Focsa Services (UK) Ltd v Birkett [1996] UKEAT 826_95_3001

EAT
Focsa Services (UK) Ltd v Birkett
[1996] UKEAT 826_95_3001 · 1996-01-30

JUDGE CLARK:

This is an appeal by the employer, Focsa Services (UK) Ltd against a decision of the Leeds Industrial Tribunal (Chairman: Mr P A Morris, sitting alone) awarding the employee Mr Birkett the sum of £7,726.67 by way of damages for breach of contract.The Respondent commenced employment with the Appellant as a refuse collection operative on 1 August 1994 subject to a six month probationary period. His letter of appointment of that date provided for one week's notice of termination of employment by the employer during the first two years of continuous employment. The letter also contained this provision:

" Disciplinary Procedure

The disciplinary rules and procedure will be set out in the company manual and available for inspection during the hours of 9am to 4pm at the Halifax office. The person to whom you should appeal in any disciplinary matter is the Contract Manager."That disciplinary procedure provided:

" DISMISSAL

10. In cases of dismissal the employee shall be interviewed by the Manager and told why his/her services are considered unsatisfactory.11. The employee will be provided with written reasons for dismissal as soon as reasonably practicable, together with confirmation of his right of Appeal."The Appeals Procedure provided:
"An employee who wishes to appeal against any disciplinary decision must do so in writing to his immediate superior within three working days. The appropriate level of Management will hear the appeal and his/her decision is final. At the appeal any disciplinary penalty imposed will be reviewed but it cannot be increased."
And Note 3 provides:
"3. Where probationary service has not been completed and dismissal arises from unsuitability for confirmation of appointment."
In those circumstances "The Appeals procedure does not apply to dismissal notices given".The Respondent was off sick in December 1994. On 8 December he received a letter dated 7 December from Mr Pritchard, the Contract Manager, in these simple terms:

"Dear Mr Birkett

TERMINATION OF EMPLOYMENT

I write to give you one week's notice terminating your employment with FOCSA Services UK Ltd. Your last day of employment will be Wednesday, 14 December, 1994."The Respondent telephoned Mr Pritchard, to say that he would be in to work the last three days of his employment and protested about being dismissed. Mr Pritchard told him not to set foot on company premises and accordingly the Respondent never returned to work.By an Originating Application presented on 13 February 1995 Mr Birkett made a complaint to the Industrial Tribunal alleging (1) Breach of Employment Contract and(2) Unlawful deductions, Wages Act 1986. He did not complain of unfair dismissal, not having completed two years' service to qualify for statutory protection against unfair dismissal.At the Tribunal hearing held on 7 June 1995 Mr Birkett appeared, represented by Mr Winterbottom, and gave oral evidence. The Appellant did not appear, but submitted written representations dated 2 June 1995 which were considered by the Chairman notwithstanding their failure to comply with the time limit in rule 8(5) of the Industrial Tribunal Rules of Procedure 1993.The Chairman, in his Extended Reasons dated 26 June 1995, upheld the Wages Act complaint in respect of three days' pay representing the last three days of the notice period which the Respondent was not permitted to work. There is no appeal against that part of the award, namely £100.15.The Industrial Tribunal Extension of Jurisdiction etc Order 1994 (SI 1994/1623), made under Section 131 of the principal Act, conferred jurisdiction on Industrial Tribunals to hear claims for damages for breach of a contract of employment with effect from 30 August 1993.In considering the Respondent's claim for breach of contract the Chairman found as a fact that the Respondent was dismissed by the Appellant. That dismissal took place on 14 December 1994. He accepted that under the normal rules of common law an employer is entitled to dismiss an employee for any reason as long as he gives him notice (in this case the contractual entitlement was one week's notice).However, in paragraph 7 of the reasons the Chairman said this:
"7. I do not think it is going too far to say to say that the effect of the terms of the contract of employment in this case is to give Mr Birkett the right not to be unfairly dismissed as a right under his contract, a right he has by statute but which because of statutory restrictions cannot be enforced under the statute but can be enforced by way of breach of contract in this case."
He found that the employer had breached the contract by dismissing the Respondent without following a fair and proper procedure leading to a fair dismissal. In this case, the Chairman concluded that the Respondent had been dismissed on what appeared to be a whim of the management without any disciplinary procedure being followed. He then went on to assess damages on precisely the same basis as would a Tribunal calculating a compensatory award following a finding of statutory unfair dismissal, awarding loss of earnings to the date of hearing and a sum for future loss on the basis that the Respondent would be expected to find new employment after a further 26 weeks. A deduction was made for Unemployment Benefit received, leading to a total award of damages for breach of contract of £7,726.67.Did the Chairman go too far? Mr Winterbottom, in support of the Chairman's approach, submits that there was a finding that the Respondent had a contractual right to be dealt with under the written disciplinary procedure, including the right of appeal, notwithstanding the fact that the Respondent had not completed his six month probationary period. We accept that that was the finding of the Chairman and we do not propose to interfere with it.Next, he says, the Chairman found as a fact that the Respondent was dismissed on a whim of management, and that had the disciplinary procedure been followed he would not have been dismissed. Thus the dismissal was in breach of contract. What loss flowed from the breach? Since the Respondent would not have been dismissed had the contractual disciplinary procedure been followed, his loss must be assessed on the basis that he is, and will remain out of work in the future, and that but for the breach of contract he would have remained in the employment of the Appellant. Thus, his loss must be calculated in much the same way as a compensatory award following a finding of unfair dismissal.Accepting the logic of the Chairman's approach, is it correct in law?At paragraph 6 of the reasons the Chairman correctly summarises the common law rule in this way:
"6. Under the normal rules of common law an employer is entitled to dismiss an employee for any reason as long as he gives him notice. ..."
That is the simple answer here, submits Mr Little for the employer. It was not open to the Chairman to imply a term of the contract that the Respondent would enjoy the equivalent of the statutory right not to be unfairly dismissed. None of the recognised tests for implying such a term are here made out. We agree.The fallacy, in our judgment, in the Chairman's reasoning is to disregard the normal common law rules as to loss in cases of wrongful dismissal. That loss is limited to the sums payable to the employee had the employment been lawfully terminated under the contract. Once a dismissal has taken place, as was accepted and found in this case, it is irrelevant to consider what might have happened had a contractual disciplinary procedure been followed. An employer is entitled to dismiss on contractual notice at common law for whatever reason.The fact is that Mr Birkett was dismissed. Insofar as he did not receive his full notice, he is generally entitled to damages to reflect the pay during the notice period and no more. The only exception is where employment would have been extended by operating the disciplinary procedure, Boyo v Lambeth London Borough Council [1994] ICR 727 ; Gunton v Richmond [1980] ICR 755. In this case there is no evidence to suggest that use of this employer's disciplinary procedure would have extended beyond the one week's contractual notice which was given. Accordingly no additional loss under this head arises.It follows, in our judgment, that the Chairman's approach was wrong in law. The appeal must be allowed. The award of damages for breach of contract must be set aside. We substitute an award of £100.15 under the Wages Act Claim in accordance with the Chairman's finding in paragraph 5(c) of the reasons, and £142.68 under paragraph 5(d) of the reasons.