United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR GUY PRITCHARD (of Counsel) Instructed by: Diane Cunningham Solicitor Retail Motor Industry Federation Legal Dept 201 Great Portland Street London W1N 6AB


 


SIR CHRISTOPHER BELLAMY QC

1. This is an appeal from the Decision of the Employment Tribunal sitting at Nottingham, the reasons for which were sent to the parties on 14 July 2000. It comes before us today by way of an ex-parte preliminary hearing in order to determine whether there is an arguable point of law on this appeal.
2. The Decision of the Tribunal concerned only one point: what was the effective date of termination of the Applicant's contract with a view to determining the time limit within which she was obliged to present her claim for unfair dismissal?
3. The Tribunal decided that the effective date of termination was 3 February 2000 and that therefore the application was presented in time. The argument for the Respondents, which has been renewed today before us on appeal, is that the contract in fact determined on 8 November 1999 when the company wrote a letter of that date to the Applicant. In that letter, according to paragraph 5 of the Tribunal's decision, the Respondent said, so far as relevant:

"It is with regret that we must terminate your employment with immediate effect on the grounds of redundancy.

You are entitled to 12 weeks notice, for which payment will be made at the relevant net rate in lieu of your working."

The Applicant was given a P45 which gives the leaving date of 8 November 1999 but, according to paragraph 10 of the Tribunal's judgment, she was allowed to keep the company car that she had used in the course of her employment and the company continued to reimburse her private mileage petrol costs. This case, we should add in parentheses, arises in the context of the motor industry and we understand that, in that industry, it is common for employers to provide employees with cars and to meet petrol expenses. It has been submitted to us that the meeting of these expenses after 8 November 1999 is attributable to the terms of the relevant contract which would have required the employer to meet the petrol costs during the period of notice. However, we make no finding on that point, and it is not a matter that we can go into today.

4. At all events, the Tribunal referred itself to Section 97(1) of the Employment Rights Act 1996 which says that "the effective date of termination":-

"(a) in relation to an employee whose contract of employment is terminated by notice, whether given by his employer or by the employee, means the date on which the notice expires"

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

5. At paragraph 17 of its Decision, the Tribunal contrasted two kinds of termination in these words:

"(1) Termination with immediate effect and payment of a sum of money in lieu of notice in which the contract comes to an end typically on the last day of working or

(2) "Garden leave" where the employment is terminated but that date is set ahead and in the meantime the employee is not required to work but nevertheless technically remains an employee until that future date."

In paragraph 18 the Tribunal said this:

"Although the letter dated 8 November 1999 as quoted above, has an element of confusion about it, we bear in mind that the burden is upon the employer to establish its meaning. In the context of all the documentation to which we have referred in which the references are to "pay in lieu of notice", we are struck by the fact that the phrase is not used in this letter. The phrase is "in lieu of your working" which can carry with it the alternative interpretation of garden leave. On balance, although it may well have been an error on the part of the dictator of that letter, taken in the contractual context (which the respondent must be taken to be implementing unless shown otherwise) and all the other documentation and facts to which we have referred we find that that latter interpretation is the meaning of that letter. Accordingly the effective date of termination was 12 weeks from 8 November 1999 in accordance with the contractual provision which we understand to be 3 February 2000."

6. On this appeal, Mr Pritchard for the Appellants has contended first of all that the Tribunal simply misconstrued the documents that they had before them, in particular, the letter of 8 November 1999 and secondly, that the Tribunal made, in effect, an error of law in its reference to the concept of "garden leave". He has referred us notably to the categories of circumstances in which payments are made in lieu of notice which are discussed by Lord Browne-Wilkinson in Delaney -v- Staples [1992] IRLR 191, and to the subsequent discussion in a Decision of this Tribunal, Cerberus Software Ltd -v-Rowley [1999] IRLR 690. In that case, notably at paragraph 13, there is a further discussion of the concept of "garden leave" which this Tribunal considered to be not entirely in accordance with the definition of garden leave given by Lord Browne-Wilkinson in Delaney -v- Staples.
7. In all these circumstances we think that there is an arguable point of law in this case, the question of law being whether the Tribunal erred in law in deciding that the effective date of termination of the contract in question was 3 February 2000 and not 8 November 1999. So we think on that point that this case should go forward to a full hearing. It remains for us to give directions- a Category C case, two hours and Skeleton Arguments to be exchanged in the normal way.