United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MS J McCAFFERTY (of Counsel) Instructed by: Messrs Reynolds Porter Chamberlain Solicitors Chichester House 278-282 High Holborn London WC1V 7HA
For the Respondents	MR O HYAMS (of Counsel) Instructed by: Kent County Council Legal & Secretariat Sessions House County Hall Maidstone Kent ME14 1XQ


 


MR COMMISSIONER HOWELL QC

1. This is an appeal by Mr Kevin James Jones, a former schoolteacher, against the Decision of the Ashford Employment Tribunal set out in Extended Reasons sent to the parties on 10 July 2002, in which they rejected his claims of breach of contract and wrongful dismissal in the termination of his employment by the Respondents, the Governing Body of Barton Court Grammar School in Kent where he worked, on 30 April 2001 on the ground of permanent incapacity. Mr Jones' application to the Tribunal, made on 27 July 2001 with the backing of his union, the NASUWT, had also complained of unfair dismissal, and this complaint too was rejected, but there is no appeal against that aspect of the Tribunal's Decision. The appeal on the contractual aspects of the claim, as argued before us at the full hearing, came down in reality to two points on the construction of the notice provisions of the National Scheme of Conditions of Service for Schoolteachers in England and Wales (the "Burgundy Book") which it was common ground was incorporated by express reference in Mr Jones' permanent written contract of employment with the Respondents, dated 1 September 1993. We were told by Ms McCafferty, who appeared on Mr Jones' behalf, and Mr Hyams, who appeared for the Respondents instructed by the Kent County Council which is the relevant Education Authority, that these points were considered to be of general importance by the teachers' unions and education employers and authorities alike.
2. Mr Jones, who had been continuously employed from 1 September 1991 and received his permanent appointment a year or two later, became unable to work from 19 June 2000 onwards because of a stress-related disorder. After some time had elapsed, a medical examination was arranged under the school's procedure for the management of absence, and the advice was that he was not currently fit to return to his work as a teacher and it was unlikely that he ever would be. Subsequent steps under the absence and disciplinary procedures led to a decision in terms of paragraph 24, Schedule 17, School Standards and Framework Act 1998 on 8 February 2001 that his employment would have to be terminated, and that decision was confirmed on the appeal required under paragraph 24 on 27 February 2001. There was confusion on everybody's part as to who was the correct employer to give him notice. What in fact happened was that on the same day, 27 February 2001, two documents were served on him, the first a letter from the Governors giving him the results of the appeal hearing and saying:

"This means that the decision of the Dismissal Panel confirmed to you in writing on 8^th February 2001 ….. is upheld, and the termination of your contract on the grounds of capability due to ill-health is endorsed. The Local Education Authority is aware of this decision and will write to you separately to issue formal notice of dismissal, to take effect from the end of the Spring Term 2001."

The second was a letter of the same date from the Senior Personnel Officer of the Kent County Council Education Authority saying that in consequence of the appeal decision:

"I am writing to issue you with formal notice of dismissal from your contract of employment with Kent County Council. You are entitled either to contractual notice of two calendar months in the Spring Term, terminating at the end of the school term on 30^th April; or to statutory notice of one week for each complete year of service, up to a maximum of 12 weeks. As your continuous service dates from September 1991 you are entitled to nine weeks notice. This notice period will begin immediately and your last day of service will be Monday 30^th April 2001."

3. Mr Jones originally brought his proceedings against both the School Governors and the Education Authority, but by the time of the Tribunal proceedings it had become clear that, although the two had of course acted in conjunction with one another, the true employer had at all material times been the Respondent Governors. Similarly, Ms McCafferty confirmed there was no dispute that the actions of the Governors had in fact caused a termination of Mr Jones' employment on 30 April 2001, by making it plain that they no longer accepted him as one of their employees after that date even if, as contended on his behalf, they had failed to give him a valid and effective notice of termination on that date in accordance with his contract. It was, of course, on that basis that his proceedings for unfair and wrongful dismissal on that date had been brought against them. Conversely, by the time of the appeal hearing before us Mr Hyams conceded on behalf of the Respondents that the two letters served on Mr Jones only in the late afternoon of 27 February 2001 could not constitute a valid nine weeks' notice to terminate the contract on the following 30 April, which had been the basis on which the Tribunal had rejected the contractual claims. The statutory requirement under section 86 Employment Rights Act 1996 for a person with nine years' continuous service is for not less than nine weeks' notice, which for a termination to take effect on 30 April 2001, would require 27 February to count as day one of the notice period; and the Tribunal had been simply wrong in holding, as they did, that the period could be counted from that date, when the notice was only delivered in the late afternoon or evening of that day. Consequently, Mr Hyams conceded that only eight weeks and six days notice had been given, and the Tribunal had been wrong in holding that sufficient for a valid contractual termination by due notice. In that, Mr Hyams was in our judgment plainly correct.
4. Consequently, the issues between the parties narrowed to a single question of how the compensation should be calculated for an admitted termination of the contract of employment on 30 April 2001, on the basis of an admitted breach of contract in the Respondents' failure to give due notice to terminate it on that date. The two extremes of the argument are represented by Mr Hyams' contention that the damages should be limited to a single day's pay in lieu of notice since the notices given were only a day short of the required statutory period; and Ms McCafferty's alternative contention that because of the special provisions for teachers' sick pay and the dates in the year when notice to terminate their employment may validly be given, dmages should be assessed on the basis that Mr Jones' contract could not validly have been brought to an end for a further eight months until the last day of the calendar year 2001.
5. These contentions depend on the proper construction of the notice and sick pay provisions themselves, which so far as material are as follows. In Mr Jones' written contract with the school, under the heading of "Terms and Conditions":

"The appointment is subject to the provisions of the Education Act 1944 and amending Acts; ….. the National Scheme of Conditions of Service for School Teachers in England and Wales …..

NOTICE - TERMINATION OF CONTRACT

Notice to terminate the appointment may be given either by the Governing Body or by you. Except in the case of misconduct or other urgent cause when you may be dismissed summarily, the Governing Body or you must give the other two calendar months' notice expiring at the end of the Spring or Autumn terms (30 April or 31 December respectively) or three calendar months' notice expiring at the end of the summer term (31 August)."

And by the national scheme, the "Burgundy Book":

"Section 3: Appointment: Resignation: Retirement

1.1 ….For the purpose of these arrangements the three terms in each year shall be constituted as follows:

the Summer term from May 1 to August 31;

the Autumn term from September 1 to December 31;

the Spring term from January 1 to April 30

….

4. Period of notice and termination of contract

4.1 All teachers shall be under a minimum of two months' notice, and in the Summer term three months', terminating at the end of a school term as defined in paragraph 1 above.

…

4.3 Notwithstanding paragraph 4.1 above, where a teacher has been continuously employed for more than eight years he/she shall be entitled to receive additional notice, as specified in the Employment Rights Act 1996.

4.4 The provisions of paragraphs 4.1 to 4.3 apply to the termination of a teacher's contract for any reason other than gross misconduct, including dismissal for ill-health and redundancy.

…

Section 4: Sick Pay Scheme

1. Leave of absence

This section covers entitlement to sick pay and sick leave and the conditions to be fulfilled for those entitlements.

2 Sick leave and pay

2.1 Provided the appropriate conditions [as to notification and submission of medical certificates etc] are met, a teacher absent from duty because of illness (which includes injury or other disability) shall be entitled to receive in any one year sick pay as follows:-

…

During fourth and subsequent years - full pay for 100 working days and half pay for 100 working days.

…

4. Sick Leave year

4.1 For the purpose of calculating a teacher's entitlement during a year under paragraph 2, a year is deemed to begin on 1^st April and end on 31^st March of the following year …..

Where a teacher is on sick leave on 31^st March in any year, no new entitlements shall begin until the teacher has resumed duty and the period from April 1^st until the return to duty is regarded as part of the preceding year's entitlement

…..

6 Termination of employment during a period of sick leave

6.1 In the event of a teacher exhausting in part or full his/her entitlements under paragraph 2.1 above and being given notice of the termination of his/her contract without returning to work on the ground of permanent incapacity or for some other reason related to the sickness absence, he/she shall be paid full salary for the notice period with normal deductions only."

6. The two substantive points argued on the appeal were whether the combined effect of section 3 paragraph 4 of the Burgundy Book and section 86 Employment Rights Act 1996 permitted an employer to give a statutory period of notice so as to bring about a termination on any date other than one of the three term-end dates specified; and whether there was an implied term preventing the employer giving any notice at all to bring about a termination if this had the effect of depriving the employee of any part of a still continuing entitlement to sick leave pay under section 4.
7. The practical effects of these points were that if Mr Hyams were right and a statutory period of notice could be given so as to expire on any date of the year and whether or not there was a continuing entitlement to sick pay, the damages for the Respondents' failure on 27 February 2001 were limited to the equivalent of a day's pay only; conversely if Ms McCafferty was right that a valid notice, whether for the standard contractual period or for that period as extended by statute, could only ever be given so as to expire on one of the three term end dates, the earliest date for which a valid notice could have been given after the Respondents' failure to do this on 27 February 2001 was for 31 August which entitled Mr Jones to three months' notice at full pay from 31 May since it was the summer term, plus continuing sick pay at the half rate to which he remained entitled from 30 April until the start of a valid notice period. Further or alternatively, if her further contention based on the implied term against depriving him of a continuing sickness entitlement was right, the balance of his one hundred days at half pay would not have been due to run out until 26 June, so that on that basis it would not have been open to the Respondents to give notice for the end of the summer term so as to cut off his sick pay prematurely; he would have had therefore to be paid the balance of his sick pay until 26 June and thereafter kept on the books as an employee, albeit with no sick pay entitlement, until the next date a valid notice of termination could be given, which would have been 22 October 2001 to bring his employment to an end on 31 December, after the ten weeks' statutory notice to which he would by that time have become entitled. Although the ten weeks' full pay for that notice period, plus the extra twenty six days half pay under the sick pay scheme for June, might not give him any cash advantage over the three months' notice at full pay for a termination in the summer term, the extension of his total period of service could have some countervailing advantage under the Teachers' Superannuation arrangements. On either basis it was conceded that as Mr Jones had in fact gone on to an immediate ill-health early retirement pension under those arrangements from the termination of his service on 30 April 2001, the benefits thus received by him for the period from then until the expiry of whatever was the proper notice period, must be brought into account in the assessment of damages.
8. Both points are simple points on the construction of a teacher's terms and conditions of employment, and the answers to them do not permit of much elaboration. In our judgment, Ms McCafferty's argument is entitled to succeed on the first point since we think it is plain by the expressed provisions of both the individual letter of appointment from the school and paragraph 4 of section 3 of the Burgundy Book that a notice by the employer to effect a valid contractual termination of the employment must be given (save in the case of a summary dismissal for gross misconduct or other cause for which no notice at all is required) so that the notice period terminates on one of the three stipulated term end dates in the year, and may not be given so as to terminate on any other date. The restriction of the giving of notices so as to take effect at these term end dates only is a requirement applying to both sides of a teacher's contract, and its inclusion in the collective agreement in the Burgundy Book provisions is for obvious reasons considered reasonable and advantageous to both sides, given the special nature and requirements of this kind of employment. In that context we reject a subsidiary argument by Mr Hyams that it would have been "ultra vires" for a local education authority or board of governors to enter into such terms at all if that was what they meant: we were not persuaded there was any arguable ground for saying it was improper or unreasonable for them to do so.
9. There is nothing in the provisions of section 86 or the remainder of part IX of the Employment Rights Act 1996 that purports to override or affect a contractual provision agreed between the parties that a notice to terminate the contract of employment may only do so effectively on certain dates of the year; all that section 86 requires is that the period of notice to achieve this may not be less than the minimum number of weeks for which the section provides. That requirement is expressly acknowledged by, and indeed incorporated in, the contractual provisions in section 3, paragraph 4 of the Burgundy Book itself which makes it clear that the standard contractual periods of two and three months are minimum periods, to which any balance of the statutory period of weeks required under section 86 has simply to be added for the purpose of operating the notice provisions under the contract itself. That, in our judgment, is clear on the express terms of paragraph 4.1 stating the minimum periods of notice to terminate at the end of the school term as defined, coupled with paragraph 4.3 which makes clear that there may be an entitlement to receive "additional notice" over and above the two months where a teacher has been continuously employed for more than eight years, but without in any way purporting to alter the term-end termination dates for which the required period of notice must be given so as to become effective. As Ms McCafferty pointed out, to construe "additional notice" in paragraph 4.3 as meaning "substituted notice" that could bring a teacher's contract to an end on any day of the year, but by definition only applicable to the more experienced teachers with nine or more years' continuous service, would be an absurd result inconsistent with any rational intention or the rest of the contractual provisions. We reach our conclusion on what appears to us to be the plain wording of the Burgundy Book and other contractual provisions before us, reinforced by the similar conclusions reached on other not materially different provisions in the two cases of Cubberley -v- Hereford and Worcester County Council (Worcester County Court: His Honour Judge Matthews, 20 December 1993) and Hughes -v- Governing Body of Archers Court School (EAT/1444/01), a decision of this Appeal Tribunal with His Honour Judge Prophet presiding, given on 15 January 2003) to which our attention was drawn.
10. The first of Ms McCafferty's contentions therefore succeeds, with the result that Mr Jones is entitled to have his damages computed by reference to the earliest termination date for which notice could validly have been given under his terms of employment after 27 February 2001, that is by three months' notice to expire at the end of the summer term on 31 August of the same year.
11. We are not however persuaded that Ms McCafferty's further submission, that it was not even open to the Respondents to give a contractual notice of termination for that date because of what would otherwise have been a continuing entitlement to sick pay at the half rate until 26 June, was well founded. It was common ground that this too was a matter of construction of the contract, and whether a term should be implied in it that no action could be taken by the employer to bring about a termination so as to cut short a sick pay entitlement which was only partly exhausted and would otherwise continue. In support of such an implication Ms McCafferty relied on such cases as the decisions of the Court of Session in Hill -v- General Accident [1998] IRLR 641 and of Sedley J, as he then was, in Aspden -v- Webbs Poultry & Meat Group (Holdings) Ltd [1996] IRLR 521, where terms to that or similar effect had been implied in the contracts there being considered. It is not necessary for us to say anything about the conclusions reached in those other cases since whether an additional term is to be implied to modify or limit the written contractual provisions must always be a matter for the construction of the individual contract in question, and no such implication can be possible if the contract itself contains an express provision to the contrary. On the contractual provisions before us we have no doubt that Mr Hyams was right in saying, as the Tribunal in our judgment correctly held, that no implication of the kind for which Ms McCafferty argued can be made, since that is necessarily inconsistent with the express terms of Section 4 paragraph 6 of the Burgundy Book, providing unambiguously for the termination of employment during a period of sick leave even though the sick pay entitlement may be only partly exhausted, by notice which it is expressly contemplated may be given:

"on the ground of permanent incapacity or for some other reason related to the sickness absence".

We agree with the Tribunal that that is necessarily inconsistent with any intention by implication that the contract of employment could not be brought to an end until all sick pay entitlement had been exhausted even where, as here, it becomes apparent during a period of absence from work on sick leave that the incapacity has become permanent so that the employee is never going to be able to return to work at all.

12. A third question argued before us was whether the letters served on 27 February 2001 amounted to the giving of notice by the Respondents at all in view of the references to the formal notice to terminate employment being given by the County Council instead, but that is unnecessary for us to determine in view of the concession that no valid notice for the required period was given for the termination which in fact took place on 30 April 2001. On that basis, the only relevant issues were on how to assess the Appellant's loss from that admitted failure.
13. At the conclusion of the argument each side made a putative application for leave to appeal to the Court of Appeal against any aspect of our Decision which might be against them, reflecting what we were told was the desire of teaching unions and employers to have the most definitive and authoritative ruling possible on points regarded as of general importance. While we feel bound to say that these appear to us to be relatively simple points of construction that would not otherwise have merited the attention of the Court of Appeal, we grant leave to appeal to the Respondents on the first point in view of that special factor. We do not grant the Appellant leave to appeal on the second point, which on the material before us was not shown to make a substantial practical difference to him and appeared to us to be concluded by the plain terms of the contractual provisions; though of course it may be able to be raised by way of Respondent's notice or cross-appeal if the Governors do pursue an appeal on the first point.
14. We accordingly allow the appeal on the ground that the Tribunal misdirected themselves in computing the required statutory notice period, set aside their consequent Decision dismissing the breach of contract claim, and substitute our own Decision on that claim that based on the admissions made to us and the conclusions we have reached on the construction points, the Respondents were in breach of Mr Jones' contract by failing to give him proper notice to terminate his employment on 30 April 2001, and the damages for this are to be assessed on the basis that his employment would not have otherwise terminated on that date but would have been validly terminated by the Respondents giving three months' notice on 31 May 2001, so as validly to bring his employment to an end on 31 August of the same year.