United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	PAUL NICHOLLS (of Counsel) Messrs Denton Hall Solicitors Five Chancery Lane Clifford Inn London EC4A 1BU
For the Respondent	JOHN WIGGINS (Solicitor) Hoxton Trust Legal Advice Service 156 Hoxton Street London N1 6SH


 


JUDGE PETER CLARK: The preliminary issue in this case, heard by a Chairman sitting alone at the London (North) Industrial Tribunal (Mr A Bano) on 27th February and 7th May 1996, was whether or not Ms Wilder ordinarily worked in Great Britain so as to found the tribunal's jurisdiction to entertain her complaint of unfair dismissal against her former employer, the respondent Hammer Film Productions Ltd. He decided that she did. Extended reasons for that decision are dated 8th July 1996. Against that decision the respondent now appeals.

The facts

We taken the outline facts from findings made by the Chairman, noting that where a conflict existed between the evidence given by the applicant and the witnesses called on behalf of the respondent, he preferred that of the applicant.

The respondent is the owner of the Hammer film titles. Its business is the commercial exploitation of those titles. The company is wholly owned by its Chairman, Mr Roy Skeggs, whose son, Mr Graham Skeggs, acts as the company's legal adviser.

On 2nd April 1991 the applicant joined the company as personal assistant to the Chairman. She was the company's only employee. Her duties were mainly secretarial, but gradually she took on further responsibilities, including the sale of film clips to television. In November 1992, to reflect these increased responsibilities, she was appointed Director of Development.

At this time the respondent was represented in United States by Mr Terry, a freelance agent, who held the title "President of Hammer International". In that same month the respondent entered into a two year extendible option agreement with Warner Brothers with a view to a joint enterprise making feature films from the respondent's titles. Under that agreement Warner's provided a suite of offices at their studios and help for the costs of Mr Terry and a secretary.

The respondent became disenchanted with Mr Terry's performance and on 14th June 1993 the applicant was sent to the United States to investigate the problem. As a result of her report Mr Terry's engagement was terminated on 10th August 1993. The applicant asked Mr Skeggs when she could return and he told her to 'hold on'.

On 12th August 1993 Roy Skeggs faxed the respondent's contacts in the United States in these terms:

"Richelle Wilder, Vice President of Hammer Film Productions Limited, from our London office is now in residence on the lot and will be representing us in all matters pertaining to Hammer Film Productions Limited."

There was a dispute of fact as to whether Roy Skeggs asked the applicant to stay permanently in the United States; she denied that she ever agreed to remain permanently and, as we have observed, her evidence was accepted by the Chairman.

On 6th September 1993 a new personal assistant was appointed to Roy Skeggs. The applicant's evidence was that she was unaware of that appointment until she came back to this country in November 1993 to arrange a United States visa and work permit.

In June 1994, the Chairman found, the applicant asked Roy Skeggs exactly how long she would be required to work in the United States; she was concerned about her relationship with her boyfriend, who remained in the United Kingdom, and made it clear that she did not want to work in the United States permanently. Later that month Roy Skeggs told her that she would be promoted to Senior Vice President and given a salary increase.

Again a factual issue arose between the parties. Mr Skeggs denied that the applicant had asked how long she would be working in the United States.

In September 1994 she asked for a written contract of employment and in October Graham Skeggs sent her a document which he had drafted ["the first draft contract"]. The material terms included the following. The contract was expressed to be made between Hammer Film Productions Limited of Elstree Studios, Borehamwood and Richelle Wilder of 67 Clapton Common, London E5, her London address. Clause 1 provided:

"NATURE OF EMPLOYMENT

The Company employs the professional services of the Employee as 'production executive' (and which position may be termed 'senior vice-president' when working in the United States) and the Employee shall, to the best of her professional ability, provide the following services to the Company for a minimum of forty hours per week:-"

They are then set out including:

"1.6 OTHER SERVICES

any other service or services which the Company shall reasonably require from time to time."

Under Clause 2 she was to be paid £30,000 sterling from which United Kingdom Income Tax and National Insurance deductions were to be made under the PAYE scheme. Clause 6 provided for maternity leave in accordance with statutory requirements. Clause 7 permitted the employee to take time off without loss of pay for the performance of compulsory public duties as defined by the Employment Protection (Consolidation) Act 1978; and Clause 14 provided for redundancy payments in accordance with the 1978 Act.

The applicant was not content with the first draft contract as it appeared, and suggested a number of amendments. At paragraph 11 of the reasons the Chairman summarises the position in this way:

"11 The Applicant proposed a number of amendments to the draft contract. She asked for the words "production executive" to "may be termed" to be deleted from clause 1 and the addition of a clause 1.6, as follows:

"US Operation. head of US Corporate and creative affairs. Overseeing business, legal and production matters."

A new draft contract incorporating the first, but not the second, of those amendments, was sent to the Applicant in February 1995. The second draft contract contained as clause 1.6 a term imposing on the Applicant an obligation to perform "any other service or services which the Company shall reasonably require from time to time". The Applicant declined to sign the contract in that form because she considered that it did not adequately reflect her responsibilities."

In the event no draft contract was ever signed by the applicant.

In November 1994 the respondents two year contract with Warner's expired. It was not renewed. After vacating the Warner's studios in January 1995, the applicant took new offices in Burbank on a six month lease due to expire on 31st July 1995. On 31st May 1995 she was dismissed. She presented her complaint of unfair dismissal, together with a claim for pay in lieu of notice and holiday pay on 25th August 1995.

The Law

The relevant statutory provisions are now to be found in section 196 of the Employment Rights Act 1996 (formerly section 153 of the 1978 Act). Section 196(2) provides:

" (2) The provisions to which this subsection applies do not apply to employment where under the employee's contract of employment he ordinarily works outside Great Britain."

Subsection (3) of section 196 includes the complaint of unfair dismissal and the former Wages Act complaint made in this case.

Precisely what the provision means has been a matter of some debate in the past, but before us it is common ground that the relevant principles for our purposes may be drawn from the Court of Appeals decision in Janata Bank v Ahmed [1981] ICR 791.

The Appeal

Mr Nicholls' principal submission on behalf of the respondent is based on the observation of Donaldson LJ in Janata where he said at page 806 C-D:

" The consecutive positing situation had, of course, to be distinguished from the case where an employee is appointed to a new position, involving a significant variation in his contract of employment, as a result of which he is required to work in one particular country unless and until that contract is further varied. In such a case that will be the place and the only place at which he ordinarily works under his contract of employment."

He submits that the primary facts are a matter for the Industrial Tribunal, and he does not seek to challenge those findings. However, the question of what was the relevant term of the contract, express or implied, at the material time, that is on termination of the contract, is a question of law. With that proposition we agree. Here, it is common ground that at the outset the applicant ordinarily worked in Great Britain under her contract of employment. The question is whether that term was subsequently varied, not expressly, but by implication. Either it was varied, or it was not.

He argues that either upon her appointment as Vice President in August 1994, or her appointment as Senior Vice President for the United States of America in June 1994, there was by necessary implication, a variation in the applicant's contract of employment because the new post required her to work in America, whereby she ordinarily worked in that country and not in Great Britain. It is common ground that she could not as a matter of law ordinarily work in both countries at once.

That was not the conclusion arrived at by the Chairman, nor is it one which we have reached. No one factor is conclusive in determining whether or not a variation took place. Although she actually worked in the Untied States from June 1993 until her dismissal in May 1995 that does not of itself answer the question. It is a factor to be taken into account. Against that, on the Chairman's findings of primary fact, the applicant never agreed to take up a permanent position in the United States; the terms of the draft contracts are more consistent with no such implied variation having taken place prior to dismissal; other terms of the contract itself, such as the payment of salary in sterling and the deduction of National Insurance contributions, militate against a finding of variation on the facts of this case in our judgment.

We bear in mind the observation of Donaldson LJ in Janata at page 805F:

" The issue of whether someone ordinarily works outside Great Britain under his contract of employment really should not be allowed to generate a large body of learning. The use of the words "ordinarily" and, by implied contrast, "extra-ordinarily" points the way inexorably, and rightly in a labour law context, to a broad brush approach under which, on a given set of marginal facts, one tribunal may decide one way and one another. This may offend the purists, but to my mind it is much more offensive that these small but vital claims for compensation should bog down in a series of legalistic appeals."

In our view this is not a case in which it can be said that the tribunal Chairman reached an erroneous conclusion is law, let alone one that was perverse, as Mr Nicholls argued in the alternative.

For these reasons we shall dismiss this appeal.