United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR B ELKINGTON (of Counsel) Messrs Langley & Co Solicitors Sun Court 66 Cornhill London EC3V 3NB
For the Respondents	MR P MULLEN (of Counsel) Messrs Teresa Evans Solicitors 7A Ashley Road Epsom Surrey KT18 5AQ


 


JUDGE HAROLD WILSON: This appeal has been argued by Mr Elkington on behalf of the appellant and by Mr Mullen on behalf of the respondent. We have been very much helped by the succinct arguments which they have presented to us and the authorities to which we have been referred.

There were two live questions as a result of the preliminary hearing, which permitted the matter to go forward for full argument. Those two matters were whether the contract was illegal or tainted with illegality and whether it was a fixed-term contract for three years terminable on notice or not.

So far as illegality is concerned, it is common ground that this was not an issue canvassed at any stage during the hearing before the Employment Tribunal, but is was something which came into the concluding paragraph of the extended reasons. Following the preliminary hearing, affidavit evidence about what went on before the tribunal was submitted on behalf of each side and the Chairman was invited to make comments about the matter. There was no real issue in the affidavit evidence, nor any difference between the affidavit evidence and what the Chairman recollected. The Chairman concluded by saying that he should, at the very least, had qualified his remark about possible illegality, or better still, not have included it in his final paragraph.

For the purposes of the appeal and bearing in mind the higher standard proof that is required where charges of illegality or fraud are made, we indicated at the outset that we were not going to open that possibility. In other words, we discount the question of illegality.

So far then as the one remaining issue is concerned, the facts found by the Chairman may be summarised as follows. The appellant was in secure employment in the motor trade in which he had spent the best part of his working lifetime and, implicitly, he had achieved a measurable amount of success in it. The respondents' director, Mr Matkin, had bought a garage for his son, which was not very profitable and, indeed, was saved by injections of capital by Mr Matkin. He and the appellant were friends of very long standing and he had the idea of persuading Mr Brown to join his venture to turn the business of the garage round. Mr Brown, the appellant, at the material time, was 62 years of age and was looking forward, presumably, to retirement at the normal retiring age of 65, which would have been in three years or so. It is common ground that there were discussions on several occasions with different incentives being offered to Mr Brown. Eventually, he having initially not being at all willing to contemplate changing from his secure employment to anything else, was persuaded by a basket of incentives to go to the garage in order to turn it round through starting and developing a second hand car sales business. The parties, acting for themselves, got a standard form of contract and made a number of deletions and a number of insertions. The deletions were all initialled by each of them and, finally, their signatures to the contract were signed. In the words of the decision:

"5. The matter came before this Tribunal under its breach of contract jurisdiction, the Applicant claiming that the contract was a fixed-term contract for three years with no right to terminate, the Respondents on the other hand arguing that it was a fixed-term contract subject to the right to be determined on notice by either party in the meantime and that that is what had happened and that reasonable notice to terminate was one month, which had been given."

As we understand it, we are invited to approach the matter on those findings of fact and to substitute our own construction in law on the basis that we are in as good a position as the tribunal would be if it were returned to the tribunal. We accept that position.

We have regard to the law and to the decided cases to which we were referred. The first of these, in point of time, was the case of Punjab National Bank v de Boinville [1992] WLR 1138, and in particular at page 1148, where we were referred to that part of the judgment of Staughton LJ. More particularly we were referred to the judgments of Lord Hoffman in the cases of Mannai Ltd v Eagle Star Assurance Co Ltd [1997] 2WLR 945, and in particular at page 972 G-H, and his judgment in ICS Ltd v West Bromwich Building Society [1998] WLR 896, at 912H-913E.

We distil from those authorities and in particular from those parts of the judgments, that we may have regard to the background in coming to a conclusion concerning the written contract as it was placed before us. The background is as contained in the facts found. The contract in its original form shows quite clearly that the additions were typed and the deletions were made by hand and not machine. We have concluded, on a balance of probabilities, that the typescript in the asterisked subsection 2 of paragraph 2 of the contract was inadvertently left in undeleted and that the true construction, in the context of the facts found, was that this was a contract for a fixed period of three years. We are led to that conclusion by two other matters to be found in the contract itself. The first is what is deleted over the page in paragraph 6(3) where the provision for notice is deleted (that is to say "if the employment is ended by notice the employee is entitled to accrued holiday pay on the basis of" is deleted) and by what is left in so far as paragraph 7 is concerned, in particular what is left in is paragraph 7(1)(a), although 7(1)(b) is deleted. 7(1)(a) entitles the employee to full remuneration for six months if absent from work due to sickness or injury. At one stage it was suggested that this was a speculative matter. So far as Mr Brown is concerned we are quite satisfied that the speculative nature of the enterprise was something he wanted to reduce to an absolute minimum if he could not absolutely extinguish it. Certainly so far as the respondent is concerned, that sort of provision in paragraph 7 suggests the reverse of speculativeness. Accordingly, we find in favour of the interpretation and construction of this document put forward by the appellant.

We direct that the matter be placed before the Employment Tribunal in due course for a remedies hearing, unless in the meantime a satisfactory settlement is reached between the parties.