United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MS S McKIE (of Counsel) Instructed by: Eversheds LLP Solicitors Kett House Station Road Cambridge CB1 2JY
For the First Respondent	MISS C JONES (The Respondent in Person)
For the Second Respondent	Mr P Thake (A Representative)
For the Third Respondent	MS M DOUGLAS (The Respondent in Person)


 


SUMMARY

Contract of Employment – Incorporation into Contract

Employment Tribunal found that the three employees had a contractual term which required the employer to pay any shortfall in post-termination car insurance not paid out by the insurance company. Employment Tribunal in error in analysis as it failed to find either (a) an express term or (b) an implied term.

EAT substituted its decision for there was no such term in the contract of employment. Cross appeal on a claim for repayment of part of notice money rejected on the facts, as the employee had worked for part of the notice period and been overpaid by mistake.


 


HIS HONOUR JUDGE BIRTLES

Introduction

1. This is an appeal and cross-appeal from the reserved Judgment and Reasons of an Employment Tribunal sitting at London South on 9 June 2006. The Tribunal consisted of Miss R A Lester, sitting alone. The reserved Judgment and Reasons were sent to the parties and entered in the Register on 3 July 2006. At the hearing the Claimants were in person and the Respondents were represented by Ms A Ahmed of Counsel.
2. I heard the appeal and cross-appeal on Thursday 15 March 2007. Before me the Appellant was represented by Ms Suzanne McKie, and the first and third Respondents appeared in person. The second Respondent was represented by Mr P Thake. I am grateful to all of them for their skeleton arguments and oral submissions.

The Employment Tribunal Judgment: Issues

3. The issues are conveniently set out in paragraphs 1-2 of the reserved Judgment and Reasons:

'1. By claim form presented on 15 March 2006 the Claimants complained that, having been made redundant by the Respondent at the end of September 2005, they each incurred financial loss by reason of the Respondent's breach of contract in respect of the car scheme that applied to the car each Claimant had during and in respect of her employment with the Respondent. The Respondent denied any breach of contract in respect of any of the Claimants and counterclaimed against each Claimant for sums alleged to have been overpaid arising from or in respect of the notice periods of each Claimant. By letter dated 19 April 2006, a Chairman ordered that the cases be heard together and by letter dated 21 April 2006 it was further ordered that the claims and counterclaims be heard together.

2. At the outset of the hearing it was established that the correct name of the Respondent is The Laurel Pub Company Limited. The essential issue is whether the Respondent is liable to the Claimants. The insurers are, it appears, resisting liability; the Respondent's argument is that it was not a party to that insurance contract and is not liable for any losses sustained by the Claimants. However, the Respondent is assisting the Claimants to pursue the insurers, through Opticar, the relevant management company. For the Claimants, Mrs Jones stated that it was only very recently that there had been discussion about Opticar funding any proposed litigation against the insurers. The Claimants argue that there was a tripartite agreement."

The Employment Tribunal Judgment: The Facts

4. The facts found by the Chairman are set out in the Judgment and Reasons at paragraphs 5-20. The factual matrix in this case is complicated, and I therefore set out the Chairman's findings of fact in full:

"5. Mrs Claire Jones, Ms Karen O'Connor and Ms Marianne Douglas were all employed by the SFI Group plc ('SFI') in jobs which involved them in driving many thousands of miles each year. In June 2005, by reason of a transfer within the Transfer of Undertakings (Protection of Employment) Regulations 1981 (SI 1981/1794), the employment of each Claimant transferred to the Respondent: each Claimant's contract of employment fell within regulation 5 of those Regulations, so as to have effect as if originally made with the transferee (the Respondent). Each Claimant was later made redundant by the Respondent, the employment of each terminating on 30 September 2005.

6. By letter from SFI dated 27 November 2003, Ms Scott, (director of human resources) offered Mrs Jones the position of training and development manager, to be effective from 12 January 2004; Mrs Jones accepted this position 'on the terms and conditions set out or referred to above' (ie in the letter). The terms and conditions included (paragraph 7) those relating to car arrangements: Mrs Jones was entitled to join SFI's 'flexible car scheme known as the ECO plan' or could instead receive 'a cash alternative or a fully expensed company car'. Paragraph 7 stated that details of the ECO [Employee Car Ownership] Scheme were attached to the letter; it also provided:

'It is the condition of the provision of the company car policy regardless of the option you chose that in the event of termination of your employment for whatever reason you shall immediately deliver the car back to the company. If under the ECO scheme your employment is terminated for gross misconduct the car will immediately be returned to the proprietor, the finance company'.

7. Paragraph 8 related to 'the Company's private health insurance scheme' and, in contrast to the previous paragraph, provided:

'If a third party scheme provider refuses for any reason to provide the relevant benefits to you under the scheme, the Company will not be liable to provide or to compensate for the loss of such benefits'.

8. Paragraph 11 ('termination of employment') of the terms provided for notice periods of one month on each side during the first three months of service, increasing to 'three months written notice by either party to the other' after three months' service.

9. By letter from SFI dated 4 May 2004, Ms Scott offered Ms Douglas the position of Group Training and Development Manager: the letter contained paragraphs 7 and 8 identical to paragraphs 7 and 8 in the letter to Mrs Jones. Although I was not shown a similar letter to Ms O'Connor, it was not disputed, and I accepted, that there was a letter offering employment by the Respondent to her containing identical paragraphs; and it was similarly accepted that each Claimant accepted the job offer, with those terms and conditions. Further, I accepted that each Claimant had a written contract of employment providing for the employee to have the use of a company car.

10. Each Claimant accepted the terms and conditions referred to above, and each chose the ECO Scheme. The written policy of SFI for that Scheme (copy at page 45 of R1) states: 'Employees are provided with a monthly car allowance instead of a company car'. (Such arrangements had tax advantages compared with 'ordinary' company car schemes.) The policy provided that a qualifying employee received a monthly car allowance, paid with monthly salary, provided that the employee completed the monthly online mileage log. The policy also stated that:

10.1 SFI Group had a 'partnering relationship' with Opticar whereby employees electing to go on to ECO would be 'eligible to lease a car through Opticar, who will provide employees with a 'One Stop Shop' complete personal motoring package.'

10.2 Employees would be provided with a 'Full Maintenance and Service Contract' and Early Termination (ETI) and GAP insurance.

10.3 Employees could select a vehicle 'from the SFI Group benchmark vehicle list'; the vehicle had to be approved by the SFI Group and sourced by Opticar. SFI reserved the right to refuse any vehicle choice.

10.4 The car selected by the employee would belong to that employee 'subject to full and complete settlement of the finance contract'. The employee, it was stated, would be the legal owner of the vehicle and 'It is NOT a company car'. Under the ECO Scheme, the employee had no option but to purchase the car through Opticar.

11. The policy contains further provisions about ownership of the car. When an employee purchased a car through Opticar, the employee would enter into a contract for a period of two to four years. The contract would include guaranteed final settlement, and 'To take full title and ownership of the vehicle, employees will have a choice of making the final payment or returning the vehicle to Opticar with no further obligations (subject to terms and conditions)'. That of course referred to the position at the end of the contract for the car, not to the end of the contract of employment. Further:

'At the end of the contract you will have the following options:

(a) Return your car to Opticar (and walk away) - subject to being within the contracted mileage and with reasonably acceptable levels of wear and tear;

(b) Sell the car privately and pay the guaranteed final settlement from these funds and keep any profit. This is not a taxable item.

(c) Keep the car and rearrange any outstanding loan over a further period and elect to receive a full cash supplement.'

The policy contained further detailed provisions, about the cash alternative to the ECO scheme. The ordinary 'company car scheme' was later withdrawn.

12. Each Claimant took up the ECO option. For example, Mrs Jones took up the ECO option, chose a car and ordered it from Opticar (page 138 of the bundle, R1). She entered into a credit agreement in respect of the car with GE Capital Bank Limited (pages 139 and 140) and took all the required steps. There was no suggestion that any of the Claimants did not have the opportunity to read the terms and conditions of any of the relevant agreements.

13. The business of Twomey Opticar Limited ('Opticar'), a fleet management company, is to provide a 'one stop shop' for its corporate clients, implementing and managing ECO schemes on their behalf. Opticar deals with the purchasing of employees' individual cars, and manages the scheme on the corporate client's behalf. The employee chooses his or her car and package and Opticar then procures a credit sale agreement on behalf of the employee: in the case of the SFI Group and the Respondent, Opticar used GE Capital Bank. The legal ownership of the car is vested in the employee who has bought it.

14. Opticar also provides a driver with a maintenance package (regular maintenance for the car) and arranges an insurance package between the employee and the insurance company. The insurance covers 'GAP insurance', which pays out if the car is written off leaving a difference between the outstanding credit amount and the sum that the insurance provider will pay out for the value of the car, and also early termination insurance. The latter is to cover any shortfall when the employee leaves the employment and the employer's monthly contributions cease. The employee could, instead, continue to pay under the finance agreement or sell the car and clear the outstanding finance with the sale proceeds. The employee, being obliged under the ECO Scheme to purchase the car through Opticar, had no option but to accept that there would be ETI and that that would be arranged through Opticar, that, is, with the insurers chosen by Opticar.

15. In the case of SFI/the Respondent and the Claimants, the early termination insurance was provided by Insure Online, which purchased the insurance from Market Balance Limited; the insurance was underwritten by Haven Insurance. As found above, in this scheme early termination insurance was compulsory for the employees, which is not uncommon. The Opticar Policy Book (copy starting at page 62 of bundle RI) deals among other things with GAP insurance and Early Return (or Early Termination) insurance. The Policy Book sets out 'terms and conditions' for Early Return insurance, which states, under 'Benefits' (at page 70 of R1):

'We will pay to the Leasing Company the difference between the Early Settlement Figure of Your Agreement and the Sales Value where the Sales Value is the lesser amount, in the event that the Agreement is terminated early as a result [of] Your Unemployment through:

(a) Expatriation…

(b) Unemployment. You become Unemployed during the Period of Cover and as a direct result the Insured Vehicle has to be sold by You or on Your behalf.

(c) Death...'.

(The copy document at page 70A has the same terms, save that 'Resignation' is also covered - not relevant in this case.)

'Agreement' is defined as 'the credit or hire agreement with a Leasing Company' and 'Sales Value' as 'The gross amount received upon sale of the Insured Vehicle...'. 'Early Termination Benefit' is defined as the difference between the early settlement figure and the sales value (if lower). 'You' is the person who has applied for the insurance and 'We' is the named insurance company.

16. The Scheme Rules and Scheme Guide of SFI (copy beginning at page 72)start by stating that the scheme is offered to employees 'as an enhanced car benefit in lieu of the traditional company car and is managed by Opticar Ltd'. They are detailed documents, dealing among other matters with finance. Under the heading 'Early Termination' (page 98), employees are told:

'Should you leave the employment of SFI Group and wish to terminate the agreement, you will be able to reduce the outstanding finance balance by utilising the Early Termination insurance... If for any reason, the Early Termination insurance is insufficient to pay off the finance balance, Opticar will work with you to eradicate or minimise any shortfall. This may include retailing the vehicle or helping you sell it privately.'

However, this scheme also states that employees entering into it could not arrange their own finance; all cars were to be financed by way of a loan agreement (personal contract purchase) between the driver and the finance company.

17. Mrs Jones, Ms O'Connor and Ms Douglas each joined the ECO scheme and their point of contact with Opticar was Mr Hire of Opticar. Each Claimant also undertook the early termination insurance, which was provided by Insure Online. As found above, the Scheme did not allow employees any choice of insurer. SFI Group's Scheme Rules (referred to above) stated the maximum cover for GAP Insurance, and also the maximum for early termination (£5,000), which cover included becoming 'involuntarily unemployed' (page 72).

18. Each Claimant was made redundant on 30 September 2005. There had 'been' meetings about the situation: Ms Roddick, the Respondent's HR director, chaired the first employee forum on 9 August 2005, after which written questions and answers were produced (pages 164 to 175); in this document, the Respondent stated that the ECO car scheme would be looked at. Following questions about notice and pay in lieu of notice, Ms Roddick discussed that with Ms Scott. Ms Scott held individual meetings with each of the Claimants: with Mrs Jones and Ms Douglas on 17 August and with Ms O'Connor on 15 August. At each of these meetings, Ms Scott confirmed the three car options: each Claimant could return the car to Opticar and walk away and the insurances would pay out with no personal financial loss; each could keep her car and continue to pay the monthly repayments (of course, the Respondent's contributions would cease); or each could try to negotiate alternative arrangements with Opticar. Redundancy payments and other related matters were discussed at a further employee forum meeting held by Ms Roddick on 23 August 2005; the Respondent's redundancy payments to employees were in fact enhanced. As to notice pay and related matters, following the meeting on 9 August Ms Roddick discussed with Ms Scott the matter of payment of salary in lieu of notice and possible payment in lieu of salary and benefits; it appeared that some employees had contracts entitling them to the latter.

19. The Claimants received letters in early September about redundancy and were made redundant at the end of the month. By letter to Ms Roddick dated 8 December 2005, Ms O'Connor on behalf of all three Claimants complained that they had been given to understand that during their notice periods they would not suffer any financial disadvantages; they had in fact done so, particularly in relation to car insurance, and would also incur 'substantial costs' in disposing of the cars they had had under the ECO scheme. The letter stated that the Claimants would be looking to the Respondent to make good any financial losses resulting from such matters. In her reply dated 9 December, Ms Roddick stated her view that neither SFI nor the Respondent had any liability in respect of an employee disposing of his or her car prior to the end of the contract, and that the early termination insurance policy was between Ms O'Connor and the insurance company. By letter dated 12 December to Ms Roddick, Ms O'Connor said she have believed that the Respondent was 'under a contractual obligation to take back the vehicles', which the Respondent had now breached. She referred to the other two Claimants in that letter. There were further communications between the Claimants and Ms Roddick, who invited them to a grievance hearing on 10 February 2006. By letter to Ms O'Connor dated 15 March (page 226 of RI), Ms Roddick referred to that hearing and stated that legal advice to the Respondent was that while the insurance company could not unilaterally change the terms and conditions of the Claimants policy, the liability rested with the insurers, not with the Respondent - the Respondent was not responsible for compensating the Claimants should the terms of the policy be breached by the insurers.

20. The Claimants appealed against the Respondent's decision and there was a hearing on 7 April 2006; this was adjourned for further investigation and was reconvened on 15 May; however, as preferred by the Claimants the outcome of the grievance hearing was given in writing, by letter dated 15 May 2006 from Ms C Underwood, the Respondent's sales and marketing director. That letter stated that Ms Underwood's understanding was that the maximum payout on the insurance policy would be £5000 for early termination, but that the insurers were now not prepared to pay out for finance or other additional costs incurred. Ms Underwood stated in the letter that she rejected the grievance, as she did not accept that the, Respondent could be held liable for compensating the Claimants as the insurance company had breached the terms of their policy. The Claimants incurred trouble and expense in dealing with their cars after they had been made redundant, and continued to raise their concerns about the matter."

The Employment Tribunal Judgment: Conclusions

These are set out at paragraphs 22-26. For the purposes of this Judgment, the relevant paragraphs are 23-26. I set them out in full:

"23. It was not disputed, and I accepted, that each Claimant had a contract of employment with the Respondent in identical terms, consisting of a written document headed 'Contract of Employment' (Ms O'Connor's is at pages 109 to 127 of R1) and of the terms set out in the letter of offer each received (Mrs Jones' is at pages 128 to 132). The letter sets out what it refers to as 'terms and conditions' in great detail and most precisely: I consider that it must have been intended by both parties to have formed part of the contract of employment, and did so on acceptance of the job offer by each Claimant.

24. The letter contains fuller car arrangements than the written Contract, which deals merely with company cars. It gives the employee entitlement to join the employer's ECO car scheme, and states that details are given to the employee (it also states that on termination of employment, the car should immediately be delivered back to the employer). The details appear in lengthy Opticar documents, which make it clear that at the end of the contract between the employee and Opticar (that is, at the end of the contract of between two and four years - page 98 of R1), one option for the employee was to return the car to Opticar and 'walk away' — having of course paid off everything owing in respect of the car. To cover any outstanding finance balance in the event of termination of employment prior to the ending of the car contract, there were in place 'early termination' arrangements for insurance to cover the shortfall. It was that to which Ms Scott was referring when reassuring the Claimants: both she and the Claimants assumed, understandably, that there would be no financial 'loss to the Claimants on giving up their cars when made redundant, because any shortfall (that is, potential loss) would be covered and made up by the insurers. None of them had in mind that there might be difficulties with the insurers. Although the Opticar documents mentioned the possibility of the Early Termination insurance being insufficient in a minority of cases (page 98), those 'rare' circumstances were identified (page '96)' and appear not to apply in this case. The insurance terms and conditions (pages 70, 71 - 'Benefits) clearly cover unemployment.

25. The ECO car scheme was in my view clearly a seamless arrangement, and intended to be so. Once an employee chose the ECO scheme, he or she was obliged to enter into specified arrangements for choosing the car, arranging finance and entering into the insurance arrangements. The employee could not pick and chose: failure to make all the arrangements and to enter into the specified contracts with Opticar and with the insurers would nullify the whole scheme for that employee. My conclusion is that the package formed part of the contractual arrangements between employer and employee: the employee had an entitlement to take up the employer's offer of entry to the ECO Scheme, and on taking it up was obliged to enter into set contractual arrangements with Opticar and with the insurers, that is, to contract with third parties. The contract between employer and employee contemplated such arrangements, and no doubt contemplated that they would, run smoothly: default not by the employee but in the operation of the 'package constitutes in my opinion a breach of contract by the employer (which may, of course, be able to pursue its own contractual remedies against others). The breach in the case of each Claimant leads to the right to payment of damages in the amount required to restore her financially to the position in which she would have been had the obligations arising under the contract of employment been performed.

26. The question of a possible breach by the Respondent of the mutual duty of trust and confidence implicit in every contract of employment was not raised in this case and I have not considered it further."

The Notice of Appeal

5. The Notice of Appeal is succinct and supported by written submissions: Appeal Bundle pages 13-18. In the appeal hearing itself Ms McKie has argued both grounds of appeal together. As the grounds of appeal are short, I will set them out in full:

"The employment tribunal erred in concluding as it did, in paragraph 25 of the Decision, that the Appellant had acted in breach of the contracts of employment of the Respondents.

The employment tribunal erred in the following ways:

First Ground

It did not apply the law relating to contract correctly. It appears to have concluded that there is an express term in the contracts of employment relating to an insurance scheme which did not exist. In the alternative, it appears to have allowed the implication of a term into the contracts of employment of the Respondents relating to the running of an insurance scheme provided by a third party. Such a term could not or should not have been implied as a matter of law.

Second Ground

The employment tribunal has failed to provide adequate reasons for its conclusion in paragraph 25. The tribunal does not adequately explain what the contractual term is which the Appellant is said to have breached, the grounds upon which it concludes that such a term exists; how it is said that the Appellant breached that term and when it is said to have breached that term."

6. In support of that Notice of Appeal, Ms McKie referred me to a number of passages in the contractual documents set out in the Appeal Bundle. I will refer to them later in this Judgment. The Respondents separately argued that the reasoning in paragraph 25 of the Chairman's Judgment was sufficient and it was not necessary for her to use the terms "express" or "implied" in order for her to reach her conclusion.
7. Reliance was also placed on the contractual documents. So far as the second ground of appeal is concerned, the Respondents argued that the decision was compliant with Meek v City of Birmingham District Council [1987] IRLR 250 and Rule 30(6) of the Employment Tribunals (Constitution and Rules of Procedure Regulations) 2004 (SI 2004/1861). See also Mr M Fisher v Hoopoe Finance Ltd (UKEAT/0043/05/LA) at paragraphs 19-20.

The Employment Appeal Tribunal Decision

8. The law relating to the construction of express terms of a contract are usefully summarised in Chapter 12 of Chitty on Contracts (29^th Edition, 2004). The law relating to implied terms is usefully contained in Chapter 13 of the same work. I deal with each in turn.

Express Term

The employees did not receive payouts under the Early Termination Insurance (ETI) scheme because of a decision by the insurance company, Insure Online (underwritten by Haven Insurance Company Ltd) not to pay. Neither company is an associated company of the Laurel Pub Company.

9. There is no express term in the contracts of employment of the Respondents that they would receive the benefits of a shortfall payment under the ETI scheme, nor that the Appellant would make up any shortfall not covered by the insurance company.
10. The contracts of employment giving the employees the entitlement to use a company car do not refer to the benefit of the employee car purchase scheme ("ECO"): see for example Mrs O'Connor's contract of employment: EAT Bundle page 135. The Appellant's Handbook refers to the ECO scheme which is contractual in nature. The Handbook is that of the SFI Group, which later became the Appellant. The relevant passage in the Handbook is at EAT Bundle page 83.
11. Under the terms of the ECO scheme, if the employees take up the entitlement they must use a "one stop shop", namely Opticar, to arrange the finance, maintenance and insurance of the car. This is provided by clause 2 of the Handbook: EAT Bundle page 84. Clause 2 goes on to say that the employee "will be provided with… Early Termination (ETI)… Insurance."
12. The Appellant's Scheme Rules and Scheme Guide provide details to the employees about the ECO scheme. The relevant clause is set out in paragraph 16 of the Employment Tribunal Reasons: EAT Bundle page 123. I find it impossible to construe that clause as an express term of the Respondents' contracts of employment. What the clause does is state that the Respondents will be able to use the benefit of the insurance to provide the shortfall. It goes on to say that if the insurance payout is insufficient (and, by implication, if the insurance company do not pay out at all) then Opticar will work with the Respondent to reduce or eradicate any such shortfall. It does no more than this.
13. The Opticar Policy Book sets out the "Terms and Conditions" for ETI. They are referred to in the Employment Tribunal Reasons, paragraph 14-15: EAT Bundle pages 87-96. The Employment Tribunal placed particular emphasis on a clause in that Policy Book headed "Benefits": paragraph 15 of the Employment Tribunal Reasons, EAT Bundle pages 5-6. However, the "We" is the named insurance company, i.e. Haven Insurance Company Ltd, and not Opticar Ltd or the Appellant. Although this clause appears in the Opticar Policy Book, it is clearly part of the terms of the insurance company, as can be seen from the first paragraph in the first column: EAT Bundle page 95. It is also clear that the contract is made with Haven Insurance Company Ltd as can be seen from the last three paragraphs of the third column and the Definitions section, EAT Bundle page 95. These matters appear to have escaped the notice of the Employment Tribunal.
14. The Respondents signed agreements with Opticar for the provision of the vehicles: EAT Bundle page 163 and signed agreements with the credit company (GE Money) to provide the finance: EAT Bundle page 165.
15. From this analysis of the facts, I find the Employment Tribunal's conclusion in paragraph 25 of its Judgment wholly unclear and wrong. It is not clear whether the Employment Tribunal found there was an express term of the contract of employment which required the Appellant to pay any shortfall in ETI to the Respondents. If such an express term was found by the Employment Tribunal, then I would have expected it to be specifically identified and set out in the Judgment. Nowhere does such an express term appear. Furthermore, if there was such an express term I would expect the Employment Tribunal to say precisely what the express term actually means. In my judgment, no such express term appears in this contract of employment.

Implied term

16. As Ms McKie points out, the question of an implied term simply does not appear anywhere in the Tribunal's Judgment. The Tribunal does not even ask itself this question. Contractual arrangements with third parties to provide insurance and benefits for employees are becoming increasingly common. In this case there is nothing unusual about the Appellant using Opticar as a means of providing such benefits for its employees.
17. While there is no reason why the Employment Tribunal could not imply a term to justify its conclusion, no analysis of the law relating to the implication of such a term, e.g. by the tests of the officious bystander, custom and practice, and business efficacy. In my judgment none of these apply in the present case, and in any event there was no attempt by the Employment Tribunal to conduct this analysis.
18. Although the officious bystander test might be applicable on the facts of this case, the current case law does not support the implication of such a term. Where an employer uses insurance policies for the benefit of employees there is an implied duty on the part of the employer to use its best endeavours to ensure that the insurance company gives proper consideration to the employees' claims: Marlow v East Thames Housing Group Ltd [2002] IRLR 798. In Brompton v AOC International Ltd [1997] IRLR 639 the Court of Appeal found that an employer was required to pay the insurance shortfall to the employees as debt. However, this decision was on the basis that the insurance company had misread the terms and conditions of the insurance policy and refused to pay when it should have done. The implication of the implied term was based on mutual trust and confidence between employer and employee. However, in the present case, the Respondents did not raise the question of a mutual duty of trust and confidence and the Employment Tribunal therefore did not consider it: Employment Tribunal Judgment paragraph 26: EAT Bundle page 9. Furthermore, there were no findings by the Employment Tribunal in the present case that the insurance company had misread the terms and conditions of the contract of insurance and refused to pay out when it should have done. Indeed, when I specifically asked the parties the question as to why the insurance company had not paid out in the present case no-one was able to give me any information as to why that had happened.
19. For these reasons I am satisfied that the Employment Tribunal has made two errors of law. First, there is a complete failure of analysis as to the legal basis upon which the Employment Tribunal has found, in paragraph 25 of its Reasons, that there was a contractual term requiring the Appellant to pay any shortfall under the ETI. Second, there is a failure of reasoning to comply with Meek. In view of the fact that I am certain, on the facts as found by the Employment Tribunal, that no question of an express or implied term as contended for by the Respondents exists in this case, I substitute my decision for that of the Employment Tribunal and allow this appeal without remission.

The Cross-Appeal

20. Mrs O'Connor appeals against the decision of the Employment Tribunal concerning the Appellant's counter-claim in the Employment Tribunal. This concerned overpayment to Mrs O'Connor of two weeks' wages, which the Employment Tribunal ordered should be repaid. The matter is dealt with in paragraph 27 of the Employment Tribunal Judgment in the following way:

"27 Counterclaims. The Respondent's solicitors set these out clearly in their letter of 1 May 2006 (page 38 of R1); they represent alleged overpayments of two weeks' contractual benefits. There was no real dispute about the figures or legal argument. The Contract of Employment (page 109) states that three months' notice would be given after six months' service. If the contract between the Respondent and each Claimant was that on termination of employment each would receive thirteen weeks' notice and payment of thirteen weeks' agreed benefits, then if each Claimant worked for two weeks of that period (with pay and benefits), she would be entitled to another eleven weeks' worth of pay and benefits. If each has been paid benefits for another thirteen weeks, presumably by mistake, there is clearly an overpayment of two weeks' benefits."

21. Mrs O'Connor cross-appeals against this decision and relies on the differing figures as a ground for the cross-appeal. However, these sums were not disputed at the Employment Tribunal hearing and, in my judgment, it is too late for Mrs O'Connor to raise this point now: Kumchyk v Derby County Council [1978] ICR 1116. Furthermore, I note that the Employment Tribunal itself said in paragraph 27 of its Reasons: "There was no real dispute about the figures or legal argument." The amount of its overpayment was found at the Remedies hearing to be £344.75: Remedies hearing Judgment paragraph 7: EAT Bundle page 75.
22. There is no cross-appeal by either of the other two Respondents.
23. For these reasons the cross-appeal is dismissed.