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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Learning & Skills Council v. Barfoot & Ors [2003] UKEAT 0621_03_2011 (20 November 2003) URL: https://www.bailii.org/uk/cases/UKEAT/2003/0621_03_2011.html Cite as: [2003] UKEAT 0621_03_2011, [2003] UKEAT 621_3_2011 |
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At the Tribunal | |
On 31 October 2003 | |
Before
THE HONOURABLE MR JUSTICE KEITH
MR A HARRIS
MR A E R MANNERS
APPELLANT | |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
Revised
For the Appellant | MR S FLETCHER (of Counsel) Instructed By: Messrs Field Fisher Waterhouse Solicitors 35 Vine Street London EC3N 2AA |
For the Respondents | MR A BAILEY (of Counsel) Instructed By: Wortley Redmayne Kershaw Stonebridge House Stonebridge Walk High Street Chelmsford Essex CM1 1EY |
THE HONOURABLE MR JUSTICE KEITH:
Introduction
The facts
"It has been agreed that the Terms and Conditions of your employment should be varied so as to include an incentive bonus, the details of which are set out below:
- The bonus is based on achievement of the following IiP…..Targets."
The letters then set out the targets to be achieved and the levels of the bonuses, and continued (so far as is material):
- [These bonuses] will be paid upon agreement by GOL that the target has been achieved …..
- The bonus structure will be reviewed in March 1999 and in any event will cease at the end of the year 2000 or if you move to another post within LETEC.
- While you are subject to this arrangement, you will not be eligible in addition for any payments under the discretionary company bonus scheme.
- To receive the bonuses, you must still be employed by LETEC at the time of payment."
The Employment Tribunal appears to have assumed that letters in identical terms were sent to the other members of the IiP team. We have made the same assumption. Evidence was given in the Employment Tribunal about why the "bonus structure" was to "cease at the end of the year 2000", but the Employment Tribunal did not mention that evidence or make any findings about it. It will be necessary to return to that evidence in due course.
"As a member of the IiP team, under present arrangements, you have a separate bonus scheme in place until 31 March 2000. At that time, new arrangements will be required. These will be such that you are not disadvantaged in comparison with employees on the staff bonus scheme outlined above."
We make two comments about those letters. First, the reference to "the staff bonus scheme outlined above" was a reference to the discretionary bonus scheme still in place for other members of staff. Secondly, the Employment Tribunal appears to have assumed that letters in identical terms were sent to the other members of the IiP team. We have again made the same assumption.
"The IiP bonus arrangements relating to you for this year are as follows. These are non-pensionable:
£2,000 (gross) paid in September 2000, subject to achievement of mid-year target of 32 recognitions.
£2,000 (gross) paid in March 2001, subject to achievement of end-year target of 135 recognitions.
These bonuses will be paid upon agreement by GOL that the targets have been achieved. To receive the bonuses, you must still be employed by LETEC at the time of payment. You will not be eligible in addition for any payments under the discretionary company bonus scheme during 2000–2001, apart from a pro-rata amount for the period 1 January to 31 March 2000."
The letter was signed by the employee to whom it was sent, who thereby accepted its terms. Once again, the Employment Tribunal appears to have assumed that letters in identical terms were sent to other members of the IiP team, and that these terms were accepted by them. We have made the same assumption.
The issues for the Employment Tribunal
The Employment Tribunal's reasoning
The criticisms of the Employment Tribunal's approach
"I must say that I had thought that it is now well settled that it is not legitimate to use as an aid in the construction of the contract anything which the parties said or did after it was made. Otherwise one might have the result that a contract meant one thing the day it was signed, but by reason of subsequent events meant something different in a month or a year later."
"The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax…..The 'rule' that words should be given their 'natural and ordinary meaning' reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had."
We think that if the words "bonus structure" bore the meaning which the Employment Tribunal found, the parties would have had attributed to them an intention which they plainly did not have.
The variation or revocation of the bonus scheme
"…..you have a separate bonus scheme in place until 31 March 2000. At that time, new arrangements will be required." (Emphasis supplied)
The language of that letter rather suggests that at that stage LETEC was contemplating the revocation of the bonus scheme at the end of March 2000 and replacing it with another scheme (no less advantageous than the discretionary bonus scheme which continued to apply to other members of staff).
Conclusion