United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	THE APPELLANT IN PERSON
For the Respondents	MR FLETCHER (Solicitor) Messrs Jacksons Solicitors 1-15 Queens Square Middlesborough TS2 1AL


 


MR JUSTICE KEENE: The facts of this case are relatively simple but they give rise to a number of points of law.

In July 1995 the appellant applied for a post with the respondent Heath Authority as an Ultrasound Manager. She was interviewed on 26th July 1995 and orally offered the job. On 14th August 1995 the respondents' Assistant Divisional Personnel Manger wrote to her "confirming the offer of appointment to the above post, commencement to be arranged." The letter then dealt with hours of work and salary, and sought written acceptance of the post. The appellant duly wrote on 22nd August 1995 accepting the offer and indicating that she would be available to start from 1st October 1995 as agreed with Mr Willetts, the respondents' Divisional Manager. On 25th August 1995 the respondents sent a formal letter of appointment to the appellant to which was attached a document headed "South Tees Acute Hospitals NHS Trust: Particulars of Employment". The letter referred to a "start date" of 1st October 1995 and this was confirmed in the Particulars of Employment. The Particulars provided that she was required to give two months' notice of termination of her employment.

However, something caused the respondents to seek from the appellant a commitment to work in the post for a minimum of six months. They wrote in those terms in a letter dated 5th September 1995 which was faxed to her the same day. On 6th September there was a telephone conversation between Mr Willetts and the appellant indicating that the Trust was withdrawing the offer of employment and this was confirmed in a letter from the respondents to the appellant dated 11th September 1995.

The appellant brought a complaint before an Industrial Tribunal, alleging breach of contract and wrongful or unfair dismissal on grounds of asserting a statutory employment right. At a hearing at Newcastle-upon-Tyne, the appellant contended that she was entitled to pursue a claim under s.131 of the Employment Protection (Consolidation) Act 1978 ["the 1978 Act"] for damages for breach of contract. That Act has now largely been repealed and reproduced in the Industrial Tribunals Act 1996 and the Employment Rights Act 1996, but that was not so at the time of the tribunal's decision. A tribunal Chairman sitting alone determined by a decision dated 29th March 1996 that the tribunal did not have jurisdiction to determine her claim under s.131 of the 1978 Act and the Industrial Tribunals (Extension of Jurisdiction) (England and Wales) Order 1994.

The appellant now appeals from that decision. There is a cross-appeal by the respondents on the issue of whether there was a contract of employment at all.

The tribunal Chairman found first that the appellant had entered into a contract of employment and not merely into a collateral contract as had been argued by the respondents. He concluded therefore that she was an "employee" within the meaning of s.153(1) of the 1978 Act. However, he also concluded that her claim was not one which fell within Article 3(c) of the 1994 Order, because it was not a claim which "arises or is outstanding on the termination of the employee's employment." The tribunal's reasoning was that her employment had not commenced at the date of the alleged breach of contract and would not commence until 1st October 1995, and therefore termination of her employment never occurred. In the tribunal Chairman's words "This was because her employment did not begin." Consequently, he found that the tribunal did not have jurisdiction to deal with the s.131 claim. No mention was made in the decision of any other claim arising out of her Originating Application.

The appellant's main ground of appeal is that the tribunal misinterpreted the statutory provisions and the wording of Article 3(c) of the 1994 Order and should have found that it had jurisdiction to deal with her claim under s.131 of the 1978 Act.

S.131, as it stood after amendment by the Trade Union Reform and Employment Rights Act 1993, read as follows, in so far as is material to the present case:

"(1) The appropriate Minister may by order provide that proceedings in respect of-

(a) any claim to which this section applies, or

(b) any such claim of a description specified in the order,

may, subject to such exceptions (if any) as may be specified in the Order, be brought before an industrial tribunal.

(2) Subject to subsection (3), this section applies to any of the following claims, that is to say-

(a) a claim for damages for breach of a contract of employment or any other contract connected with employment;

(b) a claim for a sum due under such a contract;

(c) a claim for the recovery of a sum in pursuance of any enactment relating to the terms or performance of such a contract;

being in each case a claim such that a court in England and Wales or Scotland, as the case may be, would under the law for the time being in force have jurisdiction to hear and determine an action in respect of the claim."

Nothing for present purposes turns on subsection (3) of that section. Under the authority of that section, there was made the 1994 Order, which took effect on 12th July 1994. Not surprisingly there has been little judicial pronouncement so far on its interpretation. Article 2 makes reference "the effective date of termination" as defined in s.55(4) of the 1978 Act. It reads as follows:

"This Order does not enable proceedings in respect of a contract claim to be brought before an industrial tribunal unless-

(a) the effective date of termination (as defined in section 55(4) of the 1978 Act) in respect of the contract giving rise to the claim, or

(b) where there is no effective date of termination, the last day upon which the employee works in the employment which has terminated,

occurs on or after the day on which Order comes into force."

The Article 3 is the crucial provision for present purposes. It provides:

"Proceedings may be brought before an industrial tribunal in respect of a claim of an employee for the recovery of damages or any other sum (other than a claim for damages, or for a sum due, in respect of personal injuries) if-

(a) the claim is one to which section 131(2) of the 1978 Act applies and which a court in England and Wales would under the law for the time being in force have jurisdiction to hear and determine;

b) the claim is not one to which article 5 applies; and

(c) the claim arises or is outstanding on the termination of the employee's employment."

So far as paragraph (b) of that Article is concerned, it is not suggested that the claim in the present case is barred by Article 5. At issue in this appeal is whether the appellant's claim "arises or is outstanding on the termination of the employee's employment" as required by paragraph (c). The cross-appeal raises the issue of whether the requirements of paragraph (a) are met, since s.131(2) of the 1978 Act only applies to monetary claims arising in respect in certain contracts. Thus s.131(2)(a) only applies if the claim is one for damages for breach of a "contract of employment" or any other contract connected with employment. The cross-appeal challenges the tribunal Chairman's finding that the contract in the present case was a contract of employment.

The appellant, who has appeared in person and argued her case with considerable skill, emphasises that she was under an obligation to work for the respondents as a result of the contract because she had agreed to give two month's notice of termination of the contract. Even if she had given such notice on 8th September 1995 she would have been obliged to work for the Trust from 1st October 1995 until 8th November 1995. She points out that the obligations of her contract were not contingent or conditional but were quite specific and enforceable as from 1st October 1995. She criticises the way in which the tribunal Chairman relied upon the definition of "continuous employment" in the Act in arriving at his decision and submits that this present case is not dependent on that definition. That definition of continuous employment expressly includes the phrase "starts work", which has nothing to do with the issues in the present case. In her submission she was "employed" under her contract, even though the obligation to start work did not operate until 1st October 1995. Finally on a practical point she draws attention to the fact that when her contract of employment was terminated by the respondents she had already given notice of her intention to leave her previous employers. In consequence the respondents' action had effectively made her unemployed as from 1st October 1995 and thus in a considerably worse position to that which she had previously enjoyed.

On behalf of the respondents Mr Fletcher concedes that there was a contract arising from the exchange of correspondence. The issues in his submission are the nature of that contract and where it is enforceable. In his cross-appeal he argues that the contract here was merely a contract for employment and not a contact of employment. The latter would, it is said, be constituted by the employee turning up for work on the appointed day and his or her offer to work being accepted by conduct on the part of the employer. On the appeal itself, the respondents seek to uphold the tribunal's reasoning that the appellant's employment had never begun and so there could not have been a termination of it as required under the 1994 Order. Reliance is placed on the Employment Appeal Tribunal decision in General of Salvation Army v Dewsbury [1984] ICR 498.

Logically, it makes sense to deal first with the issue raised on the cross-appeal. Was the tribunal below right in finding that this contract was a "contract of employment" or at least a "contract connected with employment"? The definition of a contract of employment in s.153(1) of the 1978 Act is not of great assistance on this. It merely states:

" "contract of employment" means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether it is oral or in writing."

But we say straightaway that we regard the tribunal as having come to the correct conclusion on this aspect of this case. The respondents' argument that this was an agreement to enter into a contract of employment on 1st October 1995 is not a persuasive one: no further contract between the parties was required. As and when the appellant turned up for work on 1st October, she would have been performing the contract already entered into, not making a fresh offer which the respondents would then accept by allowing her to work and paying her. The mere fact that the duties would only be performed on a date subsequent to this contract having been entered into cannot take it outside the concept of a contract of employment. If it were otherwise, a very large number of contracts would not be contracts of employment, even though they were entered into perhaps only one day before the individual began actually performing his or her duties for the employer.

We can see no reason why one should postulate the need for a further contract between the parties in such cases, a contract which would then be described as the contract of employment. There is a single contract, of which there may be an anticipatory breach if one party gives unequivocal notice that he will not perform his side of it. That was exactly the situation which occurred in Hochster v de la Tour [1853] 2 E and B 678.

Consequently on this issue, we agree with the tribunal Chairman's decision at page 3, paragraph 2 that this was a contract of employment, the performance of which was not to start until 1st October 1995.

Having so found, we return to the main issue raised the appeal itself, which is the interpretation of Article 3(c) of the 1994 Order. Was this a claim which "arises or is outstanding on the termination of the employee's employment"? "Employment" is defined in s.153(1) of the 1978 Act as meaning "employment under a contract of employment". That does not greatly advance matters, except that it does as Mr Fletcher says seem to recognise a difference between "employment" and a "contract of employment". That is at the heart of his argument. "Termination" is not as such defined in the 1978 Act or the 1994 Order but the whole of Part IV of the Act is entitled "Termination of Employment". It then in the following sections deals with that topic by reference to the termination of the contract of employment: see ss.49, 50 and 53. Thus the draftsman of the statute is sometimes prepared to abbreviate the termination of the contract of employment to the phrase "termination of employment."

In any event that Part of the Act shows an emphasis on the contract of employment when dealing with termination of employment. The same is true of the provisions relating to unfair dismissal in Part V of the Act. When it comes to deal with the "effective date of termination", a vital concept for many purposes including the calculation of the period within which a complaint to an Industrial Tribunal can be brought, s.55(4) defines it principally in terms of the termination of the contract of employment:

"(4) In this Part "the effective date of termination"-

(a) in relation to an employee whose contract of employment is terminated by notice, whether given by his employer or by the employee, means the date on which that notice expires;

(b) in relation to an employee whose contract of employment is terminated without notice, means the date on which the termination takes effect."

Consequently there will be an effective date of termination when the contract of employment is terminated with or without notice. In the present case there is no dispute that the appellant's contract was terminated. It would seem strange if one could have an effective date of termination and yet no termination of the employee's employment. It is important that the concept of an effective date of termination is used in the 1994 Order itself: see Article 2. It must therefore be seen to have some bearing on the approach to be adopted to the interpretation of Article 3. The meaning of "dismissal", set out in s.55 of the Act, also focuses attention on the termination of the contract of employment; we shall return to that provision later in this judgment.

It is conceded by the respondents that, if the contract here was a contract of employment as we have concluded that it was, then the appellant was an "employee". This follows inevitably from the interesting definition of "employee" in s.153(1) of the Act:

" "employee" means an individual who has entered into or works under (or, where the employment has ceased worked under) a contract of employment".

Thus it is enough that the individual has entered into a contract of employment - he or she is then an employee, even if he or she has not actually started performing the appropriate duties under the contract of employment. This is clearly a deliberate piece of drafting by the legislature, which could have simply defined an employee as someone who works under or worked under a contract of employment. It chose to make the definition of employee wider than that.

But if the appellant was an employee and her contract of employment has been terminated, can it then be said that her employment has not been terminated? It is difficult to see how one can have an employee without there being also employment, and yet the tribunal's decision was that there never had been any employment of the appellant.

Of course, one can see the force of the tribunal Chairman's approach based on the concept of a "period of continuous employment" in s.151 of the Act. That phrase is expressly defined in s.151(3), so that the period of continuous employment begins:

"... with the day on which he [the employee] starts work."

In the Salvation Army case (ante) there was a contract made on or about 1st April 1982, under which the teaching post offered to and accepted by the respondent would commence on 1st May 1982. The 1st May was a Saturday and 3rd May was a Bank Holiday, so that the respondent only undertook her duties as from Tuesday, 4th May. This became highly significant for the calculation of the period of continuous employment. The issue was whether she had "started work" on the Saturday or only on the Tuesday. The Employment Appeal Tribunal held that this referred to the Saturday, saying that:

"The phrase "starts work" in section 151(3) is not intended to refer to the undertaking of the full time duties of the employment: it is intended to refer to the beginning of the employee's employment under the relevant contract of employment."

Implicit in that statement is the view that her employment began at the stipulated date when her duties were to commence.

However, it has to be born in mind first that no party there was considering the situation as from the date when the contract of employment was entered into and thus the Employment Appeal Tribunal was not asked to apply its mind to the relevance of that date; and secondly, the Employment Appeal Tribunal was dealing with the specific concept of the "period of continuous employment" and its detailed definition in s.151(3). In effect, it was interpreting the words "starts work". That is a different task from the one which faces this appeal tribunal.

Nonetheless, it does seem that the language used in the statute under which the 1994 Order was made points in different directions and to different conclusions on this issue of the interpretation of Article 3(c) of the Order. Were we to stop at that point, we would be inclined to conclude, somewhat tentatively, that the tribunal was wrong in its conclusion. But given these difficulties of interpretation, we have thought it right to adopt a purposive approach to the task of interpretation. We have therefore asked ourselves what is the purpose of the restriction contained in Article 3(c).

In a narrow sense, the purpose is to prevent an employee bringing a s.131 claim in a tribunal during the continuation of his or her employment. Why should that be an objective of the legislature? The answer to that takes one to the purpose of the 1994 Order itself. As the respondents accept, this Order extending the jurisdiction of Industrial Tribunals is intended to avoid the situation where an employee (or for that matter an employer) is forced to use both a tribunal and a court of law to have all his or her claims determined. In simple terms, the purpose of the extension of jurisdiction was to enable an Industrial Tribunal to deal with both a claim for unfair dismissal (which we take as an obvious example) and a claim for damages for breach of the same contract of employment. Two sets of proceedings are thus avoided.

This seems to us to provide a further test of the correct approach to Article 3(c). If an employee were able to bring a claim for unfair dismissal in a given situation in an Industrial Tribunal, prima facie it would be a sensible interpretation which allowed him or her also to bring a claim for breach of contract in the same forum.

It might be thought that this would point away from the appellant's interpretation, because normally two years' continuous employment is required for an unfair dismissal claim: see s.64(1) of the 1978 Act. But that is not so where the unfair dismissal claim is based on an inadmissible reason for dismissal within s.64(3). Thus an employee dismissed for pregnancy or for a reason connected therewith can bring a claim for unfair dismissal without the need for any qualifying period of employment: s.60(a). So can someone dismissed because it has been discovered that he is a member of a trade union. Could someone in the appellant's position claim for unfair dismissal if her contract of employment was terminated for an inadmissible reason before she has actually taken up her duties? Neither we nor the parties to this appeal can find any authority directly on that point. The answer turns on whether she would have been "dismissed" within the meaning of s.55(2) of the 1978 Act. That states, in so far as material to the case:

"(2) Subject to subsection (3), an employee shall be treated as dismissed by his employer if, but only if,-

(a) the contract under which he is employed by the employer is terminated by the employer, whether it is so terminated by notice or without notice, ..."

Subsection (3) is not relevant for present purposes. There is no doubt that the contract in the present case was terminated by the employer, but Mr Fletcher argues that the employee would not have been employed under that contract, and therefore could not claim for unfair dismissal. We disagree. We have already pointed out that someone is an "employee" merely because he or she has entered into a contract of employment. If that is so, to construe the word "employed" in a different and more demanding way seems to us to be unjustified. Moreover, we cannot see why someone engaged under a contract of employment to start work at a future date but whose contract is then terminated because it is discovered that she is pregnant or that he or she is a member of a trade union should not, as a matter of principle, be able to claim for unfair dismissal. He or she may already have given notice to his or her previous employer, as happened in the present case. That ability so to claim would make available the remedy of reinstatement which would not be available merely by proceedings taken in a court of law.

If this is so, it reinforces the view which we had tentatively formed on the wording of the Act. If such a person could bring a claim for unfair dismissal, it is right that he or she should be able to bring before the same tribunal a claim under s.131 for damages for breach of the contract of employment. We therefore conclude that the phrase in Article 3(c) of the 1994 Order "the termination of the employee's employment" is to be construed by reference to the termination of the contract of employment, an approach which as we have indicated is widely used throughout this legislation. It follows that the tribunal was wrong to decline jurisdiction.

We can deal shortly with the remaining grounds of appeal. It is contended by the appellant that the Chairman did not have jurisdiction to deal with these matters when sitting alone. In support of that, reference is made to the decision of this Appeal Tribunal in Mobbs v Nuclear Electric [1996] IRLR 536. That decision has since been disapproved of in the more recent Employment Appeal Tribunal decision of Tsangacos v Amalgamated Chemicals Ltd [1997] IRLR 4. But in any event, those decisions are concerned with Rule 6(1) of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations 1993. In our view the Chairman in the present case had jurisdiction when sitting alone by virtue of s.128(2C) of the 1978 Act, which empowers a Chairman sitting alone to hear certain matters. Those include:

"(c) proceedings is respect of which an industrial tribunal has jurisdiction by virtue of an order under section 131."

It is implicit in that that such a Chairman sitting alone is empowered to determine whether he has jurisdiction by virtue of such an order, which was what this Chairman determined. He was entitled to do so.

Finally, Miss Sarker contends that the Chairman failed to deal with her claim for unfair dismissal, which did indeed form part of her Originating Application. On the face of the decision, she is right. On the other hand he did not expressly reject that claim. It may be that he thought that he did not have jurisdiction sitting alone or that it was obvious that that claim could not succeed, because it was not a case where dismissal was for an inadmissible reason and yet the appellant did not have two years continuous employment. She has contended before us that she was dismissed for an inadmissible reason, namely because she would not agree to a term requiring her to give six months notice. She argues that this comes within s.60A of the 1978 Act, on the basis that she was asserting her statutory right as to notice.

As this case is going to be remitted anyway to the tribunal, it is a matter for it to determine that question. We would only comment that we regard the appellant's arguments on this point as misconceived. Her statutory right related to the minimum notice she was to receive from the employer, not to the notice which she was to give; in so far as the statute deals with the notice she was to give, it merely specified a minimum and for the employer to seek a higher period of notice from her would not infringe that; and in any event, she had already agreed under her contract to give two months notice to her employer, more than the statutory minimum. We would be surprised, therefore, on the facts as we understand them to be, if the appellant were entitled in this particular case to bring a claim for unfair dismissal. But the facts are a matter for the Industrial Tribunal. It will have to find them and to determine this claim.

For the reasons which we have given, we conclude that the tribunal was wrong to determine that it had no jurisdiction to deal with the claim under s.131 of the 1978 Act. It had jurisdiction, and in that respect this appeal is allowed. The matter will be remitted to the tribunal for it to deal with that claim and with the unfair dismissal claim. The cross-appeal is dismissed.