United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	In Person
For the Respondent	Ms A Russell (of Counsel) Messrs Stonehams Solicitors 17 Scarbrook Road Croydon CR0 1SQ


 


JUDGE PETER CLARK: We have before us an appeal by the Applicant employee, Mr Lambert, and a cross-appeal by the Respondent employer, Croydon College, against a decision of the London (South) Employment Tribunal promulgated with extended reasons on 23 September 1996, following a hearing held on 16 September.

Background

The Applicant commenced employment with the Respondent on 1 September 1990 as a Senior Lecturer in Marketing and Retail. In his Originating Application presented to the Tribunal on 6 June 1996, he catalogued a series of alleged incidents of harassment by members of the college staff which he claimed culminated in his going off work sick on 11 September 1995, never to return. There has been no adjudication on the merits of those allegations. We record them simply by way of background.

While the Applicant was off sick negotiations took place between his trade union, NATFHE, and the Respondent, for his leaving the employment. Steps were also taken to enquire as to this position in relation to pension benefits upon ill health termination of employment. Correspondence directed to the Applicant was handled by his wife, Mrs Vanessa Lambert. Further, the union instructed solicitors, Messrs Russell, Jones & Walker, to act on his behalf and to advise him.

We have seen an early draft of a proposed, incomplete, compromise agreement, a copy of which was sent to Mrs Lambert under cover of a letter dated 8 January 1996 from Jenny Golden, the union regional official. Annexed to that draft agreement was a blank solicitors certificate designed to comply with what was section 140 of the Employment Protection Consolidation Act 1978, now section 203 of the Employment Rights Act 1996, the Act.

On 10 January 1996 the Teachers Pension Agency wrote to the Applicant direct stating that he was eligible for a lump sum on the grounds of illness.

The negotiations progressed and on 18 January Ms Golden wrote to Mr Whitehead of Russell Jones & Walker indicating that the Applicant's pension could be activated from 1 January 1996, so that the Respondent proposed that his contract of employment be terminated as of 31 December 1995. The Applicant was to be removed from the payroll from that date, but to avoid hardship the Respondent proposed making an ex gratia payment of £2,000 to be set off against the proposed termination payment of £39,000.

On the same day Ms Golden wrote to Ms Milburn, the Respondent's personnel manager stating that the outstanding matter was likely to be the agreed date of termination. She continued:

"I have sought advice from Russell Jones and Walker as to whether it is possible to retrospectively terminate the contract or whether the termination date be the date on which the compromise agreement is made. If termination cannot be retrospective then the College will have to make the necessary adjustment of salary."

On 19 January Ms Milburn wrote to Mrs Lambert enclosing a cheque for £2,000 by way of an advance on the offer of £39,000 to settle the matter. She concluded:

"No action has been taken by the College to implement your husband's pension benefits pending the finalisation of the compromise agreement and confirmation of his last day of service.

I hope that this is acceptable to you."

On 22 January Mrs Lambert replied to Ms Milburn, saying:

"Barrie [the Applicant] and I have very carefully considered the contents of your letter. We do not in any way accept the substance of your argument.

In order to avoid the serious financial embarrassment which will otherwise arise from the fact that you have stopped Barrie's income in clear breach of his contract of employment, Barrie is forced to take your cheque for £2,000 under duress and reserves all rights in this matter."

After further consideration, and with reluctance, the Applicant decided to accept the terms offered by the Respondent and both he and the Respondent's representative signed the final agreement, which was drafted by Russell, Jones & Walker, on 7 March 1996. The Agreement read, so far as is material, as follows:

"Comprise Agreement made between Croydon College and Barry Lambert.

1. The employee's employment with the college has been terminated with effect from 31st December 1995.

2. The College has agreed to pay Mr Lambert and Mr Lambert has agreed to accept the sum of £39,000 (THIRTY-NINE THOUSAND POUNDS) in full and final settlement of all claims which he may have against the College arising out of or connected with the termination of his employment including any claim for wrongful and/or unfair dismissal and/or loss of office. The College shall pay the said sum of £39,000 to Mr Lambert within 7 days of the date of this agreement. The College will also provide a reference for Mr Lambert in terms to be agreed with Mr Lambert.

..................................

7. Mr Lambert confirms that before entering into this agreement he has been given the opportunity of taking and has taken independent advice on the terms hereof and has entered into this Agreement with the benefit of that advice and of his own free will and not under duress and with a view to the same constituting a compromise agreement for the purpose of section 140(3) of the EPCA 1978 as amended."

On 6 June 1996 he presented his Originating Application to the Tribunal which raised amongst other things, complaints of unfair dismissal and breach of contract by the Respondent which was alleged to have arisen on 19 January 1996 when the Respondent advised Mrs Lambert that the Applicant was no longer on the payroll.

The Tribunal Decision

At the preliminary hearing held on 16 September 1996 the following material issues were considered and determined by the Tribunal.

(1) Was the Applicant prevented from pursuing his complaint of unfair dismissal on the grounds that he was barred from doing so as a result of the parties entering into an agreement which complied with section 203 of the Act?

(2) If not, was the complaint of unfair dismissal presented within time?

(3) If not, had the Applicant established that it was not reasonably practicable to present the claim within time? If so, was the complaint presented within a reasonable time after the expiry of the ordinary limitation period?

(4) Did the claim for breach of contract arise, or was it outstanding on the termination of the Applicant's employment?

In short, they decided that the compromise agreement, so called, did not comply with section 203(3)(e) of the Act, in that the agreement did not identify the Applicant's legal adviser; the effective date of termination of the employment was 31 December 1995, applying the EAT decision in Crank -v- Her Majesty's Stationery Office [1985] ICR 1, and that accordingly the complaint was presented outside the ordinary 3 month time limit; that it was reasonably practicable to present the claim within time and thus the unfair dismissal claim was time-barred, and that since the claim for breach of contract arose, on the Applicant's case, after the effective date of termination as found by the Tribunal, that claim was not justiciable before the Employment Tribunal in accordance with article 3(c) of the Employment Tribunals Extension of Jurisdiction (England & Wales) Order 1994.

The Appeals

The following issues arise on the pleadings. In the appeal, it is said that the Tribunal fell into error in three ways:

(1) in determining that the effective date of termination was the date appearing in clause 1 of the agreement, that is 31 December 1995, the Tribunal misapplied section 97 of the Act. Mr Lambert contends that the effective date of termination was 7 March 1996, that is the date of the agreement.

(2) In relying on the date contained in the agreement, the Tribunal denied the Applicant the protection of section 203 of the Act, which preserves his right to claim unfair dismissal and he submits breach of contract. As to that latter point, its clear that section 203 does not apply to breach of contract claims.

(3) In misdirecting itself as to the reasonable practicability test in section 111(2)(b) of the Act.

In the cross-appeal:

(4) The Tribunal misapplied the provisions of section 203 of the Act in finding that the agreement between the parties did not constitute a compromise agreement as there defined.

(5) That if the Tribunal was wrong to find that the effective date of termination was 31 December 1995, it ought to have found that the effective date of termination was no later than January 1996 when the alleged breach of contract by the Respondent occurred on the Applicant's case, and thus the claims for both unfair dismissal and breach of contract were out of time.

It is convenient to deal with those issues in a slightly different order, using the same numbering.

Fourth issue

Ms Russell has abandoned this ground of her cross-appeal. Consequently the Tribunal's finding that the agreement did not comply with section 203(3)(e) of the Act stands.

First issue

Section 97(1)(b) of the Act provides:

"97. Effective date of termination

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

In Crank the employee wrote to his employers on 14 September 1983, offering his resignation from 2 September, which offer was accepted. He presented a complaint of unfair constructive dismissal on 5 December. At a preliminary hearing an Employment Tribunal held that the effective date of termination was the agreed date of 2 September; that the complaint was therefore presented outside the ordinary 3 month limitation period and it was reasonably practicable to present the complaint within time. The claim was accordingly time-barred. The EAT upheld that decision. In the course of the judgment of the Appeal Tribunal delivered by Mr Justice Peter Gibson, he distinguished the case of an effective date of termination unilaterally imposed by an employer (see Brown -v- Southall & Knight [1980] ICR 617) and said this at page 5C-D:-

"In the present case it is a striking feature that it was the employee who himself suggested and asked agreement for 2 September 1983 as being the date from which his resignation was to take effect, and the employers agreed to that. We think it is clear that both sides intended that the contract should be terminated as of 2 September. Why, in those circumstances, should one not treat the effective date of termination, for the purposes of the statute, as being 2 September.

Of course it is right that on 13 September to select one date by way of example, the contract of employment was still subsisting, but the position that we have to consider is that which has arisen in the light of the agreement between the parties. We think that the common sense answer to the question, when was the effective date of termination, is that which the Industrial Tribunal reached. Both parties were therefore bound, and we can see no sufficient justification to give the wording of the statute a special meaning, so as to treat the termination as not having taken effect until a date later than that which the employee and the employers had agreed was the date of termination."

Mr Lambert challenges the approach in Crank, relying upon a passage in Harvey on Industrial Relations and Employment Law, Vol 1, D703, where the editors say, in relation to Crank:

"This may, however, be a cranky decision since it is difficult to see how the parties can for statutory (as opposed to contractual) purposes effectively rewrite the provisions of the Act."

For ourselves, we regard the decision neither "cranky", nor an attempt to rewrite the statutory provisions. Unlike, for example, the definitions of continuity of employment, which is purely statutory and is not effected by agreement between the parties, section 97(1)(b) of the Act requires the Tribunal to determine, as a matter of fact, what is the effective date of termination. We can see no reason why it should not be a date agreed between the parties.

Similarly, in Mowlem Northern Ltd -v- Watson [1990] ICR 751, this Appeal Tribunal upheld an Employment Tribunal finding that the effective date of termination, initially determined by a notice of dismissal, could be extended by agreement between the parties.

Next, Mr Lambert submits that Crank is distinguishable from the present case, because in Crank it was the employee who suggested the date of termination which was later agreed, whereas in the present case the suggestion came from the Respondent. We do not regard that as being a material distinction. The critical point is that agreement was reached.

In these circumstances we reject the Applicant's argument on the first issue that at law the effective date of termination was the date of the agreement, namely 7 March 1996.

Second Issue

Mr Lambert submits that the effect of agreeing 31 December 1995 as the effective date of termination of employment was to bring that agreement within section 203(1) of the Act so that it was void. He relied upon the Court of Appeal decision in Igbo -v- Johnson Matthey Chemicals Ltd [1986] ICR 505. However that was a case in which the relevant agreement purported to exclude the employee from arguing that she had been dismissed. If upheld, that agreement would have the effect of precluding her from bringing a complaint of unfair dismissal. Accordingly it offended what is now section 203 of the Act. Here, there was nothing to prevent the Applicant from bringing his compliant of unfair dismissal.

We therefore reject that submission.

Third issue

In order to attack the Tribunal's finding as to reasonable practicability it must be shown that the Tribunal's conclusion, which is essentially a matter of fact for the Tribunal was perverse. Mr Lambert himself accepts that he has difficulty in passing that threshold, although he submits that the finding 'flies in the face of properly informed logic', to borrow one of the expressions referred to by Mr Justice Mummery in Stewart -v- Cleveland Guest Engineering Ltd [1996] ICR 535, 542 G, bearing in mind his ill-health at the relevant time, leading to an inability to put in his complaint before the 6 June 1996.

We reject that submission. There was evidence before the Tribunal that he was able to communicate with his solicitors and accountant, and it is clear that the Tribunal took into account his state of health. We cannot say that their conclusion on reasonable practicability was perverse.

It follows that we shall dismiss this appeal. In these circumstances it is unnecessary for us to consider the fifth issue, which is an alternative argument as to the effective date of termination raised in the cross-appeal.