United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR A CHAMBERS (of Counsel) Susan Heads & Co Solicitors 18 Redhill Wood New Ash Green Kent DA3 8QH
For the Respondent	MR G MORTON (of Counsel) Citizens Advice Bureau Town Hall Clarence Road Bognor Regis West Sussex PO21 1LD


 


MR JUSTICE MORISON (PRESIDENT): This is an appeal by former employers against a decision of an Industrial Tribunal held at Brighton on 1st May 1996. By that decision the tribunal unanimously concluded that the former employee, the applicant, was entitled to damages for breach of her contract of employment, and the respondent was ordered to pay her damages of £10,775.00.

Following a preliminary hearing, this Court ordered that the appeal come on for a full hearing. This morning the appellant former employers have had the advantage of being represented by Mr Chambers to whom we are grateful for his arguments.

The background facts need to be set out with some care. Miss Cox, the respondent to this appeal, had been working in the crane hire business at a place called Ford. She was a successful employee, in the sense that she gave satisfaction to her employers. She was good at her job which she apparently enjoyed doing. She had been employed by that company at Ford for some five years and for the last eighteen months of her employment there had been the Hire Desk Controller, and was thus in an important position regarding the taking of orders and understanding the local demand. For the last two years of her employment, a Mr David Bucknall had been her manager and he had a very high opinion of her abilities.

The company by which they were both employed was in the process of being taken over. Against that background Mr Bucknall was approached by a director of the appellant company, Silwood Crane Hire (UK) Ltd, and he was invited to work for them at their depot at Belvedere. He was unwilling to go there because he lived in West Sussex. However, they suggested to him that there might be opportunities for Silwood to open a depot in West Sussex, in fact in Ford, and they suggested that Mr Bucknall might like to be the manager of this new business. A series of meetings and telephone calls took place between Mr Bucknall and the Silwood company. In the course of those discussions he indicated that he would only be willing to consider taking up the position if Miss Cox agreed to transfer with him to the new depot, and accordingly he approached her and had discussions with her about the possibility of her transferring to this new venture.

She was sent a draft contract of employment and she was insistent that she should be protected from the possibility that having become an employee of Silwood she could find herself being transferred by them to their depot at Belvedere, which would have been unacceptable to her for domestic reasons. Accordingly she sensibly insisted that her contract of employment should contain within it a clause limiting her work place area to a 10 miles radius from Ford. She also sensibly insisted, it would appear, that she should be given a two year contract which was only to be terminable in the event of gross misconduct. That would have given her some comfort and some inducement to her to leave her stable employment to start off with what was a new venture for the Silwood company in the Ford area. Accordingly, in due time, she entered into a contract of employment which provided, so far as is relevant:

"The term of this employment contract is for a period of not less than 2 years for either party and is only terminated if you the employee has committed gross misconduct."

and at paragraph 4:

"During the term of your employment your place of work will be within a 10 mile radius of the new depot which is Ford, Sussex."

During the course of discussion between Mr Bucknall and Silwood, Mr Bucknall produced a business plan which represented his estimation of how the new business might turn out. It was apparent from the face of the business plan itself that it had been produced by one individual. Thus under the heading "Fleet" in the business plan it said initially:

"I think 5 cranes is the correct number to start with."

And under the "Monthly Budget Projections" this sentence appears:

"Once the fleet is at say 14 or 15 units further office help would be required, either a rep to take the pressure off me on the road to enable me to work more in the office, or a girl to help in the office."

Things did not turn out as had been hoped. There is a dispute as to why that was so. Mr Bucknall had wanted a free hand. He says that he was not given a free hand by Silwood. Mr Bucknall says that he should have been provided with better equipment than Silwood provided to him, and for those and other similar reasons the venture did not prove as immediately successful as he had anticipated it would have been. The Silwood company apparently were of the view that the position had been misrepresented to them, and they were losing more money than they had anticipated in the early months, and accordingly had decided to close down the operation.

In that context, a letter of dismissal was sent to Miss Cox:

"It is with great disappointment that we have to terminate your employment with the company.

We agreed to employ you on the basis of yours and David's business plan of the 3rd September 1995 and relying upon both your representations about projected trade which was based solely upon your local expertise.

...

The level of trade is dramatically per month lower than the level that was promised.

...

Due to your poor performance, which can be seen from the level of trade, the company has suffered a substantial loss. Losses at this level cannot be sustained any longer.

...

After careful consideration of all the options, and in order to safeguard the company, we have been compelled reluctantly to take the decision to terminate your employment."

They indicate in the letter that:

"We have paid your salary up until the end of December and we herewith enclose your cheque and P45."

Thereafter Miss Cox filed a complaint to an Industrial Tribunal contending that she was entitled to damages for wrongful dismissal. She set out the periods of her employment, and in her IT1 at box 12 she said:

"1. I was head hunted by Silwood Crane Hire UK Limited to work at a new office in Ford.

2. I had a written contract of employment guaranteeing me work for a period of not less than 2 years. The employment could only be terminated if I committed gross misconduct.

3. I commenced employment on 11 October 1995 and was dismissed with less than one month's notice on 8 December 1995.

4. I had not committed gross misconduct and therefore claim that my contract was breached as the company failed to provide me with two years work.

5. I claim the balance of my salary for the two years - £27,000."

The respondents were required to file a Notice of Appearance to that claim if they wished to defend these proceedings. They had the benefit of being advised by solicitors who filed a Notice of Appearance on their behalf. In that Notice of Appearance they said at box 4 that they accepted that the applicant was dismissed; they asserted that the reason for the dismissal was "gross misconduct", and their case was advanced in this way at box 7 of the form IT3 giving particulars of the grounds on which they intended to resist the application:

"The Applicant was engaged by the Respondent on the basis of a business plan dated the 3rd September 1995 prepared by her and one David Bucknell and upon oral representations made by her to directors of the Respondent Company, namely Mr M Lee and Mr R Ward.

...

Relying upon the Applicant's representations, the Respondent had made a considerable financial investment in establishing, fitting out and stocking premises at Ford ...

After the commencement of her employment, the applicant's capability and performance of her duties, were found to be below the standard that she had represented she would and could perform.

...

The Applicant's lack of ability and poor performance caused the Respondent to suffer financial loss. ...

In mitigation of its losses, by a letter dated the 11th December 1995, the Respondent dismissed the Applicant for misrepresentation and misconduct and further because she was not capable of performing the duties for which she had been engaged."

It will thus be apparent that the issues before the Industrial Tribunal related to alleged misrepresentations made by her to the company, both in preparing with David Bucknall the business plan, and in making oral representations to directors of the respondent company. It is further clear that it was the company's contention that she had made representations as to her capability and performance of her duties.

At the tribunal hearing the applicant, Miss Cox gave evidence. During the course of her evidence she made it plain that none of the allegations made against her by her former employers was justified. She said:

"I never spoke to the respondents until the day I signed my contract on 8 September 1995.

I only spoke to David Bucknall.

I made no oral representation to the respondent about my ability to do the job.

The first time I ever saw the business plan was in November when they put it on the table in my office."

She accordingly denied that she had, as alleged against her, either prepared the business plan or made any representations to Silwood.

During her cross-examination it does not appear that the former employers were in a position to challenge any of that evidence. It does not appear that they suggested to her that Mr Bucknall was her agent in the sense that he had some kind of authority from her which made her liable in some way for statements which he may have made to the Silwood company, as opposed to representations which she had made on her own behalf. Indeed it was obvious from the dynamics of the position as Miss Cox was showing by her evidence and by her IT1, that Mr Bucknall was seeking to entice her away from her present employers, and that in so far as Mr Bucknall was making any representations, he was doing so in his capacity as a potential employee of Silwood. To suggest therefore in those circumstances that Miss Cox had appointed Mr Bucknall her agent so as to make herself liable in law for what he said, seem to us to be a complete nonsense, and turns the factual position as it was in her evidence on its head. That was the view apparently taken by the Industrial Tribunal.

In what appears to be a careful decision, they set out the facts and at paragraph 10 say that as a result of the disappointing financial performance of the company the depot was closed on 8 December 1995.

At paragraph 12 they set out various parts of the Notice of Appearance, and the allegations which were being made. They were prepared to accept that the Silwood company expected a quicker build up of custom than in fact materialised, and that there had been tension between Mr Bucknall and the directors which was a large cause of the eventual closure of the depot.

At paragraph 14 the tribunal say this:

"Mr Lee [a director of Silwood] told the Tribunal that he was not impressed by the Applicant's competence and he did not consider that she had made sufficient effort to attract new custom. This conduct was not mentioned in the letter confirming her dismissal dated 11 December and the Tribunal finds that although maybe the Applicant's performance in bringing custom into the new depot had not reached the Directors' expectations, there is no doubt that she was in no way guilty of gross misconduct."

Paragraph 16 reads:

"The Tribunal finds that the Applicant was dismissed because of the closure of the depot and not because of gross misconduct, and because of the wording of her contract of employment, she is entitled to damages for that breach."

In his argument presented to us this morning, Mr Chambers says that the tribunal have not properly dealt with the case of agency. He says that there was some evidence in the Notes of Evidence to indicate that so far as Miss Cox was concerned at least Mr Bucknall was a go-between between herself and Silwood in relation to the precise terms of any contract of employment that was to be offered to her. He says that Silwood are entitled to have a finding from an Industrial Tribunal as to the contention that they were making that she became a party to the misrepresentations through the agency of Mr Bucknall; that the tribunal should have dealt with the contention that there had been misrepresentations entitling the company to rescind the contract; and accordingly, realistically he has submitted that the only remedy that he could seek from us today would be to ask for a remission back to the Industrial Tribunal so that they could consider points which they, it was submitted, had overlooked.

Mr Morton on behalf Miss Cox says that on the way the case was presented in the IT1 and IT3 the allegation against Miss Cox was not that Mr Bucknall was her agent, but that she herself had been party to the business plan and had herself made misrepresentations. Accordingly the agency argument was not a feature or any significant feature of the employer's presentation to the Industrial Tribunal which was confirmed by Miss Cox who has attended this appeal, who was never challenged or asked about Mr Bucknall being her agent. Indeed, her recollection is well-supported by the Notes of Evidence in this case.

Mr Morton says that any reasonably competent employer properly advised, as we must assume these employers were, had two options; one was to make a counter-claim for damages for misrepresentation in the Industrial Tribunal which might have raised questions as to whether such a claim fell within the tribunal's jurisdiction; or to have started proceedings in the civil court claiming rescission of the contract, and asked the tribunal to stay their hand pending determination of those proceedings. What they could not do was to seek to argue a case in the appellate tribunal which they had not properly indicated that they were running before the Industrial Tribunal; and that it was unfair to criticise the Industrial Tribunal for not dealing with a case which was not essentially put before them.

We have no doubt that Mr Morton's submissions are to be preferred. It seems to us very clear from the way the case was put by the employers that they were not then alleging that Mr Bucknall was her agent. Indeed, for reasons we have given, we think that such a proposition is fanciful. The tribunal have dealt with the case as it was presented to them. This is a classic example of an appeal where more emphasis is given to one point than was given to it in the Industrial Tribunal, and criticism is then made, on that basis, of the decision. That is not a position which we find attractive. It seems to us that the tribunal were very well aware of the issues which were properly before them, and we see no grounds for any criticism of their decision. In paragraph 16 they have identified the reason why her contract was determined as being the closure of the depot. They do not hold her responsible for anything that occurred in that connection, and they acquit her of any kind of misconduct in language which is strong for an Industrial Tribunal, "there is no doubt that she was in no way guilty of gross misconduct."

We do consider that they have taken into account the case on misrepresentation which was then being raised, but it was quite obvious from the evidence and the challenge to her evidence that there was no hint of a case which could be run against her of misrepresentation. That being so, we do not find it surprising that they do not make any specific reference to it in paragraph 16 of their decision.

Accordingly, we see no grounds for thinking that it would be other than a waste of time and money for this case to be remitted back to the Industrial Tribunal for clarification of their decision. We think it is clear and deals with the cases as advanced by the parties on the occasion of the hearing before them.

Accordingly, we have no hesitation in dismissing this appeal.