Peterborough Regional College v Gidney [1998] UKEAT 1270_97_1311

EAT
Peterborough Regional College v Gidney
[1998] UKEAT 1270_97_1311 · 1998-11-13
MR JUSTICE LINDSAY : We have before us a full hearing of a number of appeals in the matter Mr V. Gidney against Peterborough Regional College. It is the College that appeals against some decisions of the Industrial Tribunal. There was a decision promulgated on 14 August 1997 in these terms:
"The unanimous decision of the Tribunal is that the Applicant was constructively and unfairly dismissed by the respondent and the proceedings are adjourned for a remedy hearing."
There was then a remedy hearing, but the first remedy hearing led to a review and then there was a second remedy hearing and the decision at the second remedy hearing, which was promulgated on 12 January 1998, after a hearing on 31 July 1997, was that:
"The decision of the Tribunal dated 31 July as to remedy having been reviewed the respondent is ordered to pay to the applicant (a) £6,249.03 for breach of contract; (b) the compensation for unfair dismissal in the sum of £7,706.64."
Mr Gidney's complaint was that he had been constructively and unfairly dismissed from his position as a senior lecturer at the Respondent College and that he had accordingly resigned on 1 July 1996. On that day, or at any rate by handing in a letter of that date, Mr Gidney wrote to Mr Brettell of the Staffing Unit of the College as follows, a very short letter:

"I formally resign my post in line with my contract of employment."

The terms of that letter were found by the Industrial Tribunal to have been agreed before the letter was sent.

(n) is:

"(n) The applicant said he would resign in the circumstances and later saw Lawrence Brettell when the terms of a letter of resignation were agreed."
What did that expression "in line with my contract of employment" mean? Well for that one needs to look at his contract and, without going into it in any great detail, at paragraphs 5.1 and 5.2, it provided that there were three academic terms a year, the summer term ending on 31 August and the autumn term ending on 31 December and that not less than three months' notice had to be given to bring a contract to an end by retirement at the end of the summer term and not less than two months' notice to retire at the end of either of the other two terms. That had the consequence that notice given on 1 July could not take effect until 31 December. That seems to have been the College's understanding of Mr Gidney's letter because their first response on 3 July 1996 from Mr Brettell to Mr Gidney was:
"I acknowledge receipt of your letter dated 1st July 1996 resigning your position at Peterborough Regional College.
As discussed with you on Monday 1st July 1996 in my office, your resignation will take effect on 31st December 1996, unless otherwise agreed."Later, on 23 July, Dr Stapleford, the Principal of the College, wrote to Mr Gidney and said:
"I am writing to formally acknowledge [so even Doctors of Philosophy split infinitives] your intention to leave and have notified Data Sciences accordingly. Your P45 will be sent to you at a future date, together with any other paperwork.
I enclose a 'Leaving Employment with PRC' form for you to complete in due course."Then Dr Stapleford thanks Mr Gidney for the work that he had done whilst he was there. It is the College's case that between 1 July 1996 and 31 December 1996 Mr Gidney so conducted himself that he could properly have been suspended, or might properly have been dismissed, even had he not already given in the resignation letter that I have read.The Industrial Tribunal found that the employment had ended on 1 July 1996. What they said in their paragraph 1 is:
"1. The applicant, Mr Gidney, was employed by Peterborough Regional College from 1 September 1988 until 1 July 1996 when he resigned. He complains that he was constructively dismissed."
And on the next page, at paragraph 5, they say:
"5. The Tribunal considered in particular the course of conduct of the respondents from 20 March to 1 July 1996.
And in their paragraph 7, there is again a reference to the 1 July.It is also apparent from the way in which they computed the losses that Mr Gidney was said to have suffered that they had in mind that the dismissal was the 1 July 1996, and that is apparent in the Extended Reasons given in relation to the compensation hearing.The College is entitled, in a sense, to attack the Industrial Tribunal's conclusions on two points. First of all, that there was no constructive dismissal whatsoever, but, secondly, that whether or not there was constructive dismissal, the employment did not end on 1 July but continued thereafter. Moreover, as the College would say, employment continued prima facie until 31 December 1996 and they say also that important consequences flow, in particular in relation to quantification, from the Industrial Tribunal's view that employment stopped on 1 July.So far as concerns the constructive dismissal aspect of the case, a part of the case which Mr Lynch, in a well prepared argument on behalf of the College, has only lightly dealt with, the Industrial Tribunal held that Mr Gidney had been constructively dismissed. On that aspect of the case the Industrial Tribunal heard the College's case which was as follows:
"The respondents submit that the resignation was not due to any action by the College Authorities and in any course [case] any such action was belated. If the applicant was aggrieved he should have invoked the grievance procedure. The applicant gave evidence of blazing rows with three individuals on 28 June but these were denied. His resignation could have been averted as a full timetable could have been provided by 10.00 am the following morning. The applicant was prone to extravagant gestures. The real reason he wished to leave the College was because he had started a business of his own."
That was the College's response to the allegation of constructive dismissal. But that failed because the Industrial Tribunal held in their paragraph 9:
"9. For whatever reason the applicant's status as a prominent and senior figure in the teaching hierarchy of the College was subjected to conduct by his employer which eroded both his administrative and teaching functions to considerable extent. He resigned for this reason and no other."
It is, of course, for the Industrial Tribunal to listen to the case, to hear the evidence and to decide whose evidence to accept and there is no discernible error of law in their reasoning as to whether there was a constructive dismissal and that is why, no doubt, Mr Lynch does not press the point. But was the Industrial Tribunal right to look to 1 July as the end of his employment?A person, an employee, who is in a position to assert constructive dismissal does not necessarily have to leave the employment there and then. He can walk out and the events have to be such that he would be justified were he to walk out, but equally he is entitled instead of walking out, to give notice. In the case so often referred to in relation to constructive dismissal, namely Western Excavating (ECC) Ltd v Sharp [1978] ICE 221 in the Court of Appeal, Lord Denning at page 226, speaking first of the sort of events that entitle an employee to say that he is constructively dismissed, goes on as follows:
"The employee is entitled in those circumstances to leave at the instant without giving any notice at all or, alternatively, he may give notice and say he is leaving at the end of the notice. But the conduct must in either case be sufficiently serious to entitle him to leave at once."
So that although it is, I would have thought, statistically the rarer kind of case, constructive dismissal can lead to the giving of a notice and, indeed, section 95 (1) (c) of the current Act acknowledges that to be the case. Mr Lynch referred us to Air Canada v Lee [1978] ICR 1202 which is a case where there was a constructive dismissal which led not to the employee walking out there and then but rather to his giving notice.So where the sort of events that lead to constructive dismissal have occurred, a choice is given to the employee. He can walk out - but that, of course, has the demerit that for a while, at any rate, he is likely to be unemployed as he looks about for another job, albeit in the hope of later receiving a basic and compensatory award from an Industrial Tribunal. Alternatively, he can give notice, in which case he has, during the period of the notice, the benefit of a salary such as he had before he gave the notice.There are very few examples of this later kind of case and Air Canada is the only one that has been drawn to our attention. But plainly giving notice is a possibility. But if notice is given in a constructive dismissal scenario in the way that we are talking about, at what point can you say that the employee is truly dismissed? At what point can you say that the contract of employment is truly at an end? Well, for some statutory purposes, one looks at the "effective date of termination", as provided for in section 97 (1) (a), but that is not a general answer to the question because that "EDT" is a specifically defined term and does not give an answer applicable in all cases. But, surely, it would be grossly artificial to arrive at a position in which an employee entitled to regard himself as constructively dismissed, but who has elected to give notice expiring in the future and has elected therefore to work down to the expiry of his notice and to be paid until the expiry of his notice, could, for all that, describe himself as unemployed in the period down to the expiry of his notice or as already actually dismissed? A contract of employment would, in such a case, still be subsisting as the repudiation of the contract of employment by reason of the employer's conduct would not have been accepted immediately, but only as from a future date not yet arrived. In the meantime there would be a subsisting contract which could be breached. For example, during the notice period the employee might consistently arrive late. If that was a breach of a contractual provision, then the employer would have remedies for that breach. Equally the employer would be bound; if, for example, he is obliged during the notice period to pay the employee, well then, he would be in breach if he failed to pay the employee. We have had another case drawn to our attention by Mr Lynch - Horcal Ltd v Gatland [1984] IRLR 288 - which illustrates the operation of such a view.The better view, in our judgment, is that dismissal in such a case occurs when the notice given by the employee expires, unless of course some subsequent arrangement is proven to have taken place. Accordingly, when the question of compensation comes to be examined by the Tribunal and when the Tribunal therefore asks itself what is the benefit which the employee might reasonably be expected to have had but for the dismissal - that is the language of section 123 (2) (b) - then the dismissal that is looked to is that of the expiry of the notice, again unless some intervening events have occurred to displace that. The employee in the meantime is obliged, unless clearly released by implication or by express agreement, to perform his part of the continuing contract and so is the employer. Another useful case that has been drawn to our attention is Parkinson v March Consulting Ltd [1997] IRLR 308, where at paragraph 27 in the judgment of Evans LJ, he says:
"When the employment is terminated by reason of a notice given in accordance with the terms of the contract of employment, then in my judgment the employer's reason for the dismissal has to be determined, not only by reference to his reason when the dismissal occurs but also by reference to his reason for giving the prior notice to terminate. "
And at the end of the paragraph he says:
"If circumstances have arisen, before the notice takes effect, which justifies summary dismissal, then the same reasoning would not apply, because the employer would not need, in order to justify the dismissal, to refer back to the previous notice."
If that is right, then on the facts of this case the Industrial Tribunal, when considering compensation, should have asked itself what was the benefit which Mr Gidney might reasonably be expected to have had, but for his dismissal, on the footing that the dismissal was not on 1 July 1996, which was merely the date of his giving of notice, but was either at 31 December 1996, which was when the notice was limited to expire, or, if they had found some earlier date between 1 July and 31 December 1996 as a date of dismissal, what was the benefit he might have reasonably be expected to have had but for his dismissal on that intervening date?Looking at the matter, as it did, as if the termination was 1 July shut out from the Industrial Tribunal, at the compensation stage, evidence of the relations between the parties after 1 July and that, it seems to us, was a fundamental flaw. Suppose, for example, that Mr Gidney, between 1 July and 31 December 1996 (and there not having been some intervening special arrangement between the parties to substitute some other date of termination) had done something in the grossest form of breach of a senior lecturer's duty. I emphasise that there is not a shred of evidence of any such kind of events having happened as I am about to postulate, but suppose, as was put in argument to us, that he had been seen and had admitted to have struck a student on the campus without any conceivable justification. Imagine that to be a case of the grossest breach of a senior lecturer's duty, entitling the employer to dismiss him there and then. Would it be the case (surely not, says Mr Lynch) - that his compensation in respect of his constructive dismissal would have to be assessed on the basis that notwithstanding that after 1 July he had committed an offence which enabled the College to dismiss him there and then, that, nonetheless, the Tribunal would be obliged to treat him as if he could not have been dismissed, there and then but moreover that he might have had the benefit of being employed for another year for some other further period. It would offend common-sense if that was the case. Awards of compensation are required to be of amounts considered just and equitable (section 123 (1)). Would it be right to compensate a man as if he might otherwise have been employed, say for a further year, after giving notice, if the intervening events had been such during a continuing contract of employment that either certainly or very likely he would have been sacked three weeks later? Would it be just to compensate a man as if he had been employed for a further year or would have been employed for a further year if, for example, he had died in the meantime? Post-dismissal events are very often irrelevant, but if the dismissal, properly regarded, is at the expiry of the notice, rather than at the giving of the notice, that rule of course does not preclude events after 1 July being looked at in the case before us. The courts are thoroughly familiar with determining whether an employee would have been dismissed in any event and with assessing the likelihood of that happening; the well known Polkey case in the House of Lords is an example.In our view there was here an error of law at the compensation stage. The Industrial Tribunal was wrong to regard the contract as having terminated on 1 July 1996. At first blush the contract continued to 31 December 1996. We say at "first blush" because we do not know the intervening events which were given in evidence to the Industrial Tribunal and Mr Nicholson for the Respondent, Mr Gidney, before us has been in difficulty, not of his own creation, because he had thought that the Chairman's notes or, at any rate, fuller papers from the original hearing would have been in front of us. Unhappily they are not, and that has somewhat circumscribed his argument, but it is an unusual feature of this case that his case also is that 1 July is not the correct date. He would say that 5 July was the correct date and he gets to 5 July by looking at events after 1 July to find out precisely what was said and done between the parties. Well, we have no findings on that subject and it is quite impossible for us to detect errors of law where there is no material whatsoever.The proper course, as it seems to us, is to leave the finding of constructive dismissal and unfair dismissal unaffected, but to set aside the quantification of compensation on the basis that it was arrived at on an error of law, namely that the contract ended on 1 July. That was an error of law. We do not say what the correct date was. We say only that on the face of things the contract ended on 31 December 1996 but that it would be open to the Industrial Tribunal to find some other date for the termination of the contract.We remit the matter to the same Industrial Tribunal, but it will be able to receive such evidence as the parties wish to adduce as to matters arising on and after 1 July 1996. They can adduce such material as is relevant to the question of what benefit was it that Mr Gidney might reasonably be expected to have had but for his dismissal, on whatever date it is ultimately found to be the date of dismissal. If, evidence is given that there were material breaches by Mr Gidney, then that can plainly affect whether he would have been dismissed in any event and that is a feature which the Tribunal dealing with the remitted case can cope with.There is here a cross-appeal by Mr Gidney, but in the event we do not need to deal with that. It is on the detail of the quantification that was here arrived at, but, once we have set aside the quantification and there is a clean slate, the parties can argue afresh about what is the appropriate amount.There was a further argument from Mr Lynch on the basis of the well known Meek v City of Birmingham District Council case but, as he succeeded on the first part of his case, we do not need to go into that either.The position is therefore that there is a risk to an employee, who is in a position to assert constructive dismissal, if he decides not to walk out but rather to give a notice taking effect in the future. We do not see that there is anything intrinsically unjust in that. If he wishes to receive the benefit of the contract of employment in the meantime, he can fairly be expected to have to observe and perform the burden of the contract. If he expects to enjoy the benefit then he can expect also to suffer the burden. There is nothing intrinsically unjust in such a system. So we merely remit the matter to the same Industrial Tribunal to hear quantification afresh, but we leave the finding of constructive dismissal and unfair dismissal unaffected, save as to its date.