United Kingdom Employment Appeal Tribunal

APPEARANCES

 

 

For the Appellant	MR EDWARD KEAZOR (Solicitor) Messrs Bensons Solicitors 84 Walm Lane London NW2 4QY
For the Respondent	MR ANDREW ALLEN (of Counsel) Instructed by: Messrs Beachcroft Wansboroughs Solicitors 100 Fetter Lane London EC4A 1BN

SUMMARY

Time Limits

Letter sent by the Respondent to the Applicant gave the alternatives of summary dismissal or consideration of agreed termination, with a deadline for such agreement, which was subsequently extended. No error in law by the Employment Tribunal in concluding on the facts that, by virtue of such continued negotiations, the letter did not terminate the contract of employment, so that the Originating Application was premature.


 


THE HONOURABLE MR JUSTICE BURTON (PRESIDENT)

1. This has been the hearing of an Appeal by Ms McKay, the Applicant, against the unanimous decision of the Employment Tribunal at London Central, after hearings in December 2003 and March 2004, in Reasons handed down on 12 July 2004, dismissing the Applicant's complaint of unfair dismissal because it was premature, and, consequently, the Tribunal had no jurisdiction to hear the complaint, on the basis that, on the finding of the Tribunal, the Applicant was still in the employment of the Respondent on the date when the Originating Application was issued on 17 April 2003.
2. It is always an irritating and unpleasant task for a Tribunal and an Appeal Tribunal to rule out a case, which may or may not have merit, on a technical ground, but the statute, unfortunately, has to be complied with and the statute does not give the power to an Employment Tribunal to decide such anticipatory questions as whether if, and when, the employment is terminated it will have been unfair. There is a perfectly straightforward solution which was available to the Applicant, who had legal advice from a firm of solicitors, Levenes, at the time; that is, as soon as the Notice of Appearance was on 13 May 2003 put in by the Respondent, making the point, as it did, that the application was premature, because as far as the Respondent was concerned the Applicant was still employed by the Respondent. Any sensible solicitor, in our judgment, would have caused to be issued a protective Originating Application on the part of the Applicant, once it was clear that the employment was terminated, namely, after 27 May, claiming the same relief as in the earlier application, ie compensation for unfair dismissal, either without prejudice to the claim in the earlier Originating Application, or, no doubt with agreement from the Respondent so that the position became entirely clear, in substitution for it. Then the claim for unfair dismissal could have gone forward on its merits without any technical point being made, because of course, the fact that the claim is premature says nothing about whether it would have had merit, if, and when, it was brought in proper time.
3. The Applicant's then solicitors, for whatever reason, chose not to do that, and, consequently, this case went forward only on the issue as to whether the originating application was premature, and with the inevitable result that, if it was found to be premature, the Applicant would be left without any ability to bring a claim at all, because her time would have expired before the bringing of a valid claim.
4. It is in that context that, unusually, this Appeal Tribunal and the Tribunal below has to decide a question, which although technical, carries with it a substantive result, for the simple reason that, in almost every other case that we have come across, the point would at best go to costs, because we would know that there was, standing behind it, another substantive in-time application, in which the merits of the case could be decided. In this case, unfortunately, we have been told there is no such application in the wings, and the consequence of the decision of the Employment Tribunal that this claim was premature, is, in fact, that Mrs Mackay is left without any remedy at all.
5. But that of course cannot affect the question to be decided; the consequences to Ms McKay can have no impact on whether the Decision of the Employment Tribunal was right or wrong. It may reflect on any remedy that she may have against Levenes, but that is about the only relevant factor, and we must harden ourselves to be clear that we have to decide this point on a point of law, if there be one, and, in particular, this Employment Appeal Tribunal must remind itself that appeals lie from the Employment Tribunal only on a point of law, and we must be persuaded that the Employment Tribunal erred in law before we can interfere.
6. The conclusion of the Employment Tribunal, as we have indicated, was that the employment terminated on 27 May 2003. The case for the Applicant was that it terminated on 21 January 2003, and, consequently, that the Originating Application, put in just under three months later, was in time and not premature.
7. The calculation of 21 January arises because that is the date of a letter sent by Ms Freeman, Head of Employee Relations, to the Applicant, and, as the Employment Tribunal pointed out, and found, in circumstances to which we will refer, that letter began as if it was going to be summary dismissal of Ms McKay, who had at that stage, been on long-term sick for some time. She had been, in fact, continuously absent since November 2001. The letter read at the bottom of the first page:

"Clearly you are not in a position to resume your duties as a probation officer with the LPA nor are you likely to do so for the foreseeable future. As you have been continuously absent since November 2001 and have exhausted all your contractual entitlement payments, the LPA has no alternative but to terminate your contract of employment on the grounds of medical incapability. In line with your contract of employment, you are entitled to receive 3 months salary in lieu of notice and annual leave entitlement payment for the 3-month period. These payments would be subject to taxation and other deductions and would be payable to you net. Your notice of termination would take effect from the 22/1/03(when you will receive this correspondence.) The reason for your termination of contract is medical incapability."

8. In those circumstances, if the letter had stopped there, as the Tribunal itself makes clear, there is no doubt at all that this would have been, not a termination on notice, i.e., a dismissal with the Applicant working out the notice (we use "working" of course in the context which would include remaining under contract without working, because of course the Applicant was at that stage incapable of working through ill health) but an immediate termination of contract, with payment in lieu. In paragraph 39 of the Tribunal's decision they say:

"In the Tribunal's view, taken on their own, the words which we have quoted are clear. Those are words of dismissal. They are words of dismissal in terms of a dismissal with money to be paid in lieu of notice. To the minds of the Tribunal, if this letter were to be seen in isolation with no surrounding circumstances, we would have no doubt in holding that there was an immediate termination of employment."

9. Mr Keazor, a solicitor, who appeared for the Applicant below and again before us, of course relied on those words, and has sought to submit that in some way the Tribunal contradicted itself by making such a finding, but then going on to find, as it did, that in fact the contract of employment did not then terminate.
10. However, the Tribunal did not leave it there, and it was entitled not to leave it there, in the light, not only of the fact that it would have been construing half a letter if it had ended there, but also by the obligation upon any Employment Tribunal, made clear in J & J Stern v Simpson [1983] IRLR 52, to consider the context and surrounding circumstances of any words said to be words of dismissal. The Tribunal continues at paragraph 40:

"However, the position is not quite that simple. This is because the remainder of the letter goes on to set out an alternative. The alternative is: Come to terms on a compromise agreement, and that compromise agreement will take the place of the termination with money in lieu of notice."

And, indeed, that is a fair summary of the remainder of the letter because the letter almost immediately continues:

"I am therefore without prejudice, prepared to offer an alternative, which although we have no obligation contractually to do so, may provide for a more positive conclusion for you.

This alternative is strictly without prejudice and is offered in terms of a compromise agreement, which will conclude your employment contract with the LPA."

And then, under five bullet points, the terms of the compromise agreement were set out, and the letter concluded:

"This alternative to the termination of your employment on the grounds of medical incapability is valid for 5 days from the date of its receipt i.e. the 22^nd January 2003, and you are, therefore, requested to contact me indicating whether or not you accept the terms by not later than Monday 27^th January 2003."

11. It seems that, quite sensibly, the Applicant, fairly soon, if not immediately, approached and instructed her union representative, a Mr Cameron, to advise her. That letter plainly indicated that there was an alternative to immediate termination upon terms to be discussed and it placed a very tight deadline, which we have recited. And in a further letter dated 23 January 2003, Ms Freeman acknowledged receipt of a letter from the Applicant's GP and concluded:

"The receipt of the GP letter does not, therefore, alter the terms and proposals outlined to you in my letter of 21^st January and I look forward to receiving your response by close of play on Monday 27^th January."

12. Mr Cameron wrote a lengthy letter to Miss Freeman on that very day, 23 January, in which he recognised, in the fourth paragraph of the letter, that the letter of 21 January contained what appeared to be two different proposals and he then set them out. He said, and one understands this entirely, that to give five working days for a decision seemed both unreasonable and oppressive. An extension of time was sought and granted by the employer. By letter, the next day, of 24 January, written to the Applicant but referring to receipt of the letter from Mr Cameron, Ms Freeman wrote that they were prepared to vary the terms in certain respects and then concluding as follows:

"If you do not so advise by the 29^th January [which was the new deadline] it will be assumed that you do not wish to accept the alternative offer of the compromise agreement regarding your resignation and your termination of the contract on the grounds of medical incapacity will be progressed without further delay."

13. There was then, it seems, a telephone conversation with Mr Cameron, which is referred to in a note from a Mr Mycroft, dated 31 January 2003, which records the following:

"I explained I was happy to extend the deadline for a further week to Wednesday the 5^th February given your confirmation that NAPO were considering whether to enter into a compromise agreement on Ms McKay's behalf."

There is then a further letter from Mr Cameron to a Mr Arthur at the Respondent, which meets that deadline and discusses the terms of the proposals and includes the following:

"I hope Ms McKay's salary might be immediately reinstated from November 2002 onwards, pending negotiations on a settlement of severance. I would also like re-consideration of the issue of medical retirement, and finally, if medical retirement is not possible, I do hope Ms McKay can be given the full settlement offer for legal advice before she signs anything."

If we may say so, it was a very sensible suggestion of the union official, which is often made in this kind of situation, that if termination of employment is inevitable in relation to someone on long-term sick leave, the possibility of that person retiring or being allowed to retire, rather than having her employment terminated, is very often preferable, if suitable criteria can be established.

14. On 17 March 2003 a Ms Moorman, the new Head of Employee Relations, wrote to the Applicant with a copy to Jeremy Cameron, referring to a meeting that she had had with Mr Cameron on 14 March:

"with a view to progressing resolution of your outstanding employment issues."

and she concludes:

"If you are now in a position to sign the agreement, please do so and return it to me so that we may make the appropriate payments to you and bring your employment to an end."

15. The Tribunal analysed what occurred after the 21 January letter, and concluded in paragraphs 54 onwards of the decision as follows:

"54. The conclusion to which the Tribunal is driven is that there was no dismissal in January 2003, because what was clearly intended on the part of Ms Freeman (albeit she had no authority so to do) to be a process of termination, subject to a "compromise agreement", was never actually "progressed". Instead, the discussions at the intervention of Mr Cameron with the knowledge and authority of the Applicant, put those matters on hold, as was made clear in Ms Moorman's subsequent letters. It therefore follows that Ms McKay remained in employment during the period following 21 January 2003, up to and including 27 May 2003, when the Respondent wrote subsequent to the panel hearing on 20 May 2003."

The Tribunal continues in 55:

"This has been a particularly difficult case on its facts, because the normal "indicators" are not present. The Applicant was not being paid monies, in any evident sense, because she was on "zero payment" having exhausted her pay benefits. In consequence, one of the most significant "indicators" has not been available to the Tribunal here. Nevertheless it seems to the Tribunal that what was critical in all of this was the intervention of the NAPO representative following the Applicant's receipt of the letter of 21 January 2003. That changed entirely the nature of the circumstances outlined by Ms Freeman in her letter of 21 January, with the result that the intention on the part of the Respondent, (albeit without authority) to terminate the employment of the Applicant and to pay money in lieu of notice was never "progressed" and remained without effect as a "thing writ in water"."

16. It is important perhaps to mention what was not argued, and is not being argued, in relation to these events. First, it was not argued, as indeed the Tribunal itself records, that the sending of the letter of 21 January constituted, or indeed any conduct by the employer constituted, a constructive dismissal of the Respondent; indeed, if that had been sought to be argued, there would have been difficulties by way of whether any such constructive dismissal, or repudiatory breach by the Respondent, was accepted by the Applicant at any stage. Secondly, it was not, and is not sought to be, argued that the contract of employment, if it did not terminate on 21 January, terminated at any other stage, either on 29 January or on
    5 February, or on any later date, other than the eventual 27 May date, when the Respondents sent their letter. Thirdly, it is not sought to be contended that the letter of 21 January amounted to the giving of notice, either by way of the original format of the letter, or as the result of some argument of suspension of a notice period which might have triggered some kind of argument under section 111(3) of the Employment Rights Act. The only argument that was made below, and the argument that has been repeated before us today, is that the Tribunal erred in not finding that there was summary dismissal on 21 January 2003.
17. 17.              That is sought to be argued in two ways. One, a contentious way, to which we will return, and one more straightforward. The contentious way is so described because there a dispute as to whether it was run below, and, if not run below, then it would be inappropriate to run it before us, because it would be bound to carry with it evidential implications. But having said that, the submission by Mr Keyser is as follows, that the negotiations, which commenced clearly after 21 January, and, in however slow-moving a way, continued thereafter, at least until March, are to be regarded, once terminated, as never having occurred. So that once it is clear that no result was achieved by virtue of the negotiations, there is a retrospective termination on 21 January 2003.
18. That seems to us, not only not to accord with any kind of common sense or factual context, but to offend against the principle set out in Fitzgerald v University of Kent at Canterbury [2004] IRLR 300. There is no basis upon which employment can be terminated retrospectively. Employment is too important a matter of status for both parties to think they are in an employment relationship, and, then, retrospectively, for that employment relationship to be removed. In any event, we are not clear that the matter was argued below and it would have involved certainly more evidential consideration than was given.
19. The second and main basis upon which Mr Keyser puts the matter before us today, is, in effect, that the negotiations should be disregarded, because they were without prejudice, or, at any rate, the terms of such negotiations were without prejudice. And, thus, he submits, the contract was terminated on 21 January, and all that occurred thereafter was without prejudice negotiations as to the terms of termination, which never came to anything, and did not thereby affect the termination which had already occurred. That submission plainly was made to the Tribunal, and the Tribunal rejected simply by reference to the evidence before it and clearly, primarily, the content of the letters to which it referred. There was no evidence, as we understand it, adduced from Mr Cameron, and thus, nothing to oust, what appears to us, to be the clear picture we have described from the letters, and, indeed, which the Tribunal found, namely, that both sides regarded the contract of employment as continuing, at least until 5 February 2003, by virtue of the express extension of the deadline, and, thereafter, by virtue of no further step being taken to terminate the contract on either side. But, in any event, as we have indicated, continuation, even until 5 February 2003, spells finis to the argument, which is the only argument put forward by the Applicant, that the contract terminated on 21 January.
20. In any event, it is clear from the letter of 4 February 2003, which we have quoted, that very sensibly, Mr Cameron was seeking to negotiate a medical retirement, and a medical retirement necessitated the continuation of the employment relationship until that retirement was successfully negotiated, which emphasises that it was, at that stage, in the Applicant's own interest that the employment relationship was continuing.
21. We see no error of law in the decision of this Tribunal, no basis on which it can be challenged, either by way of its approach in law, or even on the grounds of perversity, if that were asserted, and, for all these reasons, this appeal is dismissed.