An interesting discussion has emerged on the web about employment issues arising from the sudden closure by News International of the News of the World.
It is a central tenet of employment law that contract terms can be both express (i.e. written in to a contract) and implied. Some key duties, such as a duty of faithful service, are implied into all contracts of employment, whether or not a written contact exists. Continue reading
A Ms. O’Farrell worked for Publicis Consultants UK Ltd. Her contract provided for three months’ notice. She was made redundant in May 2009 and was provided with statutory redundancy pay and holiday pay. Her dismissal letter also said that she would receive an ex-gratia payment equivalent to three months’ salary (£20,625) free of Tax and NI deductions. Continue reading
The general purpose of damages and compensation in civil cases in UK law is (so far as money can do so) to put the winner of a case as nearly as possible in the position he would have been if he had not been wronged. Hence compensation is generally unlimited, although there are, of course, statutory limits in certain cases, such as the cap on the compensatory award that an employment tribunal can order in unfair dismissal cases (currently £68,400).
The Court of Appeal has recently given new guidance on how courts and tribunals should approach two particular issues which can arise in the calculation of compensation in employment cases Continue reading
Strange as it might sound, it is possible for one’s status as an employee to end in circumstances that do not terminate one’s contract of employment. This was the thorny issue in Société Générale London Branch v Geys, decided by the Court of Appeal on 30 March 2011.
In that case, it was crucial to establish upon which of three potential dates Mr Geys’s contract ended, because it was only if it lasted until the latest possible date in January 2008 that a contractual entitlement to a huge bonus (the substance of his claim) could arise.
Société Générale had terminated his employment at a meeting on 29 November 2007, but Mr Geys had written back indicating that he was affirming his contract. Nonetheless, Société Générale made a payment in lieu of notice (in line with his contract) on 18 December 2007, and formally notified him of this by letter on 6 January 2008. The Court of Appeal overturned a previous ruling by the High Court and found that Mr Geys’s contract of employment ended on 18th December – thus he had no entitlement to the extra bonuses.
From Mr Geys’s point of view that, no doubt, was the most interesting (if disappointing) part of the judgment. However, of more general interest is what happened on 29 November 2007, because it highlights the conflict between “pure contract law” and statutory concepts of dismissal which underlie other claims such as unfair dismissal.
There was doubtless a repudiatory breach of contract by Société Générale – they made clear that Mr Geys’s no longer had a job. Yet such a unilateral breach cannot terminate a contract if – as happened here – the other party refuses to accept it. Hence the contract must continue, until ended in accordance with its provisions. However, Mr Geys’s status as an employee was clearly ended on that date – so for statutory purposes, it would be the Effective Date of Termination (EDT).
At first glance this is hard to get one’s head around – how can a contract of employment exist when (arguably) the essential mutuality of obligation has gone and one party is no longer an “employee”? Understandably, perhaps, the Court of Appeal wants the Supreme Court to consider whether an unaccepted repudiatory breach should, in fact, be able to terminate the contract.
However, what if the Supreme Court follows this route? The whole doctrine of constructive dismissal (which is a contractual concept which can be the basis for statutory unfair dismissal) relies on an employee promptly resigning in acceptance of a fundamental breach of contract by an employer. Where does it leave the employer’s defence that the employee affirmed the contract if the contract can be terminated by that unilateral breach alone? Will the EDT (so important for strict time limits) be at the date of resignation (as now) or the date of the breach?
The current situation is the product of conflicting legal concepts – but removing that conflict could generate just as many problems. In a case in which the date of dismissal, constructive or actual, is an important consideration proper resolution of the point could be vital, thus underlining the need for expert legal advice in any such situation.
As is well known there is no general rule that an employer must give a reference for an (ex-)employee, but if he does give one he must take reasonable care to ensure that it is fair. A case at the end of September in the Employment Appeal Tribunal shows how important it can be to take care when giving a reference for an ex-employee.
Solicitor Ms Bullimore was employed by a firm of solicitors from 1999 to 2004. After she left she claimed unfair dismissal and sex discrimination and an “out of court” settlement was agreed. She then got a job with another law firm, the first one providing a “bland reference”.
Some four years later she was made redundant and was offered a job by a third firm of solicitors, subject to receipt of satisfactory references. The first firm provided a reference but this time included a number of negative comments about Ms Bullimore. Specifically the reference noted that she had brought employment tribunal proceedings against the first firm. It also referred to her poor relationship with the partners and said that “she could on occasion be inflexible as to her opinions”. As a result of this reference the third firm changed its job offer to include a six month probationary period. Ms Bullimore was not happy with this and the resulting impasse led effectively to the job offer being withdrawn.
Ms Bullimore then sued both firms of solicitors and the individual partner in the first firm who had given the reference. She settled her claim against the firm which had withdrawn its job offer (for a substantial sum – £42,500) but her claim against the first firm, and the individual partner who had provided the reference, went to an employment tribunal. She won, essentially on the basis that she had been victimised for having brought a sex discrimination claim and the tribunal awarded her £7,500 for injury to feelings.
Ms Bullimore was not satisfied with the £7,500 and appealed to the EAT. Although the EAT refused to increase the award for injury to feelings it referred the case back to the employment tribunal to consider an award for loss of earnings, rejecting the first firm of solicitor’s argument that the damage was too “remote” for them to be liable. The EAT stated that, as a matter of principle, “When an adverse reference, given for an illegitimate reason, leads to an employer deciding not to make, or to withdraw, an offer to a candidate it is hard to see why that consequence should be regarded as too remote to attract compensation from the giver of the reference …”.
There was one crumb of comfort for employers in that the President of the EAT noted that the original employment tribunal’s conclusion “might, without reference to the detailed facts, seems rather harsh: the position of employers who are asked for references for employees with whom they have fallen out is a very delicate one…”. Nevertheless the overriding message for employers is to take great care when providing a reference for an ex-employee.
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Mr Edwards was a consultant surgeon working for the Chesterfield NHS Trust. He was dismissed for gross misconduct and subsequently was unable to find employment within the NHS.
Rather than claiming unfair dismissal at an employment tribunal, where compensation is limited by statute (currently to an absolute maximum of £76,700), he brought a breach of contract claim in the High Court where there is no limit on the amount which can be awarded. He claimed a huge amount, a little under £4.3m including a sum in excess of £3.8 million for loss of future earnings.
He was able to go to the High Court rather than an employment tribunal because he was able to show that the Trust was in breach of contract. It had failed to follow the disciplinary procedures which were set out in his employment contract. In particular his employment contract provided that a person with legal qualifications should have chaired the panel which considered his case, that a clinician of the same medical discipline as himself should have been on the panel and that he should have been allowed legal representation at the hearing. The disciplinary procedure operated by the Trust in his case suffered from defects in all those areas. He claimed that if the procedure had been handled correctly, in accordance with his contract, no finding of misconduct would have been made and he would not have been dismissed.
At first instance he won a pyrrhic victory (the Court said his claim could proceed but intially ruled that damages would be limited to loss of earnings for the contractual three months’ notice period, later varied to include damages in respect of the period during which he would have remained employed while a disciplinary procedure which complied with the terms of his contract ran its course).
He has now won a more substantial victory in the Court of Appeal. The Court of Appeal has agreed with him that damages should include compensation for loss of the chance of staying in employment.
That is quite significant. It means that an employee can, in appropriate cases, be eligible to win damages far in excess of the amount an employment tribunal can award for unfair dismissal. However this will not be an open door to huge claims. Thus in a misconduct case the employee would have to show that he had been dismissed after a disciplinary hearing conducted in a way which was seriously out of line with his contractual entitlement and that there was a genuine chance that he would not have been dismissed had the hearing been properly conducted.
No doubt in the real world it is unlikely that these conditions would often be fulfilled but even so this is a salutary warning to employers. Advice should be taken from us in good time and always before disciplinary proceedings take place, to ensure that the risk of “getting it wrong” is minimised.
