United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR K BRYANT Mr G Stage Solicitor Association of Teachers & Lecturers 7 Northumberland Street WC2N 5DA
For the Respondents	NO APPEARANCE OR REPRESENTATION BY OR ON BEHALF OF THE RESPONDENT


 


JUDGE PETER CLARK: Elliott Park School is an Independent Day School for Boys and Girls aged 4 to 11. Prior to the half-term break commencing on 25 October 1995 it was run by Mr C Hudson.

On 19 October 1995 it became clear to the parents that the school was in severe financial difficulties, and that Barclays Bank, which held a charge over the school, was on the point of putting the school into Receivership.

The parents rallied round. They entered into an arrangement with the Receivers appointed on 8 November 1995. They saved the day. Trustees were appointed to run the school and it survived. Just.

We mention that background because it explains why economies were necessary in the matter of staff costs. Equally, it is wholly irrelevant to the strict legal point which we are required to consider in this appeal.

On 10 November 1995 a member of the teaching staff, Miss J Austin, resigned with immediate effect in order to look after her ailing father. The Trustees recruited the Appellant to replace Miss Austin on a temporary, part-time basis. She took up employment, on that basis, on 14 November 1995.

On 12 December 1995 the Trustees offered the Appellant a permanent position. She accepted. The terms of her employment are contained in a written contract, signed by the Trustees and given to her on 28 December 1995.

The following terms are material:

"NOTICE .......ONE TERM'S NOTICE EITHER WAY

i.e. A Term is:- JAN 1 - APRIL 30 MAY 1 - AUG 31 SEPT 1 - DEC 31"

And later:

"This Position is subject to One Term's Probationary Period."

The next school term commenced on 8 January 1996. Towards the end of that term, which finished on 4 April 1996, the Appellant was told by the Chairman of Trustees that her contract would not be renewed next term. That was confirmed by letter dated 25 March, which read:

"Dear Mrs Port

Further to our meeting on Friday 22 March 1996, we are writing to confirm that we are unable to renew your contract of employment. Your employment will end on Thursday 4th April 1996 whilst your contract will be terminated on 30 April 1996.

We would like to thank you for your services to the school and if in the future any part-time vacancies arise we would be more than willing to give you consideration."

The Appellant claimed that she was contractually entitled to one term's notice of termination, that is, under the notice provision in the contract, from 1 May to 31 August. That claim was not accepted by the Trustees, and by an Originating Application dated 17 July 1996 she presented that claim for breach of contract to the Industrial Tribunal.

Her complaint was heard by a Chairman, Mrs Valerie Cooney, sitting alone at Ashford on 5 November 1996. The claim was dismissed for the Extended Reasons given on 15 November 1996.

The Chairman, having recited the facts, found that the final contract commenced on 1 January 1996. We agree.

Secondly, she found that under the contract there was a clear requirement that one term's notice must be given by either party. Again, we think that is self-evident.

However, she went on to conclude:

" ...that it cannot reasonably have been the intention of the parties to require a term's notice either side until after the completion of the probationary period. The employee must complete one term's probation before having the employment continued [so the Chairman found]. The requirement and the obligation on the employer to give one term's notice is subject to that, and such requirement does not operate until the probationary period has been served. That period was not served in this case."

In these circumstances she dismissed the claim.

The Appeal

The construction of express terms of a written contract of employment is a question of law. Mr Bryant, for the Appellant, submits that as a matter of law the Chairman misconstrued the terms of the contract.

He contends that:

(1) The statement as to the probationary period has no effect on the clear express notice provision.

(2) If the employer wished to provide for a different period of notice during the probationary period, express provision therefor must be made in the contract.

(3) It is impermissible to rely upon extrinsic evidence as an aid to construction of a written contract, in the absence of any ambiguity in the express terms.

(4) The question is, what do the words of the contract mean, not what does the Industrial Tribunal consider was reasonably the intention of the parties - an exercise which is relevant to implying a term where there is no express term.

Conclusion

In our judgment the construction contended for by Mr Bryant is correct.

As a matter of pure contract, as opposed to questions arising on a claim of unfair dismissal, the express terms of the written agreement of 28 December 1995 are clear and unambiguous. The Appellant was entitled to one term's notice of termination, as defined. Notice was given during the first term worked under the contract. Such notice could not lawfully be expressed to expire until 31 August 1996. The inclusion of a one term probationary period did not detract in any way from the notice provision. It is not permissible to substitute for the clear words of the contract an implied term that no further notice was required if the contract was terminated towards the end of the probationary term because it is reasonable to conclude that that must have been the intention of the parties. If the employer wished to reserve a contractual right to terminate the contract at the end of the first term it could have done so by words, for example, to this effect:

"The employment shall, in the first instance, be for a probationary period of one term. Thereafter, the employment is terminable by either party on one term's notice;" 'A term' being defined as provided for in the contract.

That is not how the contract was expressed. It cannot now be re-written to that effect. In our judgment the Chairman misconstrued the relevant terms. That is an error of law. The decision must be set aside and we substitute a declaration that the complaint is well-founded. The Appellant is entitled to damages for breach of contract based on her right to notice of termination extending from 1 May to 31 August 1996, subject to the usual deductions and the Appellant's duty to mitigate her loss. In the absence of agreement between the parties, we shall remit the question of damages to an Industrial Tribunal for determination.

Finally we should add that the Respondent has not advanced oral argument before us, nor submitted a skeleton argument. One of the Trustees, Mr Hardman has attended this hearing as an observer. This case came before the Employment Appeal Tribunal at a Preliminary Hearing on 7 March 1997, when the matter was allowed to proceed to a full hearing. A copy of the Tribunal's order was sent to a Trustee, Mr Knights. It must therefore have been clear to the Respondent that this was to be a full hearing. In any event, the Respondent's answer simply relies upon the Chairman's reasoning. For the reasons which we have given, we find that that reasoning is flawed as a matter of law.