United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR J HALSON (Solicitor) Employment Law Specialist 10 Pitville Close Liverpool L18 7JP


 


MR JUSTICE CHARLES: The parties to this appeal are a Mr Akanbi-Smith (the Appellant) and Merseyside Caribbean Council (the Respondent employer). The appeal comes before us today by way of Preliminary Hearing.

1. The appeal is against a decision of an Employment Tribunal sitting at Manchester, the Extended Reasons for which were sent to the parties on 25 August 1999. The unanimous decision of the Tribunal was that the Respondent employers had not made unauthorised deductions from the Appellant's wages contrary to Section 13 of the Employment Rights Act 1996.
2. The Appellant had continued to receive pay up to 21 August 1998 and the conclusion underlying the decision of the Employment Tribunal appears in the last paragraph of the Extended Reasons and is that for the reasons that they give the Appellant was not employed by the Respondent employer after 21 August 1998.
3. We have had the benefit of a skeleton argument and oral argument from a Solicitor appearing for the Appellant. We have considered the issue whether this appeal raises a point of law that is reasonably arguable on the basis of the amended Notice of Appeal which that Solicitor put before us.
4. In our judgment this appeal does not raise a point of law that is reasonably arguable and therefore we dismiss it.
5. The nature of the Appellant's case and the background facts are set out in paragraphs 2 to 8 of the Extended Reasons. They are in the following terms.

"2. In this case the applicant claims that the employment relationship between himself and the respondents is continuing and that by their failure to pay him wages the respondents have made unauthorised deductions from his pay. The respondents, however, contend that the applicant was dismissed from their employ on 14 May 1998 and consequently, the employment relationship is not subsisting.

3. The applicant was represented by Mr Mark, of Counsel, he gave evidence on his own behalf and called Mr Keith Dovaston, a full-time official of Unison, as a witness. The respondents were represented by Mr Golinski, of Counsel, and evidence on their behalf was given by Mr Hulbert Priddie who at the time of the events in question was Assistant Secretary of Merseyside Caribbean Council (MCC).

4. The Tribunal finds the material facts to be as follows. The applicant was employed by Merseyside Caribbean Council on 1 July 1997 as the Centre Manager. However, because the respondent organisation is small and not set up to deal with PAYE matters, its staff, including the applicant, were paid via Liverpool City Council (LCC). In early 1998 the applicant became concerned about certain contractual issues relating to his employment and these led to his being suspended (with pay) on 11 March 1998. On 31 March 1998 he was reinstated, but once again matters did not go smoothly and on 8 May 1998 the applicant attended a disciplinary hearing conducted by the respondent's disciplinary committee.

5. The disciplinary committee reported the matter to the Merseyside Caribbean Council and the decision was taken to dismiss the applicant forthwith for gross misconduct. Two letters of dismissal both dated 14 May were subsequently sent to the applicant although no reason for this was given to the Tribunal. One letter was signed by Mr Priddie and indicated that 'we will pay you [in] lieu of notice of one month in the sum of …..' (p31 applicant's bundle). The other was signed by Mr Chandler (who was the Chairperson of the MCC) and indicated '… we have no alternative but to dismiss you as of 14 May 1998, for gross misconduct from your position as Centre Manager. We will pay you one month's pay in lieu of notice to terminate your employment on 14 June 1998' (p31A of the bundle). On 15 May, the applicant wrote to Mr Chandler appealing against the decision to dismiss him (p32).

6. By 12 June 1998, the appeal process had not progressed to a conclusion, and Mr Dovaston, who was acting as the applicant's representative, therefore wrote to LCC asking that it should intervene to 'obtain an extension of Mr Akanbi-Smith's notice period' (p41). In consequence, at around 2 p.m. that day Mr Priddie received a telephone call from Mr Nigel Mellor, the LCC Community Development and Equality Officer wishing to speak with him. Mr Priddie was busy at the time and it was therefore agreed that Mr Mellor would come to the Centre at 4 p.m. Mr Priddie testified that Mr Mellor raised the issue of Mr Akanbi-Smith's dismissal and suggested ACAS became involved in reaching a settlement. Mr Mellor indicated that whilst discussions were continuing, he would continue to pay the applicant until 3 July. He also testified that the subject of 'suspension' was not raised.

7. On 15 June 1998, a document was faxed through to Unison's Office and was seen by both Mr Dovaston and the applicant. It was unsigned and un-dated and stated (inter alia), 'Pending the outcome of the investigation and action to be taken on its recommendations Steve Akanbi-Smith to remain suspended from his employment as Manager at the Centre. This suspension be continued until Friday 3 July at the latest' (p40). Mr Mellor was not called as a witness, but we concluded that the document originated with Mr Mellor as a result of the conversation with Mr Priddie. In Mr Dovaston's view it was 'a way forward', but Mr Priddie did not see it until the Tribunal hearing.

8. On 23 June 1998, Mr Dovaston wrote to Mr Ian Jones, LCC's Director of Personnel and Administration (p44). Mr Dovaston noted the lack of progress in Mr Akanbi-Smith's 'investigation' and asked that 'the suspension period should be extended beyond 3 July 1998'. As a fact, LCC continued to pay the applicant after 3 July although the MCC was unaware of this at the time. However, when after the end of July, the MCC received the July payslips, they realised that the applicant had continued to be paid beyond the date agreed. Mr Priddie testified that the MCC then wrote to LCC telling them to stop paying Mr Akanbi-Smith although that letter was not produced in evidence. Whether in consequence of that letter or otherwise, on 17 August 1998, Ms Pam Edwards, the LCC Manager of the Community Development and Resource Team wrote to the applicant in the following terms:

'I am writing to inform you that you will cease to be paid in connection with your past employment as Manager of the Merseyside Caribbean Centre as of Friday 21 August 1998.

As you are aware you were dismissed from your employment by the Merseyside Caribbean Council on 14 June 1998. It was subsequently agreed that you should continue to be paid until 3 July 1998 pending further discussions regarding your dismissal with the Caribbean Council. This arrangement was then further extended on a week to week basis pending the conclusion of these discussions.

The discussions have now concluded and in view of the fact that the Merseyside Caribbean Council has not indicated that they have rescinded your dismissal we are no longer able to administer your pay on their behalf'."

6. The reasoning of the Employment Tribunal is in paragraphs 10 to 16 of the Extended Reasons which are in the following terms.

"10. In reaching its decision in this case the Tribunal has been hampered by two matters. First, the failure to call Mr Mellor as a witness, since as one of the two parties to the 'agreement' on 12 June, his evidence was clearly of importance. Secondly it is evident that in this case there has been a failure to be clear and precise about the use of language which has a material bearing upon the status of the contract of employment.

11 We begin by recording one fact of which there is no doubt, which is that the applicant was dismissed by the respondents on 14 May 1998. However, their language of the two letters of dismissal immediately raise the question as to whether Mr Akanbi-Smith was dismissed summarily with pay in lieu of notice or whether he was given notice of dismissal to expire on 14 June 1998 but was not required to work out his notice. Mr Priddie, in his evidence seemed to be of the view that the applicant was dismissed with notice, such notice expiring on 14 June 1998 and Mr Dovaston was clearly of that view by his letter of 12 June asking for 'an extension of the notice period'. Whichever of these was the case, the applicant would not initially have believed that his employment relationship with the respondent continued beyond 14 June.

12. More critically, there is then the question of what was the 'agreement' between Mr Priddie and Mr Mellor. So far as Mr Priddie was concerned, he was in no doubt that he simply agreed to Mr Mellor's suggestion that Mr Akanbi-Smith should continue to be paid until at the latest 3 July in the hope that the involvement of ACAS would by that time have resulted in an amicable settlement. The document recording the agreement refers rather unfortunately to the applicant 'remaining' suspended until Friday 3 July at the latest, without any indication of how he came to be suspended in the first place. Mr Dovaston's letter of 23 June speaks of extending 'the suspension period', whilst the letter written by Pam Edwards on 17 August to the applicant refers to an agreement that he should continue to be paid until 3 July 1998.

13. Whether or not the respondent intended that Mr Akanbi-Smith's employment should continue after 14 June 1998, or believed that it had, it is in our opinion important to examine not only what the employer intends or believes, but what the employee in question could reasonably be led to believe. After all, a decision to dismiss which was not communicated to an employee would not be effective to terminate his or her employment. Therefore, whatever was the true nature of the agreement, we find that the applicant could reasonably have believed that his employment would not terminate until 3 July, but that there was no scope for his believing, prior to 3 July, that it would continue after that date.

14. Again, whatever Mr Priddie agreed to, or believed he had agreed to, it seems unquestionable that he would not have believed that the applicant remained in the employ of the MCC after 3 July. No doubt because it did not occur to him or anyone else at the MCC to be necessary, no letter was written by the respondent to the applicant confirming that the employment relationship had ended. What, however, could the applicant reasonably have believed? He continued to be paid just as before and we therefore find that he could have thought that his 'suspension' or 'notice period' had been extended once more, especially as there has been no satisfactory outcome of the ACAS intervention.

15. In our view however, all that changed when the applicant received the letter of 17 August 1998. The letter reiterates his having been dismissed (on 14 June – thereby implying a dismissal with notice) and an agreement to continue payment, first until 3 July 1998 and then on a week by week basis. Most crucially, the letter states 'in view of the fact that the Merseyside Caribbean Council has not indicated that they have rescinded your dismissal we are no longer able to administer your pay on their behalf'. At that point, we are of the unanimous opinion that the applicant could not reasonably believe anything other than that he was no longer employed by the MCC. The MCC's belief that he was dismissed was communicated to him and thereafter the employment relationship did not subsist.

16. Since the applicant was not employed by the respondents after 21 August 1998, the respondents did not make unauthorised deductions from his wages contrary to Section 13 of the Employment Rights Act 1996 by failing to pay him.

7. As appears from the findings of the Employment Tribunal a somewhat confused and muddled state of affairs came into existence at or about the time that the one month's notice period referred to in the dismissal letter dated 14 May 1998 came to an end and this confused and muddled picture continued until the letter of 17 August 1998. We also agree with the Employment Tribunal that it is evident that there was a failure by those involved to use clear and precise language.
8. The following are matters found by the Employment Tribunal and they are well within the range of decision that was open to the Employment Tribunal. They are:

(a) there is no doubt that the Appellant was dismissed by the Respondent employers on 14 May 1998, and

(b) there was no scope for the Appellant to believe prior to 3 July 1998 that his employment would continue after that date.

9. We would agree that some criticism can be made of the reasoning of the Employment Tribunal. However, having regard to the facts that they have found and the relevant correspondence which we have seen, we have concluded that there is no reasonably arguable point that the Appellant was entitled to receive wages after the time that the Liverpool City Council (on behalf of the Respondent employers) ceased to pay them. Indeed, it seems to us that there are compelling arguments that the Appellant was not entitled to receive wages from an earlier date.
10. To succeed the Appellant has to show, by way of contract or estoppel, that he was entitled to continue to receive wages after 21 August 1998.
11. The Employment Tribunal record that they are unclear as to whether the dismissal effected by the letter dated 14 May 1998 took place on that date or on 14 June 1998. Further, it is not clear from the Extended Reasons (and we make no finding as to this) whether on 12 June Mr Mellor was acting on behalf of the Appellant through his Union.
12. We therefore have to consider the case on the following alternative hypotheses:

(a) the dismissal took place on 14 May 1998,

(b) the dismissal effected by the letter dated 14 May 1998 took place at the end of the month's notice referred to therein,

(c) the "agreement" between Mr Mellor and Mr Priddie was an "agreement" that Mr Mellor entered into on behalf of and with the authority of the Appellant, and if this is the case that agreement was made before the expiry of the notice period referred to in the letter dated 14 May 1998 and thus on one hypothesis before the dismissal took place, and

(d) the "agreement" made between Mr Mellor and Mr Priddie was an agreement between two persons acting only on "the employer's side" and that what they had "agreed" was not communicated to the Appellant until 15 June 1998 and thus after the expiry of the notice period referred to in the letter dated 14 May 1998.

13. If one stands back and takes an overview of the situation it is in our judgment apparent from (i) the sequence of events, and (ii) the facts found by the Employment Tribunal, that the reason why the meeting took place, and the "agreement" was made, on 12 June was that the appeal process had not by then progressed to a conclusion and that what everybody concerned (on both the employer's and the employee's side) had in mind was the creation of a situation pursuant to which the Appellant would continue to be paid until Friday 3 July to enable the appeal process or the investigation with ACAS involvement (referred to in paragraph 6 of the Extended Reasons and the fax sent to the Appellant's union representative on 15 June 1998), to proceed on that basis.
14. In our judgment the finding of the Employment Tribunal recorded above that there was no scope for the Appellant to believe, prior to 3 July, that his employment would continue after that date is fatal to the argument put before us on behalf of the Appellant that the "agreement" reached on 12 June 1998, or the understanding arising as a result of that "agreement" was that the Appellant would continue to be paid until the outcome of his appeal or the investigation so long as any delay therein was not due to the Appellant's default.
15. We add that in our judgment it would have been very surprising for anyone involved to have thought on 12 or 15 June that the arrangement put in place would extend beyond 3 July 1998, and in this context we note that the fax referred to in paragraph 7 of the Extended Reasons contains the phrase " ----- 3 July at the latest."
16. Further if, and on the basis that, the common understanding of all involved was that the arrangement entered into related to the outcome of the appeal, or the investigation with ACAS involvement, in our judgment such arrangement would have been entered into on the bases that (a) subject to a further decision having regard to the outcome of the appeal process or investigation, the dismissal letter dated 14 May 1998 remained effective, and (b) the outcome would be known by 3 July 1998.
17. In our judgment, it follows that there was no agreement, common understanding or representation that (a) the dismissal was rescinded, or that the Appellant and the Respondent employers were entering into a new contract of employment, or (b) which extended beyond 3 July 1998.
18. In our judgment at most the arrangement entered into when analysed:

(a) on the basis of contact or estoppel, and

(b) on each of the four hypotheses set out above

was that the effect of the dismissal was being held in abeyance (or to use the language in the fax dated 15 June 1998 that the effect of the dismissal was being suspended) until 3 July 1998.

19. There was no response to the letter dated 23 June 1998 from the Appellant's union representative to the Liverpool City Council asking "that the suspension period should be extended beyond 3 July 1998". In our judgment it is not reasonably arguable that the fact that payments continued to be made altered the nature of the previous arrangement.
20. It follows in our judgment that there is no reasonably arguable point that the dismissal of the Appellant was rescinded, or that after its expiry the Appellant was reinstated but suspended on full pay, or any other argument which has the consequence that the Appellant remained entitled to receive wages after 21 August 1998.