the said decision.

It was not disputed by the parties the claimant’s claim was made, pursuant to the decision in Scally; and that the respondent, in breach of the claimant’s contract of employment with the respondent, had failed to inform him of the change of rules, in or about 1995, which would have entitled him, if he had wished, to become a member of the Northern Ireland Teachers Superannuation Scheme (the pension scheme) by opting into the pension scheme. It was not disputed that, prior to the change of rules in 1995, he was not entitled as a temporary part-time lecturer with the respondent to join the pension scheme. It was also not disputed that, upon the claimant’s appointment, from on or about 1 March 1999, as a permanent employee of the respondent as an associate lecturer, he was entitled to join, and did join, the pension scheme from that date onwards. In essence, the claimant contended that, by reason of the failure of the respondent, in breach of the said implied term of his contract with the respondent to inform him of the said changes in the rules he did not know that he could join the pension scheme during the period from in or about 1995 to 1 March 1999; and he had thereby suffered loss and damage in relation to his pension in relation to those ‘lost years’.

I made the following findings of fact, insofar as relevant and material to the tribunal’s said decision, after considering the documentation produced by the parties and the oral evidence given by the claimant and Mr Paul Smyth, the Human Resources Manager of the respondent; and in light of the oral submissions made by the claimant and the respondent’s representative at the conclusion of the hearing.

The claimant from 1993 onwards, but in particular from 1995 onwards for the purposes of these proceedings, entered into a series of temporary contracts with the respondent as a part-time Further Education Lecturer. These part-time contracts were to cover the particular needs of the respondent at any particular time; but, under the said contracts the claimant had no security of tenure. As each contract ended, the claimant had no guarantee, as he readily accepted, that he would obtain another contract from the respondent following the conclusion of that contract. Most of these contracts were for the relevant academic year but some were for a shorter period of time. The last of these series of temporary part-time contracts, insofar as relevant and material, was from 1 September 1998 to 18 June 1999. That contract in fact ended before the end of the said period because, during the course of that year, the claimant applied and was subsequently appointed from 1 March 1999 to the permanent post of associate lecturer with the respondent under a new contract of employment, entered into by the claimant, with the respondent from that date. As this was a permanent post, there was at no time any issue between the parties that the claimant was not entitled to be a member of the pension scheme. Indeed, as indicated above, and which was not disputed, the claimant became a member of the pension scheme from on or about the date of his said appointment, namely 1 March 1999. This was a permanent part-time contract; but significantly it meant that the claimant now had the security of tenure, which he had not obtained when he was the subject of the series of temporary part-time contracts, which he had previously entered into with the respondent, as set out above, from in or about 1993. However, it appears the day-to-day elements of his work did not significantly change upon entering into the said new contract of employment.

At the time the claimant entered into each of the series of temporary part-time contracts from 1995 onwards, there was nothing, on the face of each contract, to inform him of his entitlement, as a part-timer, to opt into the pension scheme. However, during the academic year 1997/8, the claimant was attending a course at the University of Ulster when he became aware, from conversations with fellow part-time teachers employed on similar temporary part-time contracts like himself at other further education colleges, that they had been able to opt in to become members of the scheme. However, there was no evidence given to the tribunal by the respondent that, at any time during the relevant period between 1995 to 1 March 1999, the respondent circulated or otherwise distributed to the claimant any information which would have informed him of his ability to become a member of the pension scheme from 1995 onwards, as a part-time employee under the said temporary contracts.

The claimant, in evidence, which was not disputed, stated that on various occasions during the said period from 1995 to March 1999 he had been informed by Mrs A Hedley, his Head of Department, that as a part-time lecturer under such contracts, he was not entitled to join the pension scheme. I accept the claimant had no recollection, in the circumstances, of precise dates and occasions. It was not disputed by the respondent this was stated by Mrs Hedley and that such information was incorrect. The claimant accepted what he was told by her and did not seek to challenge what she said to him. However, following his conversation at the University of Ulster, he wrote a letter to the Department of Education on or about 13 August 1998 seeking to clarify his position in relation to his pension entitlement under such contracts. He received no reply to this letter and failed to follow-up the absence of any reply. I can understand that, at this time, the claimant was seeking the permanent part-time position of associate lecturer, which as seen above gave him the necessary entitlement to join the scheme, unless he opted out; but I do not accept that his focus and concentration on that issue excused his failure to follow-up his letter to the Department of Education on the above pension issue. Similarly, whilst I understand the claimant’s personal relationship with Mrs Hedley and other members of the respondent may have been difficult, I think that this cannot excuse his failure to follow-up the matter, given, in particular, what he had heard at the University of Ulster, and seek clarification of his position in relation to the pension scheme from the Director of the respondent and/or other more senior officers of the respondent to Mrs Hedley, either at the college itself and/or at the South Eastern Education & Library Board.

Indeed, I am satisfied that, having obtained the associate lectureship and membership of the pension scheme in March 1999, the claimant took no further action until in or about 2006/7; when unfortunately his health began to fail and he realised he would have to take early retirement and his pension would not be very large, as he had only been a member of the scheme from 1999. Thus the loss of pension entitlement from the period 1995 to 1 March 1999, again came into focus for the claimant and he resumed his investigation of his entitlement for the said period to membership of the pension scheme.

3. As stated previously in this decision, for the claimant to bring a claim for breach of contract under the jurisdiction of the tribunal, as set out in the Extension of Jurisdiction Order, the claim had to be outstanding at the effective date of termination of the claimant’s contract of employment with the respondent. If the claim was statute-barred, on the grounds that it was out of time at the said date, then the claim could not be said to be outstanding and the tribunal would not therefore have jurisdiction to consider and determine any such claim.

3.2 Article 4 of the Limitation (Northern Ireland) Order 1989 provides that an action founded on simple contract “shall not be brought after the expiration of six years from the date in which the cause of action accrued”. However, the said time-limit may be postponed where fraud, concealment or mistake can be established by a claimant. In this case, fraud was not relevant.

Under Article 71 of the Limitation (Northern Ireland) Order 1989, it is provided:-

Where in an action for which time-limit is fixed by this Order, either –

(a) …

Any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the defendants.

The action for relief from the consequences of a mistake.”

The time-limit does not begin to run until the plaintiff has discovered the … concealment … or mistake (as the case may be) or could with reasonable diligence have discovered it.

The general rule in contract is that the cause of action accrues not when the damage is suffered but when the breach takes place.

3.3 In relation to concealment, Chitty on Contracts (29^th Edition) states:-

“A deliberate commission of a breach of duty in circumstances which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty. The use of the word ‘deliberate’ indicates an unwitting (even if negligent) concealment of a relevant fact or commission of a breach of duty is not enough. It also appears that no fraud or dishonesty on the part of the defendant needs be proved. Where there is a deliberate commission of a breach of duty, eg a breach of contract, it is unnecessary to show the defendant took active steps to conceal the breach; all that is required is that it is committed ‘in circumstances in which it is unlikely to be discovered for some time … . In cases arising under [Article 71(1)], time begins to run when the claimant discovers a concealment or could with reasonable diligence have discovered it. What is ‘reasonable diligence’ varies with the particular context in which that expression is to be applied. It does not require the claimant to use all means of discovery available to him, but only to do that which an ordinary prudent person, having regard to all the circumstances, would do. The burden of proof rests upon the claimant.”

(See further Chitty on Contracts (29^th Edition) Paragraphs 28-084 and 28-089..

3.4 There was no evidence before the tribunal of any fraud by the respondent in relation to the failure to inform the claimant of his entitlement from 1995 to opt into membership of the pension scheme.

In light of the facts found by the tribunal, the tribunal had to consider and determine whether, at the date of the termination of his contract of employment with the respondent, the said claim arose or was outstanding on the termination of his employment with the respondent. (See Article 3 of the Extension of Jurisdiction Order.) If it was not, then the tribunal did not have jurisdiction to consider the claimant’s claim of breach of contract. I am satisfied, and this was not seriously disputed by the respondent’s representative, that the cause of action in relation to any breach of contract by the respondent, namely breach of the implied term to take reasonable steps to inform the claimant of his entitlement, if he wished, to opt into membership of the pension scheme, accrued from 1995 onwards and was a continuing breach up until March 1999, when the series of temporary part-time contracts entered into between the claimant and the respondent ended. At that time the claimant entered into the new permanent part-time contract of employment, whereby he became an associate lecturer and was entitled from that date to membership of the pension scheme, unless he opted out; and indeed he became a member of the pension scheme from that date. In these circumstances, upon the termination of the previous employment relationship between the parties, which had existed under the series of temporary part-time contracts, and his then entering into the said new employment relationship, under the permanent part-time contract, any continuing breach of the implied term of the contract to so inform the claimant of his entitlement to membership of the pension scheme when employed under the series of temporary contracts, in my judgment, ended on that date. Thus, the claimant was required to bring any claim for breach of contract against the respondent, subject to any issue of extension because of concealment or mistake, within six years from 1 March 1999, namely on or before 1 March 2005. The claimant’s contract of employment with the respondent as an associate lecturer ended on 31 August 2008 and, subject to any issue of extension because of concealment or mistake, as referred to below, at that date the said claim could not be said to be outstanding; and the tribunal therefore could not have jurisdiction to consider and determine any such claim for breach of contract. However, if the claimant could establish that the said six year period had been extended, pursuant to Article 71 of the Limitation (Northern Ireland) Order 1989; and, in particular, he could show that there had been deliberate concealment and/or mistake by the respondent up until the date of termination of his employment, then the tribunal might have jurisdiction to consider such an outstanding complaint – provided the relevant time-limits for presenting such a claim to the tribunal had been complied with. In this particular case, Mrs Hedley, on the evidence before me, was asked on a number of occasions during the period between 1995 and 1 March 1999 whether the claimant, as a temporary part-time lecturer with the respondent, was entitled to be a member of the pension scheme and he was informed by her that he was not. He accepted what she, as his line manager, had told him. I think that his acceptance of what she was telling him must have been known to Mrs Hedley and therefore she must have been aware, due to his acceptance, that in failing to inform him of the true position that the breach of the implied duty was unlikely to be discovered for some time. However, even if that is correct, I have no doubt that the claimant with reasonable diligence could have discovered the true position, albeit not immediately. Firstly, he was aware from his conversations at the University of Ulster that others in a similar position to himself had become members. He had the opportunity, which he did not use, to follow-up his correspondence with the Department of Education on this particular issue. Further, he could have made enquiries from the Director of the college and/or other senior members of staff of the South Eastern Education & Library Board. Certainly, I am satisfied that the claimant, with reasonable diligence, could have ascertained the true position from in or about the end of 1999 and/or at the latest early 2000, having written to the Department in August 1999. Indeed, it might be argued, given his conversations at the University of Ulster in the academic year 1997/98, he could have found out at an earlier date.

As I have indicated previously, Mrs Hedley did not give any evidence to the tribunal and there was no evidence given by the respondent why she failed to inform the claimant of the true position when asked by him on the various occasions during the period 1995 to 1 March 1999. Even if I am wrong and it was not deliberate concealment but rather a mistake on the part of Mrs Hedley the relevant six year period of limitation would not have begun to run until the claimant had discovered the mistake or could with reasonable diligence have discovered it. Again, for similar reasons to those set out above, I am satisfied that the claimant could have ascertained with reasonable diligence the mistake from in or about late 1999/ early 2000.

To be able to bring a claim of breach of contract, in these proceedings, the claimant had to show at the date of termination of his contract of employment, he had such a claim which was not outstanding. The claimant would therefore have had to be able to show he could not have discovered, with reasonable diligence, his entitlement to join the pension scheme before 31 August 2001. His failure to obtain the relevant information was due to his failure to follow-up the matter, as indicated above, and it is clear that he took no relevant action after his letter on 13 August 1999. If he had acted with reasonable diligence, in my judgment, he would have known the true position by early 2000. Given he could have ascertained the true position with reasonable diligence at the latest in January 2000, the relevant period of limitation ended on or about 31 January 2006 and therefore the claim of breach of contract by the claimant was not outstanding at the date of the termination of his employment on 31 August 2007. In those circumstances, the tribunal does not have jurisdiction, in my judgment, to consider and determine the claimant’s claim of breach of contract.

Given my said decision, I considered it was not necessary for me to determine whether the claimant had presented his claim to the tribunal within the relevant time-limits for presentation of such a claim under the provisions of the Extension of Jurisdiction Order; and, if not, whether time should be extended under the said provisions.

The claimant’s claim of breach of contract therefore must be dismissed.

Chairman:

Date and place of hearing: 28 – 29 October 2008, Belfast

Date decision recorded in register and issued to parties: