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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Edwards v Chesterfield Royal Hospital NHS Foundation Trust  EWCA Civ 571 (26 May 2010)
Cite as:  EWCA Civ 571,  IRLR 702,  1 QB 339,  3 WLR 1285,  ICR 1181,  QB 339,  Med LR 307
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(Mr. Justice Nicol)
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE LLOYD
LORD JUSTICE MOORE-BICK
| MICHAEL STEVEN DELAWAR EDWARDS
|- and -
|CHESTERFIELD ROYAL HOSPITAL
NHS FOUNDATION TRUST
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7404 1424
Official Shorthand Writers to the Court)
Mr. Mark Sutton and Mr. Marcus Pilgerstorfer (instructed by Beachcroft LLP) for the respondent
Hearing dates : 21st and 22nd April 2010
Crown Copyright ©
Lord Justice Moore-Bick :
The nature of the appeal
The basis of the claim
(i) that in matters of personal conduct he would be subject to the hospital's general procedures and that in matters of professional conduct he would be subject to a procedure agreed by the Local Negotiating Committee in respect of medical practitioners;
(ii) that he was accused by the Trust of personal and professional misconduct;
(iii) that because of the nature of the allegations made against him he was contractually entitled to a formal disciplinary hearing by a panel which included a clinician of the same discipline as himself and a legally qualified chairman, before which he would have the benefit of legal representation, if he so wished;
(iv) that the disciplinary hearing which resulted in the findings of misconduct was not conducted in accordance with the terms of his contract of employment because the panel did not include a clinician of the same discipline as himself, nor a legally qualified chairman and because his request to be allowed legal representation was refused;
(v) that following the panel's findings he was dismissed for personal and professional misconduct;
(vi) that if the proceedings had been carried out in accordance with his contract of employment the panel would not have found that he was guilty of personal and professional misconduct and he would not have been dismissed;
(vii) that because he was dismissed on the grounds of personal and professional misconduct (including dishonesty) he has been unable to find comparable alternative employment.
The parties' submissions
The position at common law
"At common law a master is not bound to hear his servant before he dismisses him. He can act unreasonably or capriciously if he so chooses but the dismissal is valid. The servant has no remedy unless the dismissal is in breach of contract and then the servant's only remedy is damages for breach of contract."
Johnson v Unisys
"63. So did the disciplinary procedures constitute express terms of the contract of employment? Perhaps for some purposes they did. But the employee handbook has to be construed against the relevant background and the background which fairly looms over the disciplinary procedure is Part X of the 1996 Act. The whole disciplinary procedure is designed to ensure that an employee is not unfairly dismissed. So the question is whether the provisions about disciplinary procedure which (to use a neutral phrase) applied to Mr Johnson's employment were intended to operate within the scope of the law of unfair dismissal or whether they were intended also to be actionable at common law, giving rise to claims for damages in the ordinary court.
. . .
66. My Lords, given this background to the disciplinary procedures, I find it impossible to believe that Parliament, when it provided in section 3(1) of the 1996 Act that the statement of particulars of employment was to contain a note of any applicable disciplinary rules, or the parties themselves, intended that the inclusion of those rules should give rise to a common law action in damages which would create the means of circumventing the restrictions and limits which Parliament had imposed on compensation for unfair dismissal. The whole of the reasoning which led me to the conclusion that the courts should not imply a term which has this result also in my opinion supports the view that the disciplinary procedures do not do so either. It is I suppose possible that they may have contractual effect in determining whether the employer can dismiss summarily in the sense of not having to give four weeks' notice or payment in lieu. But I do not think that they can have been intended to qualify the employer's common law power to dismiss without cause on giving such notice, or to create contractual duties which are independently actionable."
"Damages for wrongful dismissal are governed not by a special rule applicable to employment contracts but by ordinary principles of contract law: see Mahmud's case, at p 39d";
and in paragraph 44 Lord Hoffmann said:
"As McLachlin J. said in the passage I have quoted, the only loss caused by a wrongful dismissal flows from a failure to give proper notice or make payment in lieu. Therefore, if wrongful dismissal is the only cause of action, nothing can be recovered for mental distress or damage to reputation. On the other hand, if such damage is loss flowing from a breach of another implied term of the contract, Addis's case does not stand in the way. That is why, in Mahmud's case itself, damages were recoverable for financial loss flowing from damage to reputation caused by a breach of the implied term of trust and confidence." (Emphasis added.)
Mr. Edwards' contract of employment
"27 Identifying the boundary of the "Johnson exclusion area", as it has been called, is comparatively straightforward. The statutory code provides remedies for infringement of the statutory right not to be dismissed unfairly. An employee's remedy for unfair dismissal, whether actual or constructive, is the remedy provided by statute. If before his dismissal, whether actual or constructive, an employee has acquired a cause of action at law, for breach of contract or otherwise, that cause of action remains unimpaired by his subsequent unfair dismissal and the statutory rights flowing therefrom. By definition, in law such a cause of action exists independently of the dismissal.
28 In the ordinary course, suspension apart, an employer's failure to act fairly in the steps leading to dismissal does not of itself cause the employee financial loss. The loss arises when the employee is dismissed and it arises by reason of his dismissal. Then the resultant claim for loss falls squarely within the Johnson exclusion area."
"It is common ground . . . that the questions before the House must be resolved within the framework of the contract between Mr Skidmore and the trust. That is so despite the fact that a public body is involved. Prima facie therefore the position is as follows. The trust is entitled to decide what disciplinary route should be followed. That decision must, however, comply with the terms of the contract. If a non-conforming decision is taken and acted upon, there is a breach of contract resulting in the usual remedies. The only escape from this position would be if it could be shown that the parties agreed upon wording in their contract making it clear that the employer's decision would be final thereby excluding the role of the court except, of course, in cases of bad faith or possibly the absence of reasonable grounds for the decision. There is no such provision in the present contract. It does, of course, provide that "It is for the authority to decide under which category a case falls". This provision merely states the obvious: the trust must take the initial decision to commence the appropriate disciplinary procedure. It is, however, quite insufficient to exclude the normal consequences of a failure to follow the agreed contractual procedures. If there has been a breach by the trust in adopting the wrong procedure, Mr Skidmore is entitled to appropriate relief." (Emphasis added.)
"As McLachlin J said in the passage I have quoted, the only loss caused by a wrongful dismissal flows from a failure to give proper notice or make payment in lieu. Therefore, if wrongful dismissal is the only cause of action, nothing can be recovered for mental distress or damage to reputation. On the other hand, if such damage is loss flowing from a breach of another implied term of the contract, Addis's case does not stand in the way. "
Lord Justice Lloyd:
Lord Justice Ward: