Hanif v Secretary Of State For Trade & Industry [1998] UKEAT 1327_97_0807

EAT
Hanif v Secretary Of State For Trade & Industry
[1998] UKEAT 1327_97_0807 · 1998-07-08

JUDGE J HULL QC :

This is a case in which Mr Mohammed Hanif appeals to us from a decision of the Industrial Tribunal sitting at Leeds under the Chairmanship of Mr Morris on 3 September 1997.By their decision, registered on 29 September, they said that Mr Hanif's contract of employment with a firm called J H Walker Ltd had been frustrated by Mr Hanif's long term chronic illness. The history of the matter is as follows:He was first employed on 23 February 1983 in an occupation which he refers to as that of 'Stentor'. The Respondents were a textile fabric firm. On 9 January 1992 Mr Hanif went off work with knee pain and he had to suffer various operations and from that day until the company eventually went into administrative receivership on 3 December 1996, he never returned to work.When the administrative receivership came into operation he, Mr Hanif, applied, as he was entitled to under the Employment Rights Act, to the Secretary of State for his redundancy payment. The Secretary of State resisted that by saying that there was in fact no contract of employment in reality because it had been frustrated by the long term illness of Mr Hanif.The doctrine of frustration is not a perfectly straightforward one. If something develops without the fault of either party which has the effect of permanently preventing the implementation of the contract or - if it is to be implemented - it is something quite different from what the parties bargained for, something unforeseen, then it operates to avoid the contract by operation of law. The parties need do nothing. It was summed up by Lord Radcliffe in one of the leading cases in a Latin phrase; each party is entitled to say as a result of what has happened, without their fault:
"non haec in foedera veni", which in English means "this is not the bargain I made, it has become something quite different"
. In any case it must, of course, be a question for the tribunal of fact to say whether it appears to them that the contract has been frustrated. This Tribunal did say that.They said, with regard to the relationship which undoubtedly persisted with the employers - they were of course no longer paying him any salary, they kept in touch with him in a very routine way by occasional standard letters - they say:
"6. Whether or not a contract of employment is frustrated, in that it is impossible of performance, is a matter for the tribunal. It must stand back and look at the facts and as it is a matter which does not have to be brought about by any action of the contracting parties, it is a matter which is simply something that has happened by operation of law..."
They went on in the next paragraph:
"7. Here we have a protracted period of illness, which is not the sort of short to moderate length dealt with by the reported cases cited to us. It is nearly five years and during that five years it has been impossible for the applicant to perform his contract of employment..."
One could add, as Mr Prout very frankly acknowledged to us, that it had been said by the doctors that there was no prospect of his returning to work. The Tribunal go on;
"It is clear from that, that at some time in that period, the tribunal must say that the Contract of Employment has been frustrated"
They go into the fact that he was still on the books, they contrast the time that he has been off work with the time that he was with the company: I am sure they were quite right to do that, the considerations for an employee who has been employed for a substantial period or an employee who has only been with the company a short period may be very different. The Tribunal came to the conclusion that the contract had come to an end through frustration and the claim against the Secretary of State therefore failed.Mr Prout has said that the Tribunal did not pay sufficient attention to the intent of the parties and he said that sickness is indeed contemplated by a contract of employment and the employer could have dismissed the employee here with notice. The fact is that the Tribunal appears to us to have paid sufficient attention to a short question which was put before them. This was a fairly extreme case. As to what Mr Prout says, that a contract of employment nowadays does, or certainly should, contemplate sickness, of course it does, but not sickness on this scale, sickness with this disastrous result that the man is never expected to engage in manual labour again. In those circumstances, in our view, the Tribunal was perfectly entitled to reach the conclusion they did as a matter of law. Whether it was the right conclusion of course is a matter for them and not for us. It is a question of fact.Therefore, in spite of what is said by Mr Prout, we do not think that this appeal can possibly succeed and we have to say it must be dismissed at this stage.