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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Darby & Anor v. The Law Society of England and Wales [2008] UKEAT 0447_07_1408 (14 August 2008) URL: https://www.bailii.org/uk/cases/UKEAT/2008/0447_07_1408.html Cite as: [2008] UKEAT 447_7_1408, [2008] UKEAT 0447_07_1408 |
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At the Tribunal | |
On 2 May 2008 | |
Before
MR RECORDER LUBA QC
MS K BILGAN
MRS M McARTHUR BA FCIPD
(2) MS B STILL |
APPELLANTS |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
For the Appellant | MR J LADDIE (of Counsel) Instructed by: Messrs AMC Law Solicitors 25 White Delves Wellingborough Northants NN8 5XW |
For the Respondent | MR A SOLOMON (of Counsel) Instructed by: Messrs Russell Cooke Solicitors 2 Putney Hill Putney London SW15 6AB |
SUMMARY
UNFAIR DISMISSAL: Dismissal/ambiguous resignation
Issue as to whether employees were "dismissed".
The employer resolved to remove the employees' contractual entitlement to company-cars. Attempts to achieve consensual variation of the contracts to that effect were followed by letters referring to termination of employment and re-engagement. The employees then signed new terms without the previous company-car provisions.
On the issue of whether there had been any "dismissals", an Employment Tribunal found that the new terms had been achieved by agreement to vary rather than termination.
On appeal, the Employment Appeal Tribunal was satisfied that the only proper construction of the letters was that the employees had been dismissed by notice in writing and then re-engaged on less favourable terms.
.
MR RECORDER LUBA QC
Introduction
Background facts
The case before the Employment Tribunal
The Employment Tribunal's decision
"The respondent's witnesses confirmed that their understanding of the position generally was that if the respondent could not persuade staff to agree to variations to their contracts to remove any anomalies (including the company car benefit provided to the claimants), the way to achieve the desired result of removing the anomaly concerned was to dismiss those staff on notice and re-engage them on new terms and conditions of employment."
"It was common ground that the understanding of all involved, was that the above process was the legally correct approach to follow in order to remove the company car benefit."
The relevant law
"An employee is dismissed by his employer if and, subject to subsection (2)…, only if
(a) the contract under which he is employed is terminated by the employer whether with or without notice."
In the instant case, the claim was that the contract of employment had been terminated by the employer with notice given in writing. In those circumstances it is important to note the significant recent shift in emphasis by the appellate courts as to the correct construction and interpretation of unilaterally given notices.
"The construction of the notices had to be approached objectively and the question was how a reasonable recipient would have understood them bearing in mind their context."
That case was concerned with unilateral notices given in the context of a relationship of landlord and tenant but we see no reason why those principles should not apply to unilateral notices given in the context of an employer and employee relationship. The contrary was not suggested to us.
The correct approach to the issue
"As regards the question of dismissal, we have analysed the correspondence between the parties very carefully, particularly the correspondence from the respondent. We think that it was common ground between the representatives that the legal analysis of whether there was a dismissal or not would come down to our interpretation of that correspondence."
"We were satisfied that from the correspondence, and from the negotiations between the parties …"
That language would suggest that in the construction of the relevant notices the Tribunal had regard to earlier negotiations. Lord Hoffman in the ICS case specifically stated (at principle 3) that "the law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent". To that extent therefore the Tribunal must have erred in having regard to the antecedent negotiations in their exercise of construing the relevant documents. Accordingly, in our judgment the Respondent before us was wrong to contend at paragraph 5 of its skeleton argument that:
"The Tribunal did not err in its interpretation of the negotiations between the parties in reaching its conclusion."
The relevant documents
"1 I am aware that there may have been some confusion with regard to the contents of my previous letters to you dated 20th October 2005 and 23rd December 2005 which set out the relevant findings of the Equal Pay Audit and the Society's proposals on how to incorporate these recommendations into your terms of employment. This letter aims to address any uncertainty and clearly set out the position concerning your future employment with the Society.
2 I thought it may be useful to recap on the background to the current situation. As we are all aware the Society has undertaken a comprehensive equal pay audit (EPA) in order to ensure that our pay and reward policies and procedures are fair and consistent and are not discriminatory. The key findings of the equal pay audit report was that our reward policies and procedures are not discriminatory. However, the report did highlight that some jobs appeared to be either over graded or undergraded. In addition it also identified certain anomalies and inconsistencies. Most of these were documented in the report and action plan. All staff were advised of the outcomes of the EPA in October/November.
3 In cases involving a variation to current terms and conditions of employment staff were served with formal notice of 90 days consultation and also notice of the termination of their existing contractual terms with the offer to agree to the new terms of employment incorporating the variation. The Society was mindful that this was a difficult time for certain staff and in order to ensure that all staff were treated fairly and consistently and also to give staff sufficient opportunity to consider the information provided by the Society both the consultation and notice periods were extended to 16 March 2006.
4 Since commencing the consultation and notice periods there have been meetings with individual members of staff as well as numerous email exchanges and requests for information. We have also discussed specific issues at the JCC meetings.
5 However it would appear that the process of ensuring any variation was not imposed unilaterally has led to confusion for some staff. Given this confusion, the Society has decided that new notices of termination will be issued to relevant staff to expire on 30th April, with the offer of re-engagement commencing 1st May 2006 on the new terms incorporating the variation and with all other terms and conditions remaining unchanged.
6 The purpose of this letter is to give you notice of termination of your present terms of employment to expire on 30th April 2006, rather than on 16th March 2006, but that you will have the option to agree to re-engage on new contractual terms of employment commencing 1 May 2006 incorporating the withdrawal of your company car as it is not applicable to your job role/grade. All other terms and conditions of employment will remain the same.
7 I would confirm that the Society has decided to offer you the option to continue to have the use of a lease car up to 31 December 2008 as an alternative to taking a car cash allowance on the expiry of your existing car lease if this occurs before 31 December 2008. On expiry of the existing lease before 31 December 2008 you will have the option to extend the lease on the existing vehicle, enter into another short term lease on another vehicle (subject to available lease arrangements) or receive the cash allowance. The availability of these options is subject to your signed acceptance of the new terms and conditions of employment incorporating the variation. In all cases the car and car cash allowance will cease on 31 December 2008.
8 This notice of termination of your present terms and conditions and hence employment supersedes previous notice issued in letters dated 20th October 2005 and 23rd December 2005.
9 You will be issued with new terms and conditions of employment, ie existing terms and conditions but incorporating the variation, shortly. You will then have the option to sign the new terms and conditions of employment. If you agree to the new terms and conditions of employment you will be required to return the duplicate copy of this letter together with a copy of the new terms and conditions of your employment, duly signed, on or before midday on Friday 28th April 2008. If the signed contract is not returned on or before midday on 28th April 2006, the present contract of employment will be terminated on 30th April.
10 I would remind you that although you are required to accept the new terms and conditions of employment on or before 28 April 2006 it has been agreed that most of the outcomes of the EPA will not be implemented until 1 January 2009.
11 I trust that any confusion has now been clarified. I do hope that you will accept the new terms and conditions of employment and I look forward to your continuing contribution to the success of the Law Society."
We have taken the liberty of adding paragraph numbers to that letter in order to make sense of the various submissions we have received. The letter had attached to it a tear off slip with the following wording:
"I agree to the terms and conditions of employment commencing on 1 May 2006 and incorporating the variation above with all other terms and conditions of employment remaining unchanged.
Signed:_________________________________ Date ______________________"
"A further letter was issued on 31st January 2006 which stated the purpose of this letter was to give notice of termination of your present terms of employment to expire on 30 April 2006 rather than 16 March 2006. This was issued with 90 Days notice. Further, the Law Society does not propose to remove the car benefit at the end of the consultation period. It will be removed in three years' time, 31 December 2008."
Following that letter the Society wrote again on 1 March 2006 in the following terms:
"1. Further to the letter of the 31 January 2006 which provided you with notice of termination of your present terms and conditions of employment with effect from 30 April 2006 please find enclosed the new terms and conditions of employment. If accepted by you these new terms and conditions of employment will apply with effect from 1 May 2006.
2. You have been advised of the options available to you in respect of the availability of your company car until 31 December 2008. If you have not already done so you will need to advise your HR Business Partner, Linda Turner, of your preferred option.
3. Given that you are progressing this matter through the grievance procedure this satisfies your statutory right of appeal against the decision to terminate your existing terms and conditions of employment. However, should you wish to meet to discuss the contents of this letter please notify Linda Turner within 7 working days of the date of this letter.
4. If you agree to the new terms and conditions of employment you will be required to return the duplicate copy of this letter, together with a copy of the new terms and conditions of your employment, duly signed, on or before midday on Friday 28th April 2006. If the signed contract is not returned on or before midday on 28th April 2006, the present contract of employment will be terminated on 30th April 2006. The Society would advise that it will only accept signed copies with no amendments, conditions or comments attached, including reservation of legal rights.
5. On behalf of the Society, I would hope that you find this offer of re-engagement acceptable and that you will continue to work with the Society as we move forward with new and exciting opportunities."
"…We thought that it was apparent from the later correspondence that the respondent had not moved from the position where it was seeking an agreed variation to a position where it intended to dismiss the claimants and re-engage them in any event. We concluded that it was apparent that the respondent had put two options on the table: the first was that the contracts could be varied by agreement in which case there would be no termination; the second, which would incur in the event that the claimants did not agree to the variation, was that they would be dismissed on notice with an offer of re-engagement. We did not accept that either claimant at any point thought that if they failed to sign the varied terms and conditions of employment by midday on 10 May 2006 they would have no job at all. We think that they knew quite well that they would be offered re-engagement. It was unfortunate that the later letters referred overall to the offer as being an offer of "re-engagement" when it was plain that that in fact re-engagement was only being offered in the event that variation could not be achieved by agreement. We were satisfied from the correspondence, and from the negotiations between the parties, the claimants would both have been well aware that if they were to sign the new terms and conditions their employment would not come to an end. We did not think that the fact that the respondents had made reference to the varied terms and conditions of employment as being "new" terms and conditions of employment meant that re-engagement was being proposed whichever option the claimants chose. It was apparent that re-engagement was the fallback position in the event that variation was not agreed. It seemed to us that perhaps the reason that the claimants' representative had some difficulty identifying the point when the claimants' employment was supposed to have terminated, was because in the event that the claimants signed the contract prior to the midday deadline, as in fact they did, in reality there was no termination."
The scope of the present appeal
Conclusion