United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR PHILIP THORNTON (of Counsel) Instructed by: British Telecommunications PLC Legal Services Post Office LF19 Libra House Sunrise Parkway Linford Wood Milton Keynes MK14 6PH
For the Respondent	THE RESPONDENT IN PERSON


 


HIS HONOUR JUDGE BIRTLES

Introduction

1. This is an appeal from the Decision of a Chairman sitting alone at London Central Employment Tribunal on 5 July 2002. The Chairman was Mr M F Haynes. In a Decision which gave Extended Reasons, Mr Haynes decided that the Applicant, Mr Asquith, was entitled to damages for breach of contract, and, second, that the matter be adjourned for a remedies hearing on 9 August 2002. We have been told and accept that a remedies hearing subsequently was held, but there is no appeal from that today although, obviously, it may be affected by the Decision we reach today. Mr Haynes' Decision was entered on the register and sent to the parties on 16 July 2002.

The Appeal

2. The Appellant is British Telecommunications PLC, who were the Respondent in the Employment Tribunal. The grounds of appeal are succinct and allege that the Employment Tribunal erred in law in construing the employment contract in such a way as to limit the Appellant's right to terminate the contract of employment in situations other than where there were issues relating to unacceptable performance, health, attendance, and/or conduct. In this case, the reason for termination was lack of availability for work and the ground of appeal is that on a point of law, on a proper construction of the contract, the Appellant was in fact entitled to terminate the contract of employment at any time during the currency of the contract, for any reason, provided that it complied with the provisions contained within the contract related to the giving of notice.

The material facts

3. Before the Employment Tribunal, the Applicant, Mr Asquith, had prepared a witness statement which was apparently accepted by the Respondent (the Appellant here), and for the Appellant here, the Respondent in the Employment Tribunal, a Mrs Sheila Dawson gave evidence in the form of written witness statement and answered some short questions from the Chairman and from the Applicant, Mr Asquith. Mr Asquith was employed by British Telecommunications PLC under a written letter of offer, dated 18 January 2001. He was to be employed as a full-time B2 Internal, commencing on 25 January 2001. We understand that to be an engineering position. This case concerns the construction of that letter of appointment, together with a very limited part of the additional contractual documents and, therefore, I think it is important that I read the main part of that letter. As I say, it is dated 18 January 2001 and begins:

"Dear Mr Asquith

Offer

On behalf of British Telecommunications plc (BT), I am pleased to offer you fixed term employment as a full-time B2 Internal commencing on 25 January, 2001 on the terms and conditions stated in this letter and those included in the accompanying documents.

- Statement of t he Terms and Conditions (Appendix A)

- Statement of General Terms and Conditions (Appendix B)

- Protection of BT Information (Appendix C)

- Conduct at Work (Appendix D)

Temporary Employment

Your employment will end on 12^th March, 2003, subject to earlier termination, e.g. on grounds of unacceptable performance, health, attendance, and/or conduct, as indicated in the enclosed 'Statement of General Terms and Conditions'."

The letter goes on to deal with a number of other matters that one would expect to find in a letter of offer of this kind, but there is nothing else which material to this appeal. Appendix B, the General Statement of General Terms and Conditions contains two material passages. The first is at page 35 of the bundle, and the subheading is "Periods of Notice" and it reads thus:

"If the company decides to terminate your employment before the normal retirement age of 60 (other than for gross misconduct or on the expiration of a fixed-term contract) you will be given a minimum period of notice, as follows -"

and it then sets out the appropriate notice periods. Over the page, at page 36, in the middle of the page, there is another paragraph which is still under the subheading "Periods of Notice", and it says this:

"BT is under no obligation to provide you with work and may, if notice to terminate this contract has been given, vary your duties or require you to cease performing all duties during all or part of the notice period. In the event BT may exclude you from the premises of the BT Group and may require you to do no work for any other company, firm or persons during the notice period but BT will continue to pay your salary and provide the benefits due under this contract until it terminates."

The letter of offer that I have referred to, employed Mr Asquith from 25 January 2001 with a termination end date of 12 March 2003: it was clearly a fixed-term contract.

The argument in the Employment Tribunal

4. In the Employment Tribunal it was argued by Mr Asquith that the phrase in the paragraph of the contract of employment, which I have referred to and quoted in paragraph 3, limited the grounds on which BT could terminate his employment. Each of those categories or reasons for dismissal, that is unacceptable performance, health, attendance and/or conduct, related to some failing or state on the part of the employee. In his case, because he was dismissed because, the Tribunal were told, for lack of work, that was a very dissimilar reason from the ground stated in the letter of offer, and therefore as a matter of law, the contract did not provide for him to be dismissed because of the non-availability of work. For British Telecommunications PLC, the contrary was argued; the words "subject to earlier termination", read together with the notice periods, in Appendix B of the Terms and Conditions of Employment, meant that the employer had an unfettered right under the contract to terminate the employment for any reason. It is important to note that Mr Asquith was dismissed on 28 September 2001, on five weeks' notice, the effective date of termination being 2 November 2001. He was therefore unable to take advantage of the protection of the unfair dismissal legislation.

The Decision of the Employment Tribunal

5. The Chairman, sitting alone, found for Mr Asquith and the core of his Decision is at paragraphs 8 and 9 of the Extended Reasons, pages 3 and 4 of the bundle. It is not necessary for us to quote that in any detail. The Chairman accepted that there was similarity in the words set out in the letter of offer, that is:

"on grounds of unacceptable performance, health, attendance, and/or conduct"

and that those words limited the contractual power of the employer to dismiss Mr Asquith prior to the expiration of his fixed term contract on 12 March 2003.

The arguments in the Employment Appeal Tribunal

6. Before us today, Mr Thornton appeared for BT, the Appellant, and Mr Asquith appeared in person. We are grateful to both of them for the assistance which they have given to the Tribunal today. Suffice it to say that each of them has very much repeated the submissions that were made in the Employment Tribunal. For the Appellant, Mr Thornton has argued that the wording of the letter of offer, dated 18 January 2001 read together with the passages I have quoted at pages 35 and 36 of Appendix B, the Statement of General Terms and Conditions of Employment, sent to Mr Asquith, together with the letter of offer, give BT an unfettered right under the contract to terminate Mr Asquith's employment at any time after he commenced employment on 25 January 2001, and for any reason, and the words that I have quoted do not limit the power to dismiss under the contract of employment in any way. Mr Asquith has argued, as he did before the Employment Tribunal, that those words do limit the contractual power to dismiss him and he relies upon the reasoning of the Chairman of the Employment Tribunal.

Decision

7. Having considered the matter very carefully, two of us, that is Mrs Vickers and myself are of the view that this appeal should be allowed. Mr Smith dissents from that view. In the view of the majority, the Chairman erred in law in construing the contract of employment in the way that he did. The core of the Chairman's Decision, in paragraphs 8 and 9 of his Decision, is an expression of what is known as the Ejusdem Generis rule, although he does not specifically refer to that rule. As Mr Thornton has submitted to us, that rule requires three criteria, before it can operate. The first is that sentences in a contract must set out some particular words, that is the case here; second, there must be some common characteristic between those words, that is the case here; thirdly, there must be general words, following those particular words, having a common characteristic, which require the operation of the rule and require those general words to be construed in the same manner or a like manner, as those particular words: see Chitty on Contracts Vol 1 paragraphs 12-085/12-088 (28^th ed. 1999). What is missing in the letter of offer are any general words following the particular words:

"on grounds of unacceptable performance, health, attendance, and/or conduct"

It is therefore clear to us that the Ejusdem Generis rule cannot apply to the construction of this contract. In the alternative, we also accept Mr Thornton's second and alternative submission that if there are any general words, they are: "subject to early termination", and they precede the particular words "having a common characteristic"; they do not follow it, and it is therefore for that reason also that the Ejusdem Generis rule cannot apply. The minority, Mr Smith, finds that the analysis of the Chairman, at paragraphs 8 and 9 is compelling and, for the reasons that the Chairman gave in his Decision, he would dismiss this appeal. He would also say (accepting that the issue of perversity was not argued in this case by Mr Thornton) that, in his view, any argument of perversity, if made, would not have had any chance of success at all. It follows, therefore, that for the reasons we have given, that the Chairman was in error in his construction of the contractual documents; that amounted to an error of law, and we would allow the appeal. We would also say we accept that when Mr Asquith received the letter terminating his employment, it made no mention whatsoever of any reason why he was dismissed. Indeed, the first he knew of the reason was when he appeared at the Employment Tribunal, and evidence was given as to the reason by Mrs Sheila Dawson. We have no doubt at all that if Mr Asquith had been employed for the appropriate qualifying period, he would have had a very strong claim for unfair dismissal. However, he was dismissed before he could qualify for the protection of the unfair dismissal legislation, and our Decision, therefore, has to be limited to the interpretation of the contractual documents. We would add that we were told that there were some twenty two cases pending the outcome of this appeal; no doubt they will now be dealt with, subject to a further appeal. If BT, which is a very substantial corporation indeed, is going to take on short-term employees for fixed-term contracts, we would hope that the contractual documentation will be closely scrutinised and re-written to make it absolutely clear to an employee employed on a fixed-term contract, what the precise reasons for dismissal are, and we can well understand the confusion that Mr Asquith had. We therefore allow the appeal. As this is a pure point of law there is no need to remit this case to the Employment Tribunal.