MANOR HOUSE HEALTHCARE v 1) MRS A HAYS 2) MRS S SKINNER [2000] UKEAT 1196_99_2102

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2000] UKEAT 1196_99_2102Case No Appeal No. EAT/1196/99Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MANOR HOUSE HEALTHCAREAPPELLANT1) MRS A HAYS 2) MRS S SKINNERRESPONDENT
Before
His Honour Judge CollinsDate 21 February 2000
[1]APPEARANCES For the Appellant Mr. M. Whitcombe (of Counsel) Messrs Paisner & Co Solicitors Bouverie House 154 Fleet Street London EC4A 2JD JUDGE COLLINS : This is the preliminary hearing of an appeal against the decision of an employment tribunal sitting at Bury St. Edmunds. The extended reasons were promulgated on 28 July 1999. The tribunal dismissed the complaints of Mrs Hays and Mrs Skinner under the Equal Pay Act 1970. It was those complaints which had taken up the major part of the hearing before the tribunal.[2]However, having dismissed those complaints, they held that the appellants were in breach of contract by failing to pay bonuses to Mrs Hays and Mrs Skinner. They awarded damages for breach of contract of £1,500 to Mrs Hays and £2,500 to Mrs Skinner. There had been complaints of sex discrimination but they were not proceeded with.[3]By the notice of appeal dated 8 September 1999, the appellants allege that the tribunal misdirected itself in law in holding that there was an implied term of the contract, proceeding from the fundamental obligation not to do anything which would undermine the relationship of trust and confidence between employer and employee, that the employers would not unreasonably change their mind about the payment of bonuses. It is also a matter of complaint which is supported by an affidavit handed to us today, sworn by the advocate who has conducted the matter on behalf of the appellants at the hearing, that the tribunal decided the case on the basis of such a term without giving an opportunity to address them on that basis.[4]The appellants' case was that the bonus payments were discretionary and that there was no contractual entitlement to them. The tribunal dealt with the point at paragraph 28 of the decision. They accepted that the respondents had no right to a specific sum by way of a bonus. That conclusion was inevitable because the particulars of employment which are set out in paragraph 14 of the tribunal's reasons say specifically that:
"There may be a bonus applicable to this position which will be paid in accordance with the relevant documentation and at the discretion of the chief executive … The society may change or cancel any bonus arrangements without notice or financial recompense."
[5]So on the face of it, not only were the appellants completely free to decide what bonus there should be, they were also free to change or cancel the arrangements once they had made them. The tribunal, having decided that there was no contractual agreement for a specific bonus, asked themselves at paragraph 30 whether the chief executive could change his mind prior to communication of the specific amount of the bonus. They was because the chief executive of the appellants had decided by 6 December what payment would be made to Mrs. Hayes and Mrs. Skinner and it appears that the decision not to pay was because they both decided to leave.[6]The tribunal's analysis at paragraph 31 was that there was an implied term that the employers would not carry out any acts calculated to undermine the trust or confidence which should exist between employer and employee. They continued by holding that in breach of that implied term the appellants had changed their mind about giving a bonus to the respondents just because the respondents had given their notice. They held that was a breach of contract and that damages should be the same as the sums which had been determined as the amount of the bonuses.[7]Attractive though that argument may be, it seems to us clearly arguable that it was mistaken. It is a general principle of law as pointed out in Mr. Whitcombe's skeleton argument paragraph 4, that where a contract makes express provision, it is inadmissible to construct an implied term to the contrary effect and that is in effect what the tribunal did. Accordingly it seems to us that there is a clearly arguable point of law on the question raised in the notice of appeal.