United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR R HIGGINS (of Counsel) Instructed by: Mr P N Dixon Solicitor Chequepoint UK Ltd 85 Cromwell Road London SW7 5BW
For the Respondent	MISS A HARRISON (of Counsel) Messrs Jacobsons Solicitors The Outer Temple 222 Strand London WC2R 1DE


 


JUDGE LEVY QC: Mr Hussein Radwan was employed by Chequepoint UK Ltd, ["the Company"], from 11th June 1984 to 27th June 1997. He claimed in an application to an Employment Tribunal, received on 23rd September 1997, that he was dismissed by the Company from his employment on that date. The Company put in its answer, which was received by the tribunal on 17th October 1997, giving as the reason for his dismissal:

"(i) Redundancy (ii) Gross Negligence/Misconduct."

In Box 6 in answer to the question "the details given by the applicant wages/salary, take home or other bonuses correct?". The Company entered 'No' and added that the basic wages/salary was £40,000 and for other bonuses/benefits the words "not admitted" were inserted; a supplementary document giving particulars on which the grounds resisting the application were submitted. On the question of bonuses, after saying that he was dismissed summarily, the form stated:

"Further or alternatively, it is not admitted that the claimed or any bonuses were due to the Applicant who is put to strict proof on this point."

Mr Radwan's application came before the Employment Tribunal sitting at London (North) for hearing on 9th and 10th March 1998. The tribunal heard evidence from Mr Radwan, but not, as far as we can ascertain, received no evidence from the Company.

Following the hearing, the tribunal gave its decision which was communicated to the parties on 27th October 1998. Mr Radwan succeeded, inter alia, obtaining an award of £11,500 as his entitlement to bonuses..

The Company appealed from the decision by a Notice dated 22nd April 1998. The preliminary hearing took place on 18th September 1998, when a panel of this Employment Appeal Tribunal, on which one of the lay members sitting with me today also sat, permitted the appeal to go forward for a full hearing on one point only, namely, whether the award of £11,500 as claimed for as 'bonus' payments was justified in the circumstances.

The point arises in these circumstances. By his contract of employment ["the Contract of Employment"], Clause 14 reads:

"The employee's basic salary will be £........per year. In addition the Company, may at its absolute discretion, pay to all or any of its employees a bonus which it shall fix at its unfettered discretion. The terms and conditions of any such bonus scheme to be notified to employees from time to time."

On 2nd April 1992 ["the 1992 letter"] the Company wrote Mr Radwan a letter which increased his annual salary and included this passage:

"There will be a new bonus structure payable quarterly based on nett operating profits achieved as compared with your Regional Budget as agreed in writing beforehand with Mr Zachariya and payable as follows:

April £1,750

July £1,750

October £1,750

December £1,750

Christmas £ 500

Audited Annual Results £2,500

Annual Results

Total per annum Bonus achievable £10,000."

The 1992 letter went on to say that his salary increase mentioned in the letter would be effective from 1st January 1992.

From that time on, as we understand it, the quarterly payments of £1,750 where made until Mr Radwan ended his employment, but, save for one Christmas payment of £500, the Christmas and Annual Audited Results payments were not made. In those circumstances before the Employment Tribunal, Mr Radwan claimed the balance of £11,500 based on the balance due of the Christmas bonus and the Audited Annual Results.

The tribunal dealt with that claim in what Miss Harrison described abbreviated form in its extended reasons. The tribunal said this at paragraph 28:

"Mr Radwan claimed that he had not been paid Christmas bonus in respect of three years from 1994 to 1996 and he is claiming, thereby, the sum of £1,500. He also claimed that he was not paid an annual bonus for the four years inclusive from 1993 to 1996 at £2,500 per year amounting to £10,000. He is in total claiming the sum of £11,500 and we find, as a fact, that he is entitled to this sum pursuant to paragraph 25 of his contract of employment."

On behalf of the Company, Mr Higgins has submitted that such a finding was not open to the tribunal because on the true construction of the Contract of Employment and the 1992 letter, the tribunal could not have reached such a conclusion. He pointed to the discretionary elements in the second sentence of Clause 14 and submitted that by reference to Clause 14 that it was really a matter of the Company alone to decide whether to pay any bonus or not. His submission invited us to consider the Contract of Employment and the 1992 letter in isolation.

It is common ground between the parties that a contract has to be construed in accordance with its terms against the background to which it was made. The Employment Tribunal heard evidence from Mr Radwan as to the circumstances in which it was made and reached the conclusion from hearing that evidence. There has been no request for the notes of the evidence before the Tribunal to support a submission that findings of fact went againt the weight of the evidence. Although as Miss Harrison accepts, the extended reasons are in abbreviated form, in our judgment, the Employment Tribunal was well entitled to consider the two documents together, and having heard evidence of the surrounding circumstances to conclude that the unpaid monies claimed were payable as a matter of contract and not as a matter of bonus. It is a little unhappy that the decision does not set this out more extensively, but in our judgment, the decision arises from mixed findings of fact and law; the decision was one which the tribunal was entitled to reach. In those circumstances, we are not entitled to interfere with it.

While we thank Mr Higgins for his careful and concise submissions, they are ones which cannot succeed on appeal in this tribunal in the light of the facts found below. We therefore dismiss this appeal.

Mr Higgins: Sir, giving the conclusion you have just drawn as one which is going to be effective on the question of whether discretionary bonuses are payable as of right or not in general, may I have leave to appeal to the Court of Appeal?

JUDGE LEVY QC: We do not say this is a matter of discretionary bonuses being applicable as a right. We say that looking at the documents before them and on the evidence which we understand the Employment Tribunal to have heard, the Tribunal could properly conclude that the sums claimed by Mr Radwan became payable. It is not a holding of general wide application. This case was decided by properly applying the law to the facts which were before the tribunal. You will have to seek leave elsewhere.