Humphrey & Stretton Ltd v Payne [1996] UKEAT 480_95_2103

EAT
Humphrey & Stretton Ltd v Payne
[1996] UKEAT 480_95_2103 · 1996-03-21

JUDGE N BUTTER QC:

This is an appeal by Humphrey & Stretton Ltd in respect of a decision of an Industrial Tribunal held at London (North) on 31 March 1995.The decision of the Tribunal was expressed in this way:
"The unanimous decision of the Tribunal is that the Applicant's dismissal was procedurally unfair.
The Respondent is ordered to pay a basic award of £4,095. No compensatory award will be made in this case for the reasons set out in paragraph 8 hereinafter."For reasons which will be apparent shortly, it is unnecessary for me to set out the facts in much detail.The essential facts are that the Applicant before the Tribunal, Mr Payne, had been employed by Humphrey & Stretton Ltd, from June 1973 to 12 November 1993, according to the reasons given by the Tribunal.In April 1993, he had the misfortune to sustain a serious accident and, after that date, was according to the Tribunal's findings, unable to work. In paragraph 3 of the extended reasons the Tribunal deal with the events of April and June 1993 and in paragraph 4 say:
"4. On 17 September 1993 Mr Payne managed to struggle into the office and he saw Mr Humphrey and Mrs Grant. Again he was told that there was a job available for him but he indicated that he could not obtain invalidity benefit because he had a job. ..."
Later in the paragraph it is said:
" ... Mr Humphrey also made enquiries of the DHSS and confirmed that until he [Mr Payne] was without a job he could not be paid invalidity benefit."
On 15 November, Mrs Grant wrote a letter to Mr Payne in terms which are set out in the extended reasons.There were three issues which required consideration by the Industrial Tribunal. The first is, "Was the contract frustrated by reason of the serious ill health of the Applicant?". The second is, "Was there a dismissal?" and thirdly, "If so, was the dismissal unfair?".So far as the first of those points is concerned, we are told today that the representative of the employers was seeking to address the Tribunal in relation to the question of frustration of contract, but was stopped by the Chairman on the basis that the concept of frustration could not apply in contracts of employment. That point, that is to say that the representative was stopped, was not raised in the Notice of Appeal and accordingly the Chairman's comments have not been asked in relation to it.Some support for what we have been told, however, is to be found in the first two sentences of paragraph 7 of the extended reasons which say:
"7. We reject the argument that the contract was frustrated. By reason of the Employment Law statutory provisions procedures under the Employment Protection (Consolidation) Act 1978 and the Code of Conduct must be followed. ..."
There is a long line of authorities, which clearly demonstrate that the concept of frustration of contract can and does apply to contracts of employment. One example is the case of Notcutt v Universal Equipment Co (London) Ltd [1986] IRLR 218 .The second question for consideration was whether there had been a dismissal? This was a point of importance because, leaving aside the question of whether or not the contract was frustrated as a matter of law, the question of dismissal had to be expressly considered.It was the employer's case that the employee had, in effect, resigned and undoubtedly on the facts which are referred to in the extended reasons, there was scope for that view. We are not expressing a conclusion as to whether that was necessarily the right view, but it was clearly something (with respect) which the Tribunal should have dealt with, as distinct from merely saying, as they did in paragraphs 7 and 8, that, "We are bound to find the dismissal unfair. In this case the reason for dismissal was not conduct but capability".Thus, it can be said, they have found there was a dismissal, but on what basis, when did it occur and why did they not consider the arguments concerning resignation?There is yet a further point. Was the dismissal unfair? The Tribunal have accepted that there was some consultation but have gone on to say in paragraph 6:
"6. ... they were then under a duty to warn him that they would have to dismiss him ..."
And in the following paragraph they say:
"7. ... We are bound to find the dismissal unfair as Mr Payne, was not warned he would be dismissed nor given notice. ..."
In the case of Taylorplan Catering (Scotland) Ltd v McInally [1980] IRLR 53, the EAT expressly said, in relation to a question of dismissal on grounds of ill health:
"The respondent's dismissal was not rendered unfair because contractual provisions for warnings and appeal before dismissal were not carried out. Those provisions applied specifically to disciplinary matters, not to dismissal on grounds of ill health. It would be absurd [the EAT said] to apply a procedure of formal warnings to cases of genuine ill health."
In fairness to the Tribunal below, the Applicant did not appear (apparently because of ill health) and was not represented and it may well be that there was less legal argument than would normally have been the case.Today, however, this Tribunal is unanimously of the opinion that the decision below cannot stand. The question of frustration of contract was one which required specific consideration in the light of the Applicant's ill health. Further, the question of whether there was, in truth, a dismissal had to be considered and finally, if there had been such a dismissal, was it unfair? Consideration should have been given, among other things, to the case of Taylorplan to which I have just referred.Today, however, we feel unable to substitute our own opinion. Having considered the arguments presented to us, we are unanimously of the view that, although the appeal must be allowed, the whole matter must be remitted to a differently constituted Tribunal to consider the evidence afresh.