United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR G COLEMAN (representative) "Bradstowe" The Common Danbury Essex CM3 4EE
For the Respondents	MR KERRY UNDERWOOD (Solicitor) Messrs Underwoods Solicitors 1 Holywell Hill St Albans Hertfordshire AL1 1ER


 


MR JUSTICE MORISON (PRESIDENT): This is appeal against a decision of an Industrial Tribunal sitting at London (North) on 10th July 1996. Mrs Prevezer, a Chairman, was sitting alone. It was tribunal's conclusion that the applicant's claim failed and her case was dismissed.

The brief facts giving rise to the decision and this appeal may be shortly stated.

The claim arises out of the payments made to the applicant, Mrs Richmond, by her employers, the Borough of Broxbourne, on the occasion of her dismissal from service on 11th September 1995. She had applied for and accepted voluntary redundancy under the terms of her contract of employment with the local authority.

It was her contention that the employers were in breach of contract in that they failed to add additional years to years of service which would have given her an enhanced pension and lump sum payment under the pension arrangements.

Before electing to take redundancy, Mrs Richmond took the opportunity of finding out from her employers what benefits she would receive. On documents headed "Hertfordshire County Council - Local Government Superannuation Regulations - Notification of Estimated Retirement Benefits" she was provided with two type written sheets of paper setting out with clarity the sums she would receive on two alternative bases. In relation to each basis the Council was indicating that the discretion to enhance her payments would be exercised in her favour. There was a further hand-written document provided to her which compared each of the two bases, and included helpful information so that she could make her decision.

Under the terms of her contract of employment under the heading "Redundancy" and the appendix to the contract, there is an express provision which promises:

"Redundancy payment will be made to the maximum allowed under existing Statutory Regulations."

It is the case for Mrs Richmond before us, and was before the Industrial Tribunal, that she was entitled to an enhanced pension payment on the occasion of her dismissal by reason of redundancy because of the express contractual promise in her contract of employment, and/or because of the arrangement which had been arrived at with the Personnel Department, when she made inquiries of them as to her entitlement.

In relation to the promise that was contained in her contract of employment, it was her contention that the reference to the Statutory Regulations in that promise included a reference to the Local Government (Compensation for Premature Retirement) Regulations 1982. By those Regulations which apply to person such as Mrs Richmond who cease to hold their employment with an employing authority by reason of redundancy and who had on the material date attained the age of 50 but was below the age of 65, the authority was given a discretion to increase the reckonable service so as to increase both the lump sum payment and annual pension figure.

The Industrial Tribunal Chairman made the following finding. In relation to the particular claim arising out of discussion with the Personnel Department, the tribunal held that Mrs Richmond was informed by the Personnel Department that she would "in fact be entitled to an extra six and two-thirds years of service as she was over 50 and a calculation was made of the expected sum that she would receive accordingly."

In relation to the collective agreement which was being relied upon and the term in her contract that "redundancy payment will be made to the maximum allowed under existing Statutory Regulations", the tribunal came to the conclusion that nothing that was said in her contract of employment constituted a binding promise to exercise a discretion under those Regulations. The Chairman considered the statutory instrument in question, emphasised the discretionary nature of it, and referred to certain other evidence that had been given. The Chairman drew the conclusion from the evidence as follows:

"10. ... It is clear therefore that it was accepted by all the employees that the addition of extra years to an employee's length of service which would result in an enhanced payment was a discretionary matter. This Applicant in fact, had got an extra two years after she had appealed and had asked for six and two-thirds to be added."

On that basis, her claim was rejected. But it is to be noted that in rejecting the claim it does not appear to us that the learned Chairman has dealt with the claim arising out of the Chairman's earlier finding in paragraph 4 of the Decision that Mrs Richmond was told by the Personnel Department that she would be entitled to an extra six and two-third years of service.

In resisting this appeal, Mr Underwood on behalf of the employers, to whom we are grateful for his argument, accepts as he was bound to do, that this decision was not as satisfactory as one might have expected from an experienced Industrial Tribunal Chairman.

It seems to us that that concession was inevitable. The Decision has not, with great respect to the Chairman, been well-constructed. It also seems to us, by way of a preliminary observation, that in this sort of case it would have been much better had the Chairman had the advantage of the assistance of two lay representatives. The reason why we are of that view in this case, is that there were issues before the tribunal as to what had been agreed collectively, and issues relating to pension matters. It is precisely those sorts of cases where the lay persons, in our judgment, can bring a great deal of knowledge and skill which can be used in the judicial process. It was perhaps unfortunate that Mrs Prevezer did not have the benefit of that assistance from two colleagues in this particular case.

But be that as it may, we approach the case, like any other, on the legal merits of it.

It was Mr Underwood's submission that these matters were carefully gone into by the Industrial Tribunal Chairman; that the Industrial Tribunal are the fact finding body; and that on the evidence that the tribunal heard, the Chairman was entitled to arrive at the conclusion that despite the words in the contract, there was no obligation on the Council to exercise their discretion in a particular way so far as pension mattes were concerned.

In relation to the particular agreement which was referred to by the Chairman with the Personnel Department, Mr Underwood recognised that the Chairman, having found that Mrs Richmond had been told that she was entitled to an extra six and two-thirds years of service, failed thereafter to say why any such discussion did not lead to the conclusion that she was accordingly entitled to the money which she had been told she would receive, and on the basis of which she had gone ahead and retired. But he said that despite the fact that it had not been dealt with, at least that there is some sign that the Chairman must have had it in mind. But if we were against him, we should sent the case back to the Industrial Tribunal to consider why it was that such an arrangement did not give rise to legal liability.

In our judgment, Mr Underwood is not correct in his submission on the question as to the agreement with the Personnel Department. It seems to us, perfectly clear from the findings in paragraph 4, that there was material there which gave rise to a legal right in Mrs Richmond to payment of the monies which she had been told she would get when she had her discussions with the Personnel Department. It seems to us, that the circumstances of the discussion which she had with her employers at that time was in the context of her taking a decision as to whether she should or should not retire. Where an employer gives an indication to an employee which they are entitled to rely on, it seems to us to be unlikely, in principle, that as a matter of law an employer would be entitled to renege on that indication. Much will depend upon the circumstances, but in this particular case, she was told what her entitlements would be. That seems to us to indicate that the employers were exercising their discretion and were telling her that they were exercising their discretion in her favour.

For that reason alone, we would allow this appeal. We do not see any need to send it back to the Industrial Tribunal for further clarification. It seems to us that the Chairman has found the facts which gives rise to legal liability. Accordingly, we allow the appeal on that ground and direct that Mrs Richmond's pension entitlements are those which are set in the calculations which were produced to the Industrial Tribunal Chairman, based on the choice she made of the two options presented to her. Therefore, in our judgment, her claim succeeds.

The argument as to whether in any event she had a promise like every other employee to the maximum allowed under existing Statutory Regulations to include pension matters, is, we can see, more problematical. We do not consider that this is an appropriate case to arrive at a final conclusion on the rival submissions which were made to us, but we can, I think, say that we were inclined to the view that the appellant's arguments under that head were correct. But having said that, Mr Underwood's submission may be well-founded. The Chairman received in evidence a number of documents. Tribunals should be wary about receiving evidence as to a parties' actual intention in trying to construe contracts, rather than concentrating on the task in hand which is to derive the objective intention of the parties from the language which they have used and from the surrounding circumstances. As we say, we do not need to reach a conclusion on that issue.

The appeal is therefore allowed.

As to the question of remedy, unless agreed between the parties, this will be adjourned for hearing before the end of July 1997.