United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR R S SYMONDS (Representative) Tameside Welfare Rights Unit 200 Market Street Hyde Cheshire SK14 1HB
For the Respondents	MRS P A JONES (Solicitor) Messrs Hempsons, Solicitors Portland Tower Portland Street Manchester M1 3LF


 


JUDGE J HULL QC: This is an appeal to us by Mrs Eileen Mary Frith, a lady who served for years as a medical receptionist. She was employed as receptionist by Dr Hague at Stalybridge, Cheshire, in 1985 or 1986 (the date varies in the papers) and that was a small practice and she was employed part-time. There was another receptionist and, so far as we know, the employment was entirely successful and happy and she served well, but there came a time when Dr Hague wished to retire.

There were further complications in connection with that, because Dr Hague owned the premises in which the practice was carried on and, as it emerged, wished to sell them. So that put the Family Health Services Authority (FHSA) into certain difficulties, because of the need for a smooth handover, if they could achieve one, in which the patients of Dr Hague (who numbered something like 2,000) would be properly cared for.

What they did first of all was to appoint a locum when Dr Hague retired on 31 October 1995. Dr Hague retired then, but he was prepared to allow his premises to be used and a locum, a Dr Nkowolo, took over, on the basis that it was a short-time appointment. He provided, so we are told, a rather limited service to Dr Hague's patients. On this occasion the FHSA wrote a letter which is at page 7 of our papers. The Family Health Services Authority, by Mrs Simpson, wrote to Mrs Frith and, I believe, also to her colleague and the letter said as follows:

"Please find enclosed 2 copies of your temporary contract of employment. I should be grateful if you would retain one copy yourself and sign the second copy and return this to me. This letter forms part of that contract.

The period of employment covered by the contract will run from 1st November 1996 until the date the successor to Dr R. Hague is included in the Authority's Medical List. At that time the temporary contract will be terminated and it will be for the incoming doctor to negotiate a new contract with each employee.

Dr F. Nkowolo has agreed to act as the Authority's locum during this interim period.

The attached contract is offered on the same general terms and conditions of service as you currently enjoy, inclusive of salary and annual leave as notified to this office, and we will give you as much prior notification as possible if there is any change to this arrangement."

We can find what was sent to Mrs Frith at page 21, describing itself as a "Temporary Contract of Employment". It was found by the Industrial Tribunal in due course that the terms in fact were identical in all material respects with those which Dr Hague had offered to Mrs Frith and which she had been working under for all these years.

Now this, as the Industrial Tribunal later found, and it is not the subject of any appeal to us, was the transfer of an undertaking. It may sound a little strange but the Transfer of Undertakings (Protection of Employment) Regulations 1981 are made in accordance with the employment legislation and it is well established, of course, that a professional practice is a business for many purposes, including the purposes of the Employment Protection Act. So what was happening was that there was a transfer and provided that Dr's Hague's practice was carried on by a successor there would be a further transfer under the Transfer of Undertakings (Protection of Employment) Regulations 1981.

It is obvious at this stage that there was a misunderstanding by Mrs Simpson (who, no doubt, has many responsibilities and perhaps is not an expert on employment law) of the position. On the face of it, Mrs Frith's employment would continue because the Transfer of Undertakings Regulations 1981 create a statutory novation and Regulation 5 of the Regulations provides:

"(1) a relevant transfer [as it is called] shall not operate so as to terminate the contract of employment of any person employed by the transferor in the undertaking or part transferred but any such contract which would otherwise have been terminated by the transfer shall have effect after the transfer as if originally made between the person so employed and the transferee."

And then there are consequential provisions later in the Regulation and, indeed, in other Regulations, relating to that. But the basic principle is that, on the transfer of an undertaking, the employees of the undertaking go with the undertaking. It does not mean, of course, that they cannot be dismissed and that dismissal may very well be an unfair dismissal.

So one has to look at the letter of 19 October 1995 in the light of that. It is evident that Mrs Simpson had not mastered the mysteries and difficulties of statutory novations and matters of that sort and did not understand them, but (if I can put it like this without offence) her heart was in the right place; her intention was that which European law and the Transfer of Undertakings Regulations require it to be, that is to say, that the employment should continue during the interregnum. So what she did, on the face of it, was to offer a new contract in the same terms and she called it a "Temporary Contract of Employment". The Industrial Tribunal found that, indeed, Mrs Frith did continue, on a temporary basis so to speak, in Dr Hague's old practice.

Then there arose the question of a permanent successor for Dr Hague, to take over from Dr Nkowolo. The authority had to look for a successor. It was not possible, in all the circumstances, to find a successor simply to take over from Dr Hague. What happened was that another local doctor, a Dr Sarah Kellett, was prepared to take over the patients. She already had her own practice locally with her partners, about 600 yards away, and her application, which was considered with others by the Family Health Service Authority, was accepted and it was decided that Dr Kellett should take over the practice and the patients would be transferred. They would have to go to premises near-by where Dr Kellett carried on her practice and, inevitably, there were going to be certain teething troubles on the take-over, because all the documentation and so on of 2,000 patients would have to be transferred to Dr Kellett's premises and Dr Kellett's practice used a special computer system for keeping track of all the patients; that had not been Dr Hague's practice, apparently, so there were going to be some transitional difficulties.

There was then a further complication because one at least of those who had applied to take over Dr Hague's practice exercised his or her right of appeal, so that Dr Kellett could not be appointed on a permanent basis. Dr Kellett could only take over, as the Family Health Services Authority wished, on a temporary basis while the appeal was determined; so that was another complication.

Dr Nkowolo was going to cease acting as locum on 4 February 1996. A letter was written on 29 January, again by Mrs Simpson, and this is the letter with which we are concerned. Mrs Simpson wrote to Mrs Frith:

"I am writing to inform you that Dr F Nkowolo will cease his locumship to the list of Dr R Hague with effect from Friday, 2nd February 1996 and that the temporary contract of employment issued to you by the Authority will cease on Sunday, 4th February 1996.

Dr S H Kellett has been appointed as locum until such time as Dr Hague's permanent replacement is able to take up the appointment and she will provide services from her existing surgery premises at Grosvenor Medical Centre, Grosvenor Street, Stalybridge.

I appreciate you may have concerns regarding your future employment and I have, therefore, requested Dr Kellett to contact you as a matter of urgency to discuss and hopefully resolve this subject to your mutual agreement.

I will be visiting the surgery on Friday, 2nd February to re-check the inventory of fixtures and fittings and arrange for the transfer of medical records and hopefully we can resolve any outstanding issues at the same time."

This was signed by Mrs Simpson and, putting it very shortly, the contention which was made before the Industrial Tribunal and by Mrs Simpson to us today, again, was that this was a plain letter of dismissal. It was a termination by the employer of the contract of employment of Mrs Frith.

What happened thereafter can be shortly told. Mrs Frith duly reported on the Monday at the new premises, as they were to her, hoping to take up her employment with Dr Kellett; conditions were chaotic that first day. There was a good deal of confusion. There were a number of patients who, perhaps inconsiderately, were anxious to call upon Dr Kellett at the earliest possible opportunity. As I said, Mrs Frith was not familiar with the system and not able to operate it and, to add (so to speak) insult to injury, she thought that she had been spoken to rather brusquely by the practice manager. So far from her efforts being appreciated, it must have seemed to her that she was being treated in a rather off-hand or unsatisfactory way when, in fact, she was doing her very best. So in those circumstances she resigned. It was found by the Industrial Tribunal, again we must accept this, that there was no question of her being treated badly in the sense of entitling her to resign; this was a crisis situation, crises do occur from time to time and employees are expected to do their best to help the employer to resolve them. To cut a long story short, the Tribunal did not think that she was entitled to accept her treatment as ending her contract of employment.

So they were left with the question whether this letter of 29 January 1996 was, indeed, a dismissal of the employee; that is to say, a termination of the temporary contract of employment, as Mrs Simpson quite wrongly called it, by the Authority.

The Industrial Tribunal enquired into the facts. It is their prerogative to look into all these facts and, indeed, what I stated of the facts is based entirely on the findings of the Industrial Tribunal. They considered a large number of matters. They made a number of findings with which we agree. They said among other things, in paragraph 13, that the fact that an employer tells an employee that the employment situation is temporary and that it might change for good reason in the future is not, in the circumstances of this case, a breach of any term, fundamental or not. They went on to say:

"Of course employees who are warned of the possibility of changes in the future in their employment or even the possibility of dismissal for redundancy may wish to seek employment elsewhere for their own reasons of feelings of security but we do not accept that that alone is a breach of contract. We find there was nothing in the circumstances here which was unnecessarily uncertain or cruel."

And they went on to find that there was a resignation. Mrs Frith, they say, resigned and was not dismissed on 6 February 1996. Then they go to Mr Symonds' submission. They deal with various submissions by Mr Symonds which they rejected and which are not the subject of an appeal to us and they say in paragraph 17:

"We come to the conclusion that in this case what we have was a relevant transfer of an undertaking within the meaning of the 1981 Regulations"

And they refer to authority for that. Then they go on in paragraph 18:

"In that situation Mr Symonds submitted that there had been an express dismissal by the letter at page 31 [that is the letter I referred to as being the letter of 29 January] ... on 4 February 1996 and he submitted that as a result the applicant was entitled to rely on that dismissal by the FHSA."

He submitted it certainly was not a nullity. He made to the Tribunal, and he made to us, a submission which we accept; that it does not follow, simply because employment is, on the face of it, to continue with the new employer under the Transfer Regulations, it is impossible, as a matter of law, for the first employer to dismiss his employees. Of course that is so. We accept that. It is perfectly open to an employer unambiguously to dismiss an employee shortly before the transfer. There may be all sorts of consequences to that, but it is open as a matter of law.

And the Tribunal go on in paragraph 19:

"We accept that an express dismissal can indeed be a valid dismissal, at least for some purposes, even if the employee continues in employment. Indeed, that is so whether the employee continues with another employer as in the Meade case or with the same employer. However, we do not accept that in the circumstances of this case the letter at page 31 was properly construed as an express dismissal. We do not accept that it did give rise to liability for unfair dismissal or redundancy. Mr Symonds argued that the letter must be a dismissal because its purpose is to tell the applicant that her temporary contract with the Authority will cease on the given date. He submits that that is a dismissal without more."

And then they go on in paragraph 20:

"We think the proper construction of the actual events in this case is that the letter at page 31 is not a letter of dismissal despite its reference to the temporary contract ceasing, because, in our view, the letter as a whole is informing the applicant of a change of employer. The words 'temporary contract of employment ... will cease' are to be read in the light of the other information given in the letter which is that Dr Kellett will be taking on the practice. Before the date given that was further clarified by the oral discussion between the applicant and Dr Kellett."

Now were the Tribunal entitled to reach their conclusion as a matter of law? We have already said that it is clear to us that Mrs Simpson, who wrote the two letters, the letter of 19 October and the letter of 29 January, was quite unacquainted with the law of the Transfer of Undertakings. On 19 October she erroneously said that what she was asking Mrs Frith to do was to enter into a temporary contract. Mrs Frith in fact did continue on the same terms so at that point Mrs Simpson was mistaken about the legal effect of what was happening. The contract of employment had not been terminated and there was no new contract.

We have to look at that; that is one of the circumstances and then this second letter is quite plainly hoping and intending that the service of Mrs Frith will continue with Dr Kellett. It is purporting, it is true, to say that the temporary contract of employment which, as I say, did not exist as a matter of law (it was simply a continuation of her previous contract) would cease. It was, to use the Latin expression, brutum fulmen, this letter. It had, on the face of it, no effect because there was not a temporary contract of employment. Her employment was continuing as it should do with the new employer on identical terms. It was hoped that Mrs Frith would continue. Mrs Frith indeed did. If you look at this letter, it was not a termination.

If Mrs Simpson had been, in fact, intending lawfully to terminate the contract of employment the notice which she gave was wholly inadequate. Was it open to the Tribunal to say, as they were saying it seems to us, "What was going to happen was that your contract (it was hoped) would continue with the new employer and in those circumstances, what Mrs Simpson was pleased to call the 'temporary contract', that is to say the relationship of employer and employee which existed with the Family Health Services Authority, would cease?". In our view that is a perfectly permissible view in law of what was taking place.

The Tribunal were entitled to take that view. Certainly, if Mrs Frith had been legalistically minded, had been (if you like) an amateur lawyer or even a professional lawyer and had endeavoured to look at this with a lawyer's eye when she got this letter, she would have said to herself, "I have already had one letter which shows that Mrs Simpson is quite unacquainted with the legal position; here is another letter. Even supposing that this is a case of a temporary contract of employment which is now coming to an end, am I bound to accept this letter? Certainly not. I am entitled to insist on my rights under the Transfer Regulations and look to my new employer to continue my employment on the same terms". We are not, of course, saying for one moment that she was saying that, but it seems likely that the attitude of Mrs Simpson and what she wrote was coloured by some sort of understanding of the true position. We think that the Industrial Tribunal was fully entitled in the circumstances to say that this letter was not, on a true view, which included all the surrounding circumstances, a letter of dismissal. It merely purported to say that a temporary contract (which was something which, it seems to us, existed only in the mind of Mrs Simpson and perhaps of Mrs Frith) was going to come to an end; and that was, as a matter of common-sense, it might be said from a layman's point of view, exactly what was going to happen, although the law would say otherwise.

So in those circumstances we feel obliged to reject Mr Symonds' submission. The rest of the story is shortly told. The Industrial Tribunal, to whom she complained, held that the contract had not been terminated by the FHSA, and so what they held was that she had resigned; she was not the subject of a constructive dismissal by her employers and therefore she had no remedy in her complaint of unfair dismissal. They did pause to envisage the possibility that, in those circumstances, it might be said that she could not complain that she had been dismissed because of the provisions of the Transfer Regulations and the statute, but they did not go into that.

We are not saying that they were bound to find in the way that they did, or that we would have found in the same way that they did. They were the ones who had to find the surrounding circumstances and give the proper weight to them; those are matters of fact for them.

The only question of law for us is whether they were entitled to construe this letter of 29 January, in the light of those circumstances, in the way that they did. We are unanimously of the opinion, and this is our judgment, that they were entitled to do that. The appeal must be dismissed.