United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR M BALLINGER (of Counsel) Instructed by: Messrs M & S Solicitors Ltd Home Farm 5 Newton Road, Heather Leicestershire LE67 2RD
For the Respondent	MR N GRUNDY (of Counsel) Instructed by: Messrs Davies Wallis Foyster Solicitors 5 Castle Street Liverpool L2 4EX


 


HIS HONOUR JUDGE WILCOX:

1. This is an appeal from a decision of a Tribunal sitting at Shrewsbury on 23 April 1999. The decision was that the Tribunal had no jurisdiction to deal with an allegation of breach of contract as between an Insurer and a beneficiary under a policy of insurance and the Applicant's claim, was therefore dismissed. We accept that the problem that confronted the Tribunal below was by no means a straightforward problem of contract, it was a difficult problem and it was a problem compounded by the fact that the Applicant was not professionally represented at the time. Having said that, he was represented by his wife. We have seen examples of the letters and submissions that she has made and I have no doubt that she did the very best she could to assist the Tribunal on that particular occasion. Essentially, this is a matter of contractual analysis.
2. I will set the scene briefly, so far as the background facts are concerned. The Applicant worked for the Respondent from 1982 until 1998 when he became unfit to continue work, by reason of ill health. By that stage, he had been employed as under a contract of employment. That contract was varied in this way: - The employer in fact gave a further benefit. I refer to a letter of 1 April 1987:

"Dear Keith

As an additional benefit to your employment, we have effected today a permanent health insurance policy designed to safeguard you against long term sickness.

The policy becomes operative after 6 months of absence from work and will pay 75% of salary, less any state benefit you receive for the period until your return to work, regardless of the length of absence.

This, I believe is a valuable benefit giving security of income, in case of long term illness. The policy in no way affects the existing sick benefit provision, which remains a stated on the contract.

I would remind you that the company does carry death in service policy out on your life, which in the event of your death whilst in the employment of the company, pays to your nominated dependants a sum equivalent to 4 times your annually declared gross salary."

Then it goes on about nominating the beneficiary in that case.

3. It is clear that that letter is the basis of a further or varied contractual obligation between the employer and the employee. We have no doubt about that. Sadly and subsequently, the Appellant fell into ill health and received some benefit under the scheme, under the insurance policy that had been effected by his employer. That was with Unum as they are now called. There were difficulties in relation to the securing of benefits under that policy. We are not in a position to adjudicate why this was so. It is not for us to decide. Suffice it to say that at the end of the day there were disputes relating to entitlement between the Appellant and the Insurers. The Appellants referred the dispute to an independent body, the Insurance Industry Ombudsman. There was an award made. We are not going to consider the terms and effects of that award, how it was arrived at or indeed what matters prevailed upon the mind of the Appellant to accept it. It is not our role.
4. I go back to the extended reasons. At paragraph 5 of the extended reasons of 18 May, there is an implicit finding that where there was no contract as to the provision of health care between the employer and the employee. There was in our judgment, a varied contractual arrangement, evidenced by amongst other things the letter to which I have referred. The actual terms as to the scope of the varied contract is not apparent. It was for a Tribunal at first instance to consider the full factual matrix and to decide what were the express terms and/or implied terms of the varied contract, relating to the permanent health insurance. There are considerations that may arise such as this:

• The effect of the letter of 1 April 1987.

• Was the obligation of the employer merely to effect a proper permanent health insurance policy, to keep up the payments and to support the continued employment and therefore entitlement of the employee?

• Or does it go further?

• Does it mean having regard to the full factual matrix that the employer on the basis of that letter and other matters had assumed the full primary obligation himself to provide the health care?

5. These are all considerations that ought to have been addressed in our judgment by the Tribunal. When one is being confronted by an un-represented applicant with difficult questions, of law care should be taken to arrive at a basic contractual analysis:

• What was the contract?

• What were its terms?

Then to consider whether or not there was a breach of the terms as found. We note in passing that a similar exercise was followed in the case of Villella v MFI Furniture Centres Ltd [1999] IRLR 468 by Green HJ. That was a contract matter relating to an employment contract in the Queen's Bench Division. There were similar insurance arrangements made, we do not have of course the full terms of the documentation in that case or in this case to compare like with like. There Green HJ took the view that the primary obligation to provide the care was in fact upon the employer but the case turns upon its own facts. This is a case that may be resolved in a wholly different way.

6. There is no indication in the reasoning that by way of these matters addressed. The Appellant does not know the basis of the Tribunal's reasoning. He is entitled to know that we remit this case for hearing to a fresh Tribunal.
7. We remit this matter for a fresh Tribunal hearing reconstituted to provide the mixed question of law and fact.