MR M I WHITELY v MARTON ELECTRICAL LTD [2002] UKEAT 0841_01_2611

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2002] UKEAT 0841_01_2611

Case No Appeal No. EAT/0841/01

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

MR M I WHITELYAPPELLANT

MARTON ELECTRICAL LTDRESPONDENT

Before

Mr Recorder Underhill

Date 26 November 2002

[1]APPEARANCES For the Appellant MR BRUCE CARR (Of Counsel) Instructed by: Messrs Rowley Ashworth Solicitors 247 The Broadway Wimbledon London SW19 1SE For the Respondent NO APPEARANCE ON BEHALF OF RESPONDENT MR RECORDER UNDERHILL QC This is an appeal against the decision of an Employment Tribunal at Thornaby on Tees dismissing the Appellant's claim for damages for early termination of the contract under which he was engaged by the Respondents (save in respect of one week's pay). The Appellant was represented before us by Mr Bruce Carr of counsel, instructed by the Appellant's trade union, Amicus, who regard the appeal as raising an important point relating to the rights of workers engaged under the terms of modern forms of apprenticeship agreement. The Respondents did not appear, but their solicitors put in written submissions which we have taken fully into consideration.

[2]The Appellant was engaged by the Respondents on 25 October 1999 under what was known as a "Modern Apprenticeship Pact". This is a standard-form agreement promoted by National Training Organisations (and in this particular case by National Electrotechnical Training), embodying the principles and procedures set out in a "Modern Apprenticeship Framework". The Pact is entered into and signed by three parties - the "Apprentice" himself (here, the Appellant), the "Employer" (here, the Respondents), and a local Training and Enterprise Council (here, Tees Valley Tec Ltd - "the TEC"): where, as here, the Apprentice is a minor the Pact is also signed by his or her parents. The broad concept is that the Employer undertakes to train the Apprentice in the relevant skills (in this case as a qualified installation electrician), as in a traditional apprenticeship, under the general supervision of the TEC. There may also be involved, though not as a party to the Pact, a "training provider": in this case there was a training provider called JT Ltd.

[3]Clause 2.2 of the Pact provides that:

"The Apprentice agrees to: ... subject to the Modern Apprenticeship Framework be an employee of the employer and comply with the employer's terms and conditions of employment for the duration of the Apprenticeship Training Plan."

Clause 3.2 provides that:

"The Employer agrees to: ... subject to the Modern Apprenticeship Framework employ the Apprentice for the duration of the Training Plan."

[4]As a result of a downturn in orders, the Respondents dismissed the Appellant with effect from 2 June 2000. He was eventually able to find a new apprenticeship, but not until September 2000. In these proceedings he claims that the Respondents were not entitled to dismiss him until the conclusion of his training (save in particular circumstances which do not apply here). Accordingly he claims damages in respect of his loss during the period between June and September, under the Tribunal's breach of contract jurisdiction. The Respondents contend that the Appellant was entitled only to one week's notice of dismissal. They refer to paragraph 6 of their standard-form terms of employment, which provides for them to give one week's notice to employees with less than two years' service.

[5]The Tribunal determined the issue as to the requisite notice in the Respondents' favour. Because the Respondents had not in fact paid in respect of even one week's notice, it awarded the Appellant £67.87; but the substantial part of his claim was dismissed. (The formal Decision of the Tribunal characterises the part of the claim on which the Appellant succeeded as a claim for "breach of contract (notice monies)" and the second part as a claim for "wrongful dismissal". It seems to us that in law both claims are in fact of the same character, namely a claim for damages for wrongful termination of the contract; but nothing turns on this.)

[6]On the face of it, the provision of clause 3.2 set out in paragraph 3 above clearly supports the Appellant's claim. It requires the Employer, in terms, to employ the Apprentice "for the duration of the Training Plan". However, the Respondents make what are essentially four distinct points.

[7]First , they point to the fact that the term of the contract is not in clause 3.2 expressed as a fixed period of time. They submit (in effect) that that renders it too uncertain to be enforceable. As paragraph 6 of the Framework makes clear:

"As the Modern Apprenticeship is outcome based, an Apprentice is not obliged to serve a set period of time, but can complete the Apprenticeship as soon as they are capable of demonstrating the required competences."

The standard-form training records indicate that it was expected that the Appellant's Apprenticeship would be completed in October 2004, but it could in principle have concluded either earlier or later than that date depending on the Appellant's progress. However, in our view that uncertainty as to when the Apprenticeship would in fact end does not connote any conceptual uncertainty. Mr Carr submitted, and we accept, that when the Training Plan ended would be capable of being objectively determined. There is no reason in principle why a contract should not be determinable on the happening of a certain event, even though the date of that event may not be certainly predictable.

[8]Secondly , the Respondents submit that a provision requiring an employer to retain an employee for a period likely to be as long as five years is a commercial nonsense. They reinforce that submission by pointing out that there is no certainty that the Training Plan would have concluded even then: they submit that if the Appellant, through honest incapacity rather than any misconduct or lack of application, was unable to attain the required competences by the end of five years the Training Plan would have to be extended indefinitely.

[9]If this were an ordinary contract of employment, that submission would have great force. But Mr. Carr submits that it is plainly not an ordinary contract of employment: it is in law a contract of apprenticeship, which is a different animal. He refers us to the decision of Sedley J in Wallace v. CA Roofing Services Ltd

[1996] IRLR 435

, which confirms that contracts of apprenticeship are distinct in character from contracts of employment and are terminable only on the conclusion of the agreed period of training and not by prior notice, whether by reason of redundancy or otherwise (save where the employer's business closes or undergoes a fundamental change in its character). In our view Mr Carr is almost certainly right. The Pact explicitly and consistently uses the language of apprenticeship, and it is obviously intended to achieve, with some adaptation to modern conditions, the same purpose as an old-fashioned apprenticeship contract. The only possible distinction from Wallace is the express, and notably formal, provision in the Pact that the Respondent was to "employ" the Apprentice and that the Apprentice was to "be an employee of the employer and comply with the employer's terms and conditions of employment". It could be argued that that phraseology was intended to connote what used to be called a relationship of master and servant, which would be inconsistent with the existence of a contract of apprenticeship. It is, however, in our view unnecessary to resolve the question definitively for the purpose of this appeal, and since we have not heard oral argument on both sides we prefer not to do so. Whether or not the Pact is formally to be characterised as a contract of apprenticeship, its terms make it clear that it is very different from an ordinary contract of employment. It is a contract one of whose principal purposes, if not the principal purpose, is the training of the "Apprentice". The employer undertakes much wider responsibilities than he would towards an ordinary employee - in return, no doubt, for perceived advantages, which presumably include (though Mr Carr was not in a position to elucidate this aspect to us) a degree of funding. In these circumstances, we see nothing inherently surprising in the contract being for so long a duration: it might indeed be argued that it was necessary for the scheme that it should be so. Nor are we troubled by the possibility that if the Apprentice did not progress as expected the duration of the contract might be even longer: if the Apprentice were unable to make the necessary progress, we have no doubt that sooner or later a point would come when those responsible for his training could properly bring it to an end.

[10]There is the further point that the risk that the obligation might prove onerous if the employer suffers an unexpected downturn in work is mitigated by clause 4.5 of the Pact, which provides as follows:

"... [I]f the employer is unable to complete the Apprenticeship, the TEC shall liaise with the employer and/or training supplier to assist in finding the Apprentice the opportunity to complete his or her Apprenticeship elsewhere."

That is indeed what happened in the present case, although the process took some weeks.

[11]That brings us to the Respondents' third point, which is that clause 4.5 of the Pact, which we have just set out, shows that the agreement contemplates that the employer may not be able to complete the apprenticeship. That is no doubt so, but the fact that an agreement may provide for what shall happen in an eventuality which would be a breach of contract does not mean that it is any the less a breach.

[12]Fourthly , the Respondents refer to the fact that clause 2.2 provides for the Apprentice to "comply with the employer's terms and conditions of employment". As noted in paragraph 4 above, the document embodying the Respondents' terms which was before the Tribunal provided for employees with the Appellant's length of service to receive no more than one week's notice of dismissal. It is not in fact entirely clear whether the Tribunal found that the Appellant had ever received a copy of this document. The copy in the bundle before us, which we assume is the same as that which was before the Tribunal, is a specimen and is unsigned. The Tribunal states at paragraph 5 of the Reasons:

"As the applicant had been employed for over one month, but for less than one year, he was entitled, in accordance with the Employment Rights Act Section 86 and in accordance with his contract of employment to one week's notice pay [our emphasis]"

But there is no express finding as to how the terms came to be incorporated. However, even assuming in the Respondents' favour that the Appellant did indeed receive and sign a copy of the terms, it is clear to us that where any of their provisions are inconsistent with those of the Pact, the provisions of the Pact must prevail. It is plainly the Pact which the parties intended should govern their relationship: the cross-reference to the terms and conditions of employment is entirely general and can reasonably be taken as intending simply to incorporate other terms and conditions relating to matters which could not be covered in a standard-form, indeed industry-wide, document such as the Pact.

[13]For these reasons, we are of the opinion that the only conclusion open to the Tribunal in law, on the material before it, was that the Respondents were not entitled to dismiss the Appellant when they did.

[14]The Tribunal's reasoning in reaching the contrary conclusion is not entirely clear. But, so far as we understand it, it appears to have been three-fold. First, it relied on the fact that the completion of training was not defined by reference to a fixed date but only to the employee achieving the appropriate competences. We have dealt with this point in paragraph 7 above. Secondly, it relied on paragraph 6 of the Respondents' "terms and conditions". We have dealt with this in paragraph 12. The third point, however, we have not yet dealt with.

(e) of which stated as follows:

"An employer may not discharge nor declare redundant an apprentice because of lack of orders. The employer may, with the consent of the apprentice and his guardian, apply to the managing agents to find another employer willing and able to continue the training but until such a transfer has been arranged and registered with the JIB the present employer remains responsible for ensuring that all of his obligations to the apprentice are fulfilled."

We are unclear exactly what relationship, if any, the JIB scheme has to the scheme embodied in the Modern Apprenticeship Pact; but the Tribunal found in any event that that document had never been drawn to the attention of the Respondents and was not referred to in any of the contractual documents. In those circumstances it held, plainly correctly, that the provision in question could not be binding on the Respondents. But that merely demolished a particular argument which had been advanced on the Appellant's behalf. It had no impact on the case based on the actual terms of the Pact signed by the parties. It rather looks as though the Tribunal failed to appreciate this and treated its conclusion on this particular point as fatal to the Appellant's case as a whole. If so, it allowed its eye to be taken off the ball.

[15]The provision of the Joint Industry Board Scheme is not, however, wholly irrelevant. It is useful at least as demonstrating that the construction which we have placed on the terms of the Pact is not unique or outlandish.

[16]It follows that this appeal must be allowed and a declaration made that the Respondents are obliged to pay damages to the Appellant in respect of his loss for the period between his dismissal and the start of his apprenticeship with his new employer. The amount claimed appears to be in the region of £1,000. We would hope and expect that the sum should be capable of agreement. In the unlikely event that it is not, there will have to be a further hearing before the Tribunal to determine quantum. There is no reason why that hearing should not be before the same Tribunal. Nor however is there any compelling reason why it need be: we leave that question to be decided by the Regional Chairman, should it arise, as may be most convenient.