Ebling Feres Ltd v Reed [1998] UKEAT 810_98_0710

EAT

Ebling Feres Ltd v Reed

[1998] UKEAT 810_98_0710 · 1998-10-07

MRS JUSTICE SMITH: This is the preliminary hearing of an appeal from a decision of an Industrial Tribunal sitting at London North on the 9 February 1998. The decision was promulgated on 9th June 1998. The Tribunal which comprised a Chairman sitting alone, ordered the Appellant, Ebling F(res Limited to pay to Mr Reed, the Respondent to this Appeal, the sum of £999.57 as monies due under a contract of employment, with interest payable at 8% from 13th April 1998 until payment. The Appellant's cross-claim against Mr Reed was dismissed.

Ebling F(res' usual business was the distribution of wrist watches. After a few weeks of consultation and association with Mr Reed in early 1997 they decided to embark on a wholly new venture, under the name 'Commercial World'. Mr Reed was employed as sales manager from 27th March 1997. The object of the new business was to introduce potential customers to the providers of professional services. There would be two stages to the operation. First, employees of Commercial World would survey the requirements of the businesses established in a particular area to find out what professional services those businesses needed. Mr Reed would then sell that information to the providers of those professional services for a fee. The purchasers would receive a list of potential customers.

Within a few weeks of March 1997 it became apparent that the business would not succeed and Ebling F(res dismissed Mr Reed. Mr Reed's claim to the Tribunal was first that he had not been paid a proper sum in notice. He also claimed unpaid commissions and motoring expenses.

The dispute on the first of these issues concerned the date on which Mr Reed had been dismissed. His case was that his employment had been terminated by a telephone call on the 23rd May 1997 and that he was entitled to a week's notice expiring on 30th May. The Appellant's contention was that he had been dismissed by letter on 16th May, and having worked for the ensuing week, had worked his notice. The contract therefore terminated on 23rd May and no notice money was payable.

The Industrial Tribunal heard evidence from Mr Reed and from Mrs Zoe Richmond, the wife of Mr Richmond, who has appeared before us this morning. At that time Mr and Mrs Richmond were both directors of Ebling F(res. Mr Richmond had been unable to attend the hearing due to illness. The Tribunal heard Mrs Richmond but they accepted Mr Reed's account and awarded one week's pay. That is a finding of fact with which we cannot interfere.

The second dispute concerned the payment of commissions. Mr Reed contended that commissions were payable when he made a contract with a customer; that is when his customer agreed to purchase a list of potential customers. The Appellants argued that if in the event a contract was not completed, no commission would be payable. Mrs Richmond claimed that all the commissions claimed by Mr Reed were in respect of contracts which had not been completed.

In his decision, the Chairman said this:

"Mr Reed's contract is basically contained in a letter to him from the Respondents dated 24 March 1997 in which they refer to "commission on your own sales", on which they enlarged in a letter to the Industrial Tribunals dated 15 August, where they wrote, "on sales Mr Reed was entitled to 10 per cent commission .... if a sale is not completed Mr Reed was informed that commissions would have to be reimbursed."

The Chairman continued ...

"I find that commission was payable on sales as and when contracts were made irrespective of whether the Respondents fulfilled the terms of the respective contracts. Subsequently after Mr Reed's contract had come to an end, and several months after the contracts were made, the Respondents chose to refund the monies paid by the customers. I am not satisfied that the purported change in Mr Reed's contract was adequately notified to him. It was the Respondents who terminated both his contract of employment and the contracts made with customers, and so brought about the repayment of the sums which they had received under the contracts."

Consequently, the Chairman ordered that commission should be paid in the sum of £270. That is a conclusion which the Chairman was entitled to reach, with which we cannot interfere.

Mr Reed also claimed £238.23 as car rental and insurance and £94 as the cost of using a mobile telephone for the business. That latter sum was agreed. There was no real disagreement before the Tribunal on the amount of those items. The dispute related to whether the date of termination had been on 23rd or 30th May and the Chairman having determined that issue in Mr Reed's favour, it followed that those sums were payable.

The Appellants cross-claimed for the whole of the costs that they had laid out in connection with the venture, by which they employed Mr Reed. They claimed this on the basis that he had mislead them into setting up the whole operation. Mr Richmond has not minced words before us today. He has said that Mr Reed was a plausible 'con man' and he duped Mr & Mrs Richmond into setting up this operation.

The Chairman heard the evidence and his conclusion was as follows:

"I find that the truth is that the Respondent's high hopes when they entered the contract were not realised and they lost confidence in Mr Reed. They regretted the expenditure which they had incurred in paying him and in connection with the work under the contracts, and they dismissed him and refunded the monies paid by customers. This was however a commercial agreement into which the Respondents entered with their eyes open and it was they who terminated the contract. The damages which they claim do not flow from any breach of contract on the part of Mr Reed. The employer's claim therefore fails."

Before us today, the Appellants are represented by Mr Richmond, who is a former director of the Appellant company. He is not legally qualified. He has explained his point of view carefully and courteously. It is based, upon his firm belief that Mr Reed had acted dishonestly throughout, and always knew that this operation was bound to fail. That point of view was no doubt advanced to the Industrial Tribunal. It may not have been advanced as persuasively by Mrs Richmond as it was advanced by Mr Richmond before us, but in any event it appears to us from the decision that the arguments were indeed advanced.

Essentially Mr Richmond complains about the Chairman's findings of fact. We have explained to him that this Employment Appeal Tribunal has jurisdiction only to correct errors of law made by the Tribunal. We can only interfere with findings of fact if there was no evidence upon which they could have been based, or if they were so unreasonable that no Chairman could have reached those conclusions. It is clear to us that there was evidence before this Chairman upon which he based his findings of fact, and it is also clear to us that it could not be argued that these decisions were perverse. In those circumstances, although Mr Richmond has argued his point courteously and carefully, this Appeal must be dismissed at this preliminary stage.