Clode v Department Of Social Security [1997] UKEAT 781_96_1301

EAT
Clode v Department Of Social Security
[1997] UKEAT 781_96_1301 · 1996-12-02
MR JUSTICE LINDSAY : We have before us an appeal by Mrs M Clode against the decision of the Industrial Tribunal under the Chairmanship of Mr N.E. Coles sent to the parties on 6th June 1996. Mrs Clode had been the applicant in the Industrial Tribunal; the respondent was the Department of Social Security ["the Department"]. The decision of the Industrial Tribunal was that Mrs Clode had not been unfairly dismissed by the Department. Mrs Clode had also claimed she had been discriminated against by reason of her sex; that claim was also dismissed but, as her appeal has not touched on that part of the case, we need to mention it no further.The facts necessary for the purposes of this appeal are as follows. Mrs Clode began work for the Department in March 1979. It was full-time employment. Twice she took maternity leave but after the birth of each of those two children she returned to full-time employment. In August 1989, for the birth of her third child, she took maternity leave from the personnel department in which she was then engaged. She decided that she wished on her on return from that third maternity leave to work only part-time and that was agreed with the Department. The part-time work began - some 24 hours a week - on 28th May 1990. She worked at the Tameside Contributions Agency in Ashton-under-Lyne.By early July 1990, after her return to work, she had been provided with a letter from the personnel section of the Department which set out her "Revised Terms and Conditions of Service" with effect from the 29th May 1990. The terms include the following:-
"The following paragraphs summarise your main conditions of service as they will apply from the 29th May 1990 ... Details of conditions of service applicable to Civil Servants are to be found in the Staff Code and the Civil Service Pay and Conditions of Service Code ... You will work 24 hours a week ... These Revised Terms and Conditions of Service are offered as a result of your application. They may be terminated by you, or by management, provided that at least one month's notice is given. You may ask Management to consult your Trade Union if you wish the arrangement to continue. In the event of your being unable to continue with the arrangements, or wishing to revert to full-time work, the continuation of the arrangement will be subject to renegotiation and, if appropriate, you will be offered a full-time post as soon as possible. When you resume full-time work the suspended terms of appointment will be reinstated."
Neither side was able to produce to us at the hearing a copy of the Staff Code or Civil Service Pay and Conditions of Service Code so neither side could illuminate us as to the way in which the terms and conditions called Whitley Council Terms and Conditions had become applicable to Mrs Clode's employment. However, it had been common ground before the Industrial Tribunal that the Whitley Council terms were generally applicable to employees such as Mrs Clode. Miss Woodward for the Department indicated that it had been said below, and not disputed, that the Whitley Council terms were applicable by reason of being incorporated by reference into Mrs Clode's Contract of Employment. Whether any other Whitley Council terms are relevant we cannot say as only one sheet of them, including No. 39, was put in front of us. No. 39 reads:-
"When an individual gives notice he or she wishes to end a part-time arrangement, although it cannot be guaranteed that a full-time post will be readily available, every possibility, including that of a voluntary transfer, will be explored to ensure as quick a posting as possible."
By November 1995 Mrs Clode decided she was in a position to return to full-time working and wished to do so. On the 15th November 1995 she made an oral request in that behalf to her Area Manager, Mr Frank King, and she confirmed that in writing on the 17th November. As to the Department's response to that request, the Industrial Tribunal held as follows:-
"The Tribunal heard a considerable amount of evidence as to what transpired thereafter but, in essence, her request of return to full-time working was refused by the Divisional Manager of the Contributions Agency [Mr Rushton] on the basis that this would have rendered the number of full-time employee[s] over complement and [would have] been contrary to the financial restrictions anticipated under the Public Expenditure Survey Settlement for the following year.
8. Mr Rushton's decision was made and adhered to by him, notwithstanding the efforts by Mr King to persuade him that it would be contrary to the reasonable expectations of employees who had gone on to a part-time basis and wished to return to work full-time (it having traditionally been the case that they were invariably allowed to do so) and that in Mr King's view, it was "Morally wrong to change the Department's policy" without employees being forewarned that, if they were to change from a full-time position to a part-time position, there was no "guarantee" that they would be able to revert back to a full-time position when they wished so to do".The Area Manager, Mr King, writing of both the Contributions Agency in which Mrs Clode was working part-time and of another type of work, that of the Benefits Agency branches of the Department, wrote as follows to Mrs Clode on the 23rd February 1995:-
"Dear Marian,

Re: Application for full-time working

You will by now be aware that the Contributions Agency are unable to meet your request for a return to full-time working.In the light of this I have fulfilled the Agency's obligation to explore alternative full-time opportunities. Hyde Benefits Agency have indicated that they may be in a position to offer you a full-time post.Before I progress the issue any further I am seeking an undertaking that you will accept such a posting. I should be grateful if you would let me know your response by close of business on Friday 3rd March 1995.Yours sincerely,

Frank King

Area Manager"

Mrs Clode gave evidence to the Industrial Tribunal that Mr King had admitted to her that that letter was a sham in that he had said to her that no job at the Hyde Benefits Agency had been available. Mr King's evidence, though, was that that was untrue. His evidence was expressly preferred by the Industrial Tribunal which held that Mrs Clode, if she had responded at all to Mr King's letter, had not responded in any positive way.On the 29th June 1995 Mrs Clode, asserting breach of agreement by the Department, gave 4 weeks notice to expire on the 28th July 1995. On that day her employment with the Department ended. She said she was forced to resign. On the 7th September she made application to the Industrial Tribunal. She claimed that between her request for full-time working in November 1994 and her resignation "No suitable, adequate, clear or non-discriminatory response was received".The Industrial Tribunal held that it was not a term of Mrs Clode's contract that she was entitled to return to work full-time on application, either in the Contributions Agency or in any other position within the Department. They did, though, hold that she was contractually entitled to require the Department to use its best endeavours to seek to accommodate her in a full-time position. They held that the reasons given by the Divisional Manager of the Contributions Agency, Mr Rushton, for the Department not being able to take her on full-time were genuine and based on sound economic grounds. They held that Mrs Clode decided not to accept any position (such as that in the Hyde Benefits Agency) which Mr King had, in his letter of the 23rd February, indicated was potentially available to her and that there was, accordingly, no reason why he should have explored any other possibilities. There was thus no breach by the Department either as to full-time working (as to which there was no contractual provision) nor as to "best endeavours", as to which there was a contractual provision but one which the Department had satisfied. It followed that there had been no dismissal and the complaint of unfair dismissal therefore failed.Mr Symonds for Mrs Clode argued before us that the Industrial Tribunal had erred in law in finding that there was no contractual term that Mrs Clode was entitled to require to be taken on for full-time working on application. In oral argument he indicated the right that Mrs Clode asserted was not merely to be accepted for full-time working on application but to be so accepted for the same type of work (in the Contributions Agency as opposed, for example, to the Benefits Agency) as that upon which she had been working part-time. Mr Symonds had two distinct routes to that conclusion; the first was that a term to such effect was imported into Mrs Clode's Contract of Employment by way of being a custom and practice incorporated into the Department's Contracts of Employment with persons such as Mrs Clode. No other form of implication of the term was asserted; we are thus not concerned with business efficacy or, for example, the "officious bystander".As to custom and practice, the Industrial Tribunal held that it had become "Acknowledged as being the norm" that any part-time employee who wished to revert back to full-time working would be permitted to do so, usually, though not invariably, with the same department or division in which he or she was working part-time. That, in the Industrial Tribunal's view, had not been disputed by the Department. However, the Industrial Tribunal continued:-
"The Tribunal is of the unanimous view that something that has been happening over a number of years and may indeed have become perceived as the norm does not thereby become a term of the contract."
There had not either, in the Industrial Tribunal's view, been any material variation in Mrs Clode's terms since she had returned to (part-time) work and accordingly the Industrial Tribunal concluded as it did.Mr Symonds referred us to Hutton -v- Warren [1836] 1 M & W p. 465 , a case between erstwhile landlord and tenant in which Parke B held at p. 475-476 that:-
"The relations between landlord and tenant have been so long regulated upon the supposition that all customary obligations, not altered by the contract, are to remain in force, that it is too late to pursue a contrary course; and it would be productive of much inconvenience if this practice were now to be disturbed."
Mr Symonds referred us to paragraph 13-016 of the current edition of Chitty as to implications possible from the circumstance of the parties to a contract having, consistently on former and similar occasions, adopted a particular course of dealing. In our case there is no evidence of any former or similar occasion involving both of the present parties, the Department and Mrs Clode. We were referred to Cunliffe-Owen -v- Teather [1967] 1 W.L.R. p. 1421 which involved consideration of the usage of the Stock Exchange. At pp. 1438-9 there are the following passages to be found in the judgment of Ungoed-Thomas J.:-""Usage" may be admitted to explain the language used in a written contract or to add an implied incident to it, provided that if expressed in the written contract it would not make its terms or its tenor insensible or inconsistent (see Palgrave, Brown & Sons Ltd. -v- S.S. Turid).
"Usage" is apt to be used confusingly in the authorities, in two senses, (1) a practice, and (2) a practice which the Court will recognise. "Usage" as a practice which the Court will recognise is a mixed question of fact and law. For the practice to amount to such a recognised usage, it must be certain, in the sense that the practice is clearly established; it must be notorious, in the sense that it is so well-known, in the market in which it is alleged to exist, that those who conduct a business in that market contract with the usage as an implied term; and it must be reasonable. The burden lies on those alleging "usage" to establish it ... - ... Practice is not a matter of opinion, of even the most highly qualified expert, as to what is desirable that the practice should be ... Arrangements or compromises to the same effect as the alleged "usage" do not establish "usage"; they contradict it. They may be the precursors of "usage"; but "usage" presupposes that arrangements and compromises are no longer required. It is, in my view, clearly not necessary that a practice should be challenged and enforced before it can become a "usage", as, otherwise, a practice so obviously universally accepted and acted upon as not to be challenged could never be a usage. However, enforcement would be valuable and might be conclusive in establishing usage. ... A party to a contract is bound by "usages" applicable to it as certain, notorious and reasonable, although not known to him. If the practice, though certain and notorious, is unreasonable, it of course follows that it cannot constitute a "usage" which the Court will enforce as a "usage". Nevertheless if a party knows of such a practice and agrees to it, then though unreasonable, he is bound by it (Perry -v- Barnett, Blackburn -v- Mason)."
There is no evidence before us of enforcement in other cases of the term which Mrs Clode avers to exist.Halsbury's Laws Vol. 9 4th Edition at paragraph 353 summarises the position as follows:-
"Thus, in the absence of evidence of a contrary intention, a Court may import into a contract any local custom or usage which is notorious, certain, legal and reasonable and, provided that it can be shown that the custom or usage normally governs the particular type of contract in question, it will be regarded as part of that contract in precisely the same manner as if it had been expressly agreed between the parties"
It is not, of course, every repeated practice, even ones seeming to satisfy the tests which Halsbury's suggests, that will be recognised as having contractual force. As Halsbury's puts it, a Court may import into the contract, not that it necessarily shall. Few would doubt, for example, that even in cases where an employer year on year provides an office Christmas party or retirement presents for long-serving staff that he does not thereby give rise to contractual rights to such effect. To use the expression used by Ungoed-Thomas J., an arrangement may be to the same effect as an alleged "usage" but not establish the "usage". The point is illustrated by a case (not a custom and practice case) referred to us by Miss Woodward, namely Young -v- Canadian Northern Railway Co. [1931] A.C. p.83 JC PC . Nowadays, in the light of arrangements made as to collective bargains, the result might be different, which is why the case is to be taken for present purposes only to be an illustration of a line of reasoning. An employee there sued for wrongful dismissal upon the basis that his employer was in breach of an agreement, to which the employee was not party, which had been made with a labour organisation and which provided terms and conditions for employment in the railway industry concerned in the case. It was proved that the employer railway company applied those terms to all its employees in the department in which the plaintiff worked. The judgment of Lord Russell of Killowen shows at p. 88 that :-
"Their Lordships, however, are unable to treat these matters as establishing contractual liability by the railway company to the Appellant. The fact that the railway company applied the agreement to the Appellant, is equally consistent with the view that it did so, not because it was bound contractually to apply it to him, but because as a matter of policy it deemed it expedient to apply to all.
If the conduct of the railway in applying the provisions of the agreement to the Appellant could be explained only by the existence of a contractual obligation to the Appellant so to do, it would be not only permissible, but necessary to hold that the existence of the contractual obligation had been established. In the circumstances, however, of the present case, their Lordships find themselves unable so to decide."To revert to the case before us, two matters in particular may be urged in support of the Industrial Tribunal's conclusion. Firstly, as Young supra illustrates, if the Department has in the past given former full-time workers who for the time being were working only part-time the opportunity on application to revert to full-time working that may be nothing more than the Department seeing it to be expedient as a matter of policy at the time so to do, without that practice necessarily thereby hardening into a contractual provision. It may have been no more than an arrangement to the same effect as the alleged "usage" but one which did not itself establish a "usage". Whether that was so would have been for the Industrial Tribunal to decide.Secondly, the authorities, as will have been seen, require the "usage" to be reasonable. The onus of proving the "usage" was on Mrs Clode, but Mr Symonds accepts that there was no finding of reasonableness by the Industrial Tribunal. Whether there was evidence of it we have not been told but a moment's reflection suggests powerful grounds for an argument that the term suggested would be unreasonable. If the suggested term had contractual force then an employer could find himself powerless to resist a substantial increase in the number of persons in his full-time employ should part-time workers apply to return to full-time working. If Mr Symonds' additional requirement that the full-time working should be in the same branch or in the same type of work as that in which the part-time worker was for the time being engaged was applicable a department could greatly increase its full-time membership overnight, notwithstanding that there was no economic or other need in that department for more staff or greater hours worked. Moreover, if the suggested practice was contractual, a prudent employer, to avoid such an unwelcome result, would be driven to taking on outsiders coming to him afresh rather than giving part-time work to persons who had hitherto worked for him full-time.In the absence of a finding that the alleged term was reasonable and in recognition of the onus being on Mrs Clode so to prove and given also the powerful considerations to support an argument that the term alleged would not be reasonable, we see no reason to doubt the Industrial Tribunal's conclusion that it was not a term of Mrs Clode's contract that she was entitled on application to return to full-time working. Still less could we be satisfied that the term should be such that the full-time working to be afforded to her should be work of the same nature as the part-time employment which for the time being she enjoyed. The point illustrated by Young supra that something, as the Industrial Tribunal puts it, "perceived as the norm" may nonetheless not become a term of contract only adds to our difficulty in finding any error of law in the Industrial Tribunal's decision so far as concerns the term being an implied term.Mr Symonds next argued that the term suggested was part of the provisions expressly agreed between the Respondent and Mrs Clode. We were referred to Mackenzie -v- Duke of Devonshire [1896] A.C. p. 100 ; it supports the proposition that, where the language of a trust settlement is clear, its construction is not to be controlled or qualified by a statement in it of the settlor's intention. Lord Halsbury observed at p. 406 :-"It would to my mind be disastrous to introduce such a system of construing a deed".We were referred also to Adamastos Shipping Co. Ltd. -v- Anglo Saxon Petroleum Co. Ltd. [1959] A.C. p. 133 HL where a charter party had incorporated in it by way of a typed slip a provision that said "Paramount Clause. This Bill of Lading shall have effect subject to the carriage of goods by Sea Act of the United States ... 1936". That 1936 US Act itself had a provision within it the effect of which was that its provisions should not be applicable to charter parties. The House of Lords held that the part of the 1936 Act which provided that it should not apply to charter parties could in all circumstances be rejected as meaningless. That case led Mr Symonds to an argument which seems to amount to this; that to the extent that words in Mrs Clode's contract or in the cited Whitley Council Condition No. 39 are either inconsistent with each other or with the term which Mrs Clode now suggests to exist then those words may be rejected as unintended or meaningless. However, our task is plainly to attempt to construe Mrs Clode's contract as a whole. Although we are denied that by the failure of the parties to produce that whole we must at least attempt to construe the totality of what has been produced to us.Doing that, and looking first at the Whitley Council provision, we see that a full-time post (the definite article which the Industrial Tribunal took to be there is, in fact, not there; it is "a" rather than "the") is expressly said not to be guaranteed to be "Readily available". But it cannot be inferred from that denial of assured ready availability that a full-time post is guaranteed ever to be available. The reference to voluntary transfer itself also suggests that the full-time work may not be in the same place or of the same kind as that in which the part-time work is for the time being done.As for the longer contractual passage we have cited, the reference to "renegotiation" upon a part-time worker wishing to revert to full-time working does not, of itself, require or suppose that the renegotiation should necessarily lead to an agreement that there should be full-time working. The words "if appropriate" are well able to mean, in the context of a wish to revert to full-time working, that only if it is appropriate so to offer as a result of the renegotiation that has taken place will a full-time post be offered. The words " when you resume full-time work", coming after the references to renegotiation and to an offer being made being made "if appropriate", cannot be read to require, regardless of the appropriateness or not in the light of the renegotiation, that there necessarily shall be a resumption of full-time working.Whatever the case might be were this issue to be more comprehensively addressed in some future proceedings, we are unable, in the light of the material put in front of the Industrial Tribunal, (and whether the Whitley Council Condition No. 39 and the longer cited contractual provision are read separately or together) to describe the Industrial Tribunal's finding as to there being no contractual entitlement to a return to full-time working as disclosing any error of law.Before leaving the subject of express terms, we mention that Mr Symonds argued that the material before the Court should be construed contra proferentem, namely, he said, against the Department. The sort of "take it or leave it" approach to, say, doing business with an insurance company by way of taking out one of its policies, is not necessarily found in employment cases in relation to contracts of employment at all events when they are of a kind which may well be negotiated between one or more Unions on the one hand and one or more Government departments on the other with a view to their provisions regulating the employment of perhaps thousands of employees. We would thus have real doubts, in the absence of relevant evidence, of treating the contra proferentem rule as appropriate or in necessarily treating the employer as proferens. We need say no more, though, because even if the provisions we have seen were to be construed contra proferentem the point at issue would nonetheless in our view be properly decided as the Industrial Tribunal held.It will be remembered that the Industrial Tribunal had found there to be a contractual right in Mrs Clode to require the Respondent to use its best endeavours to seek to accommodate her in a full-time position. The Department did not cross-appeal against that finding and we have not been pressed in connection with it. However, for completeness, we add that the papers before us show the Department by its Contributions Agency making approaches to others to seek to accommodate Mrs Clode's wish. We have no reason to doubt the Industrial Tribunal's conclusion that the Department did comply with its contractual obligation to the Applicant in relation to the investigation and exploration of other opportunities that might be available.We indicated earlier that the sex discrimination aspect of the case has not been addressed. We find there to be no error of law in the Industrial Tribunal's decision that the Applicant was not unfairly dismissed. Mrs Clode's appeal is dismissed.