Graham Group Plc v Garratt [1997] UKEAT 161_97_2002

EAT
Graham Group Plc v Garratt
[1997] UKEAT 161_97_2002 · 1997-02-20

JUDGE PUGSLEY :

This is an appeal from the decision of the Industrial Tribunal on which they held that the applicant's application to the tribunal was presented in time.The position may be briefly stated. The tribunal found that the effective date of termination was 2nd May 1996 and consequently the application which was presented and received on 17th July 1996 was in time.Before us the respondent to the application, hereafter called the applicant, has conceded that the applicant's case stands or falls on the question of the determination of the date of the effective date of termination. It is not to be suggested that the applicant could sustain a case that it was not reasonably practicable for the application to be presented in time. That matter has particular significance in this case because of the correspondence which took place between the applicant's solicitors and the employer prior to the presentation of the application. At page 13 of the appellants' bundle of documents there is a letter from the applicant's solicitors on 17th April. It is only necessary to quote the penultimate paragraph:
"You will appreciate that our client will need to lodge an Industrial Tribunal application by no later 29th May, so we trust this matter will be dealt with expeditiously."
Thereafter on 1st May 1996 they proceeded to say:
"Our client's instructions are that unless we receive suitable proposals for settling our client's claim within seven days from date of this letter, Industrial Tribunal proceedings will be issued without further notice."
Mr Wicks who appears for the employer and is a personnel manger, is not legally qualified, but he has, if we may say so, put the case of the employer with great skill. He makes the point that it was clearly within the contemplation of the solicitors acting for the employee that the effective date of termination was 29th February 1996. He has brought to our attention a number of decisions related to the position when a person has the benefit of legal advice and an application is not made in time.The point may be very simply put. The tribunal's role was to decide as a matter of law what was the effective date of termination. If there was a misapprehension or error of law made by the author of the two letters on behalf of the applicant the tribunal is not bound to perpetuate that error. The tribunal is not absolved from the responsibility imposed on them to determine the issue. We say that because we can well understand that Mr Wicks feels that it is somewhat ironic that the employee's solicitor should now seek to resile from their statement as to what the effective date of termination was.We turn now to the decision itself. This was a decision of a full tribunal and it is perhaps appropriate to read various parts of their decision. We start with paragraph 3 where the tribunal makes the following findings of fact:
"3. The Tribunal finds the following to be the material facts relevant to the preliminary points to be determined: (a) On 12 January 1996, Mr John Bye, the respondent's Area Director, informed the applicant that he had been selected for redundancy, but that there would be two further meetings during the course of the next two weeks when his position would be considered. In the meantime, the applicant was sent home from work. Because of the applicant's ill health, a further meeting could not be held until 19 February 1996. A third meeting took place on 26 February 1996, when the applicant was informed by Mr Bye that nothing had changed and that their redundancy procedure would be implemented. (b) At the meeting on 26 February 1996, the applicant was also informed that as he had completed nine years employment, he was entitled to nine weeks notice. The applicant inferred that the notice would start to run from the day of the meeting. My Bye told the applicant that if he did not work his notice he would not have to pay tax on his money. The applicant accepted the situation as presented to him and agreed that he would stay at home.
Shortly after he had returned home on the day of the meeting, the applicant received a telephone call from Mr Bye who told him that the nine weeks notice would commence from 29 February 1996. My Bye said "The clock will start ticking from 29 February". (c) The Tribunal accepts the unchallenged evidence of the applicant that his belief at the time was that his employment would continue until the expiry of the nine weeks notice period. (d) The applicant received from the respondent a letter dated 1 March 1996 in the following terms:

"Dear Mr Garratt

This letter confirms the outcome of your meeting with John Bye when you were regretfully advised that your employment with the Company may be terminated for reasons of redundancy and that these meetings were part of the consultation process. After further discussions with you it was pointed out that your post was to be declared redundant and after consultations with you regarding this situation it was mutually agreed that your last day of work with the Company would be 29 February 1996.Your length of service with the Company is 9 complete years, therefore you will paid 9 weeks notice which will be paid in lieu. ..."The letter then sets out the details, and it was pointed out that these were not subject to the usual deductions which clearly from the context of the letter meant income tax and National Insurance contributions. He was reminded:

"... you have the right of appeal against this decision ..."

The tribunal correctly summarised the statutory provisions including the provisions in s.97(1). In paragraph 5 the tribunal went on to say:
"5. In order to determine the question, the Tribunal has adopted the analysis of two alternative sets of circumstances as expounded by the Employment Appeal Tribunal in Adams -v- GKN Sankey Ltd (1980) IRLR 416. It has drawn a distinction between a case where an employee is dismissed with notice but is given payment in lieu of working out that notice, and a case where no notice of dismissal is given but a payment is made in lieu of notice. Where notice of termination is given, the effective date of termination is the date when the notice expires and the fact that a person is not required to work during that period of notice does not mean that the employment terminated earlier than the date specified. However, if the date of termination of employment is immediate, but salaries or moneys are paid in respect of a subsequent period, they are to be taken as compensation for immediate dismissal and not by way of continuation of the employment."
In paragraph 6 the tribunal go on to ask itself:
"How would any reasonable employee in the applicant's position have interpreted the terms of his dismissal when the terms were regarded as a whole, looking to the spoken words of dismissal and the confirmatory language of the subsequent letter?"
The tribunal directed itself as to the matters which a reasonable employee would have regard to, and it came to the view that:
"7. ... a reasonable employee in the applicant's position would have interpreted the words used on 26th February and the contents of the respondent's letter of 1 March, taken together, as an indication that the intent of the respondent was to dismiss the applicant with notice, but make a payment to him in lieu of working out that notice."
It is not incumbent upon an Industrial Tribunal to set out each and every case which forms the basis upon their decision, but we have been referred to the case of Chapman v Letherby & Christopher Ltd [1981] IRLR 440 EAT (Browne-Wilkinson J presiding). That provides considerable assistance to tribunals as to how to construe letters of dismissal. It is I think sufficient to note that it said in that decision in the headnote that:
"The construction to be put on the letter should not be a technical one but should reflect what an ordinary, reasonable employee would understand by the words used. It should be construed, moreover, in the light of the facts known to the employee at the date he received the letter."
It then went on to say:
"Even if [ their construction of the letter ] was wrong [ it ] was truly ambiguous, then it should be construed according to the principle that words are interpreted most strongly against the person who uses them.
Where an employer relies on a notice served by him as having a particular meaning, he should be required to demonstrate that it unambiguously has that meaning. If the employer can rely on ambiguities being resolved in his favour, the employee may be left in doubt as to where he stands and may lose his statutory rights."We have carefully considered the Industrial Tribunal's decision. The tribunal itself noted the letter to which we have adverted from the applicant's solicitor. It did not take those views as to the relevant dates since it could not have been known to the applicant at the material and could not have been taken into account by a reasonable employee in this situation.It is true, as Mr Wicks has reminded us, the only basis for paying an emolument free of tax and National Insurance is that if that is construed as damages for loss of employment, rather as continuation of wages. He points out that if you say to employee, "Well look, we are giving you notice but you do not have to work it out" as sometimes happens the person is still an employee and tax and National Insurance would have to be deducted. We accept, though it is not a matter we have to determine, that is probably an accurate account of the fiscal law. But as one of the industrial members pointed out, our responsibility is to construe the provision in the light of employment law. The fact that the failure to deduct tax and National Insurance points to it being damages is not conclusive.The position is that having carefully considered all the evidence in the case as this tribunal did, we think that it asked the right questions. In our view it was open to them to find that the letter came within the context of giving notice but removing the requirement to work out the notice, rather than the express dismissal without notice and the immediate payment of compensation for the failure to give notice. In any event, as in the case to which we have adverted Chapman v Letherby & Christopher Ltd , even if that is not the case, it is clear that there was an ambiguity about the letter when combined with the oral conversation. Such an ambiguity should be construed against those seeking to rely upon it.It should be said in conclusion, that we have considerable sympathy for the working practitioner. These matters are complex. We do not for a moment criticise the fact that the appellants have appealed this decision. It has been properly argued before us. There are cases where one does take the view that appeals are launched as part of a tactical game. This is not such a case. It was a responsible appeal.We therefore dismiss the appeal.