United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 171_93_2104

Appeal No. EAT/171/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 21st April 1994

Judgment delivered on 23rd May 1994

Before

HIS HONOUR JUDGE J HULL QC

MR R H PHIPPS

MR R TODD

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MR D MALONE          APPELLANT

THE GOVERNORS OF CAMBRIDGE REGIONAL COLLEGE          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MR RICHARD ALLFREY

(of Counsel)

Carruthers & Co

36 Regent Street

Cambridge

CB2 1DR

For the Respondents MR J BOWERS

(of Counsel)

Miss K L Tripp

Solicitor to the Council

Shire Hall

Castle Hill

Cambridge CB3 0AP


 


HIS HONOUR JUDGE HULL QC Mr Malone worked as a clerk for several years at Cambridge Regional College, beginning in 1987 or 1988. He had a series of one-year contracts. In 1990 he began to work under a new contract on 1st September; the contract continued until 31st August 1991, and was not renewed then.

Under S.54 of the Employment Protection (Consolidation) Act 1978 an employee is given "the right not to be unfairly dismissed"; the section applies to every employment except in so far as its application is excluded by any provision of Part V of the Act or Ss.141 to 149. Under S.55(2) of the Act, an employee shall be treated as dismissed if, inter alia, "where, under [the contract of employment] he is employed for a fixed term, that term expires without being renewed under the same contract".

Mr Malone complained to the Industrial Tribunal under S.67 of the Act that he had been unfairly dismissed. The Tribunal, sitting at Bury St Edmunds on 28th September 1992, held that he had agreed in writing, pursuant to S.142 of the Act, that any claim under S.54 should be excluded, and accordingly they dismissed the complaint.

Mr Malone appeals to us on the single question whether the Industrial Tribunal was correct in this part of its decision.

Under S.140(1) of the Act, except as provided by the section any provision in an agreement shall be void in so far as it purports to exclude any provision of the Act or preclude any person from presenting a complaint to an Industrial Tribunal. Section 140(2) states that subsection (1) shall not apply to a large number of agreements and provisions in agreements: concluding, in paragraph (h), that subsection (1) shall not apply "to any provision of an agreement relating to dismissal such as is mentioned in section 142(1) or (2)". Section 142(1) provides that S.54 does not apply to dismissal from employment under a contract for a fixed term of one year or more, where the dismissal consists only of the expiry of that term without it being renewed, if before the term so expires the employee has agreed in writing to exclude any claim in respect of rights under that section in relation to that contract. Section 142(3) provides that the agreement mentioned in subsection (1) may be contained either in the contract itself or in a separate agreement.

On 29th August 1990 the employers wrote to Mr Malone at his work place giving details of his "renewed contract from 1st September 1990". It was stated among other matters that the contract would be for a fixed term until 31st August 1991. The letter concluded:

"The statement below should be signed and returned ... before a formal statement of particulars is released."

Below was an annexure which read:

"In accordance with S.142 of the Employment Protection (Consolidation) Act 1978, I agree to waive my right to make a complaint of unfair dismissal on the expiry of the contract on 31st August 1991. I accept the appointment as file/computer clerk on the above terms and conditions and that it will come to an end on 31st August 1991."

Mr Malone went on holiday after receiving this document, and then he was off work ill until January. However, while he was away, he signed the annexure on 18th October 1990 and returned it to the employers on or before 30th November 1990.

Mr Malone has appealed to us on the ground that the annexure signed by him was not an agreement within S.140(2)(h) and S.142(1) and (3) of the Act because it was not a contractual agreement supported by consideration. Mr Allfrey, who appeared on Mr Malone's behalf, presented us with a concise skeleton argument. He pointed out that the categories of agreement referred to in S.140(2) could be divided into four: all these, except for those under S.140(2)(h) and S.142 were agreements negotiated or facilitated on behalf of the individual employee by an expert organisation such a Trade Union, Conciliation Officer or the Secretary of State. In no circumstances did the employee stand alone when entering into such agreement. Accordingly, consideration was not essential to such agreements. It was otherwise in the case of an agreement under S.142, where Parliament intended (it was submitted) that the agreement should be contractual and should therefore be supported by consideration. This, said Mr Allfrey, was an important safeguard for the employee. No doubt he would have accepted that such an agreement would also be effective and binding if entered into as a deed, as that would almost certainly involve the advice and assistance of a solicitor.

Mr Allfrey then pointed out that if the agreement were made at the beginning of the new fixed term of the contract then the consideration for it would be the entering into of the contract itself. However, where as in the present case the agreement was made during the currency of the contract other consideration would have to be provided. He cited from Harvey on Industrial Relations and Employment Law at Vol.1, Section II, paragraph 165:

"The agreement to waive the statutory right may be made at any time before the contract expires, and section 142(3) makes it clear that it may be contained either in the contract itself or in a separate agreement. But if the agreement is made during the currency of the contract, there must be some consideration for the employee's agreement to waive his right, and this cannot be found in the employer's agreement to respect the contract, for that is an existing legal obligation."

Mr Allfrey pointed out that if the agreement were not supported by consideration, the employee could withdraw from it at any stage, perhaps even after his employment was at an end. This was quite inconsistent with the idea of an agreement intended to affect the legal position of the parties.

Here, the employer had failed to show any consideration for the agreement and accordingly it was not effective and the Industrial Tribunal should have accepted jurisdiction.

Mr Bowers, for the employers, submitted that the alleged requirement for consideration was an illegitimate gloss on the provisions of S.142. In S.142 there was a distinction between a contract and a mere "agreement". This was a provision which had existed since the Industrial Relations Act 1971; it had never been decided that consideration was required. It was important that issues about such a matter should, before the Industrial Tribunal be kept as simple and short as possible. It was undesirable that the Industrial Tribunal should have to consider recondite discussions about consideration, which was a particularly difficult concept in the employment field; the concept of consideration arose on every pay day or (when consideration moving from the employee was under discussion) on every occasion when the employee did work for the employer. He referred to Lee v. GEC Plessey Telecommunications [1993] IRLR 383, 388 at paragraph 112 onwards.

Mr Bowers also pointed to the many "agreements" in the employment field which are not intended to be legally binding as contracts, for example, collective agreements. He suggested that if an employee entered into an agreement under S.142 he could not effectively withdraw at all, whether or not the agreement was supported by consideration: the question which arose under the section was whether he had entered into that agreement, not whether he still recognised himself as bound by it. The right not to be unfairly dismissed depended on status, not contract. Mr Bowers referred to Harvey, Vol. 1, Section III at paragraph 109.01:

"It is at least tenable to say that by contrasting the contract of employment with a separate agreement, the draftsman was intending to allow waiver by an agreement which had no contractual force of its own. Moreover, it is understood that in Scots law a formal, written waiver in these circumstances would be contractually effective even without any separate consideration; and if the Act is ambiguous, that interpretation should be adopted which achieves uniformity of operation North and South of the border. Thus, it is submitted, a written agreement to waive will be effective by virtue of the statute whether or not it has any contractual effect."

Alternatively, if consideration were indeed generally required, Mr Bowers said that the rules for applying S.142 could not be stricter than those of the ordinary civil law. An agreement could therefore operate as a waiver without consideration, and on the facts of this case it had done, for Mr Malone had never purported to withdraw from the agreement.

In the further alternative, Mr Bowers submitted that there was consideration for Mr Malone's agreement, in the continued payment of salary after November 1990: he referred to Lee's case (above).

We have come to the conclusion that Mr Bowers' first submission is correct. The scheme of the Act is to create statutory rights and duties, dependent on status and independent of the contract of employment, which rights and duties can only in limited circumstances be excluded or limited by contract. This is no doubt due, in part at any rate, to the Act's roots in the Treaty of Rome and concepts of written constitutional rights in the civil law European Jurisdictions. The Act can usefully be compared in this respect with the Sex Discrimination Act 1975 and the Race Relations Act 1976. We accept that S.140 sets out a very large group of agreements, very many of which are not contractually binding, and although Mr Allfrey is certainly right in saying that most of these will be entered into with the benefit of expert assistance, we do not accept his corollary that consideration is required in an agreement under S.142, as being some sort of protection for the employee. In law, any consideration, however derisory, is sufficient.

In our judgment, Mr Allfrey's submission does indeed make an unjustified gloss on the statute, adding a requirement which would (had Parliament intended any such thing) have been readily provided for by substituting the words "contracted in writing" for "agreed in writing".

It is therefore unnecessary for us to decide whether Mr Bowers' alternative submissions are correct.

For the reasons which we have set out, the appeal must be dismissed.