MR A M DONLON v CITY OF WAKEFIELD M D C [2002] UKEAT 1431_01_0511

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2002] UKEAT 1431_01_0511Case No Appeal No. EAT/1431/01Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR A M DONLONAPPELLANTCITY OF WAKEFIELD M D CRESPONDENT
Before
His Honour Judge J McMullenDate 5 November 2002
[1]APPEARANCES For the Appellant MR COLIN BOURNE (of Counsel) UNISON Employment Rights Unit 1 Mabledon Place London EC1H 9AJ For the Respondent MR RAPHAEL COHEN (of Counsel) City of Wakefield MDC Town Hall Wakefield West Yorkshire WF1 2HQ HIS HONOUR JUDGE J MCMULLEN QC This case is about the effective date of termination for the purposes of making a claim of unfair dismissal within the period of three months prescribed by the Employment Rights Act 1996 . We will continue to refer to the Parties as Applicant and Respondent. It is an appeal by the Applicant against the decision of an Employment Tribunal sitting at Leeds, Chairman Mr C T Grazin, promulgated with Extended Reasons on 23 October 2001. The decision was on a single preliminary point. There is also a cross-appeal by the Respondent which we will come to in due course. The Respondent was represented at the Employment Tribunal and the Applicant represented himself. Today they are represented respectively by Mr Bourne and Mr Cohen, to both of whom we owe thanks for the way in which they have presented what they have depicted as a unique case and which the Employment Tribunal has described as being a most unusual case.[2]The issue, defined by the Employment Tribunal, was whether there had been a dismissal within three months of the date of presentation of the Originating Application on 15 May 2001. The Tribunal decided that events which took place on 18 October 2000 constituted a dismissal; it therefore required the Applicant to present an Originating Application on or before 17 January 2001. It found that he did not, and did not allow an extension of time under the "not reasonably practicable" escape clause: Employment Rights Act 1996 section 111(2)[3]The circumstances were unusual because the Applicant did not contend that he had been dismissed on 18 October 2000, but on 2 March 2001. The Respondent contended that there had been no dismissal at any time, but in what might be described as its 'default position' it said this:
"…the Applicant was advised shortly after the decision of the Appeal Panel in October 2000 that he was not to return to his post at Hemsworth. In this respect even if the Tribunal finds that the Applicant's claim for unfair dismissal is valid the Respondent contends that it is out of time."
The Applicant contends in an appeal against the decision that there was no dismissal on 18 October 2000. The submissions have been set out in a Skeleton Argument and in oral submission to us today.[4]The Respondent is a local authority. The Applicant was employed by the Respondent (or its predecessor) as a Housing Manager from 1 April 1974 and has continuous service from that date. It was found by the Employment Tribunal that his particular contract of employment was terminated without notice on 18 October 2000.[5]The chronology of the events is illustrative. By his contract of employment, dated 8 April 1997, the Applicant was appointed as an Area Housing Manager (Hemsworth - South Elmsall). The Tribunal decided that there was no mobility built in to that term (the rest of which we need not cite). The Applicant does not challenge that decision. The Tribunal was asked to consider, as a preliminary issue, whether there had been an effective termination on 18 October 2000.[6]The Applicant was the subject of an internal investigation in October 1999 during the course of which he was suspended and transferred to other duties. He was suspended again on 28 January 2000. An internal disciplinary hearing was held from 20 – 31 July 2000 into four charges brought against the Applicant. As a result of these charges, a decision was taken to dismiss him on 31 August. The Applicant was entitled by his contract to appeal. On 2 August 2000 he did so. That appeal was before the Appeal Board of three Councillors. The decision of the board was to downgrade the findings of the earlier internal disciplinary panel from serious and gross misconduct, respectively, to misconduct, and to dismiss the final charge. The board recommended that the Applicant be given a final warning, to remain on his file for twelve months. The conclusion was recorded in a letter of 16 October 2000, sent by the board to the Applicant, and included the following:
"Your employment with the Authority is reinstated from 1 August 2000 and you will be notified by Housing and Social Care Management in due course of the arrangements for your return to work."
[7]The effect of that, both as a matter of language and as a matter of practice, we have been assured by both advocates today, was to regard the dismissal as having not taken place and to reinstate him in all respects as though he had never been dismissed on 31 August. All his previous rights were therefore intact, which, of course, corresponds with the statutory approach to reinstatement following an order of an Employment Tribunal. The Applicant, however, attended a meeting two days later (18 October 2000) with his Union representatives, UNISON, and management. A Minute of this meeting is headed 'Notes from a meeting ..' and is sub-headed as follows:
"Corporate management proposal"
A number of proposals are there made, including:
"1 Martin Donlon not to return to work as an Area Housing Manager within Housing. … 2 There is a mobility clause in Martin Donlon's contract which requires us to consult with him regarding a proposal to move him. This is what we are now doing. … 3 Martin Donlon is to be appointed to a permanent Service Manager post connected with options for the future of the housing stock. … 4 No other post will be held for Martin Donlon, but he obviously maintains a permanent contract at his current terms and conditions. … 6 What next? …"
Then some practical steps are set out because the Applicant was absent on sick leave for some of the period. The effect of that note has been the subject of the debate before the Employment Tribunal and before us.[8]What followed were discussions between the Applicant and his Union and further communications with the Council so that at the end of November the Councillors confirmed that the decision as to his reinstatement had no qualifications to it whatever. In 2001, the Applicant accepted the proposals made by the Officers and on 2 March 2001 claimed that the correspondence had indicated a determination of the relationship and it was upon that basis that he launched his Originating Application.[9]It will be noted that confirmation of the manager's proposal in October was by Councillors in March. In other words, Councillors made the decision to re-instate him and Councillors made the decision to change his terms and conditions which led to his Originating Application.[10]The Tribunal looked at the relevant provisions of the statute and made a decision that the contract of employment did not allow the Respondent to move him. The decision had been taken by Officers that the Applicant should not return to work. As a matter of fact, of course, the Applicant had been sick from September 2000 to April 2001. As the Tribunal noted, the Applicant might, to many people, be considered in the ordinary sense of the word, not to have been dismissed because even at the date of the hearing he remained an employee of the Council and had been paid throughout.[11]The Tribunal addressed itself to Section 95(1)(a) of the Employment Rights Act which says:
"(1) For the purposes of this Part an employee is dismissed by his employer if (and, subject to subsection (2) and section 96, only if) – (a) the contract under which he is employed is terminated by the employer (whether with or without notice), … (c) the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct."
The Tribunal decided that since there was no mobility clause the decision to not return him to his post represented a breach of contract and therefore a dismissal. The provisions of Section 97 deal with the effective date of termination. These are as follows:
"(1) Subject to the following provisions of this section, in this Part "the effective date of termination" – (a) in relation to an employee whose contract of employment is terminated by notice, whether given by his employer or by the employee, means the date on which the notice expires, (b) in relation to an employee whose contract of employment is terminated without notice, means the date on which the termination takes effect …"
The decision the Tribunal made in relation to Section 97 was that the effective date of termination had been 18 October and thus by reason of Section 111(2) the Tribunal had no jurisdiction to hear his complaint and, as we have indicated, it decided not to extend the period.[12]The Appellant's case is that the Employment Tribunal erred in deciding there was a dismissal. It was submitted that on 16 October the Respondent made clear that he could return to his job and arrangements were notified to him. A number of authorities were cited for the proposition that, if what the Respondent was doing was repudiating the contract, it required acceptance by the employee. The Respondent in this case did not unequivocally terminate the contract, as illustrated, for example, by its approach to the Notice of Appearance in this case which did not assert the primary case that there had been a dismissal. It was submitted that there is no authority for the Officers to change a decision of the Councillors and that the Applicant did not affirm the contract since as at all material times he was on sick leave.[13]Mr Cohen, for the Respondent, contended that the sole issue for the Employment Tribunal was to determine the effective date of termination. It did that as a matter of fact, and absent an allegation of perversity which succeeds, it should be left as it is. He accepts, as a matter of law the doctrine of repudiation requiring acceptance but that was not of assistance when dealing with the statutory terms and he relied on a number of authorities. The Officers had apparent authority to change the nature of the decision made by the Appeal Board and the Applicant had in any event affirmed the contract because he indicated he was going to work and did so. In any event, the Respondent indicated in its Respondent's answer to the Notice of Appeal that it had not been able to make submissions or present evidence in relation to its principal claim that there was no dismissal.[14]We have decided that the Applicant's case succeeds to the extent that we will set aside the decision of the Employment Tribunal that there was a dismissal. In order to allow the Respondent an opportunity to be heard we will say no more about the circumstances upon which an unfair dismissal claim might be built.[15]It is necessary for us, however, to return to the authorities which were cited for the various propositions. First, Thomas Marshall Exports Ltd v Guinle 1978 3All ER 193 at 204 a judgment of Sir Robert Megarry V-C, contains the classic doctrine that a repudiated contract requires to be accepted. The Vice-Chancellor referred to Howard v Pickford Tool Co Ltd 1951 1KB 417 and reminded himself of Lord Justice Asquith's aphorism that an unaccepted repudiation is a thing writ in water and of no value to anybody, it confers no legal rights of any sort. He went on to say:
"It seems to me quite impossible to add the gloss, except in master and servant cases, where an unaccepted repudiation is etched in granite and beautiful to the repudiator."
The case was itself a 'master and servant case' yet some gloss of this sort seems to be required if any doctrine of automatic determination is good law. He held it was not. In Robert Cort & Sons Ltd v Charman [1981] IRLR 437, Mr Justice Browne-Wilkinson, sitting with members in the Employment Appeal Tribunal, considered precisely the statutory language now before us, although in a different statute. He there gave a comprehensive review of the relationship between the contractual position and the position under the statute. Following the case of Dedman v British Building and Engineering Appliances [1973] IRLR 378, Mr Justice Browne-Wilkinson concluded that the drafting of the statute affected the doctrine of repudiation at common law because he said this:
"We will assume (without deciding) that the acceptance view is correct and that, where an employer dismisses an employee without giving the length of notice required by the contract, the contract itself is not thereby determined but will only be determined when the employee accepts the repudiation. Even on that assumption, we think that the effective date of termination for the purposes of s.55(4) is the date of the dismissal and not a later date. We reach this conclusion for the following reasons: (1) The decision of the Court of Appeal in the Dedman case is the only decision concerned directly with s.55(4) of the Act. In the other decisions, s55(4) is not, so far as we can see, referred to. (2) The Act seems to have been drafted on the footing that the unilateral view is correct, ie a dismissal even without the contractually required notice terminates the contract. Thus, in s.55(4)(a) (dealing with the case of termination by notice) it is the date of the expiry of the notice served which is the effective date of termination: nothing in the subsection suggests that this is so only where the length of notice served complies with the contractual obligation. …"
There is a citation from Winn LJ in Marriott v Oxford Co-operative Society [1970] 1QB 186 at 193 E-F, who said this:
"That is consistent with the whole concept that a contract of employment for the purposes of the statute is brought to an end, ie it is terminated, when it is so broken that no further full performance of its terms will occur ( our emphasis) "

Mr Justice Browne-Wilkinson then said this:

"This indicates that the date of the final termination of the contract is not necessarily 'the effective date of termination' or 'the relevant date': if, as in the case of repudiation, further full performance becomes impossible, that will be the relevant date. We consider it a matter of the greatest importance that there should be no doubt or uncertainty as to the date which is the 'effective date of termination'. An employee's right either to complain of unfair dismissal or to claim redundancy are dependent upon his taking proceedings within three months of the effective date of termination (or, in the case of redundancy payments 'the relevant date'). These time limits are rigorously enforced. If the identification of the effective date of termination depends upon the subtle legalities of the law of repudiation and acceptance of repudiation, the ordinary employee will be unable to understand the position. The Dedman rule fixed the effective date of termination at what most employees would understand to be the date of termination, ie the date on which he ceases to attend his place of employment."
Into that clear approach to the statute can be injected the approach of the House of Lords in Rigby v Ferodo [1988] ICR 29. In a speech given by Lord Oliver there is a careful presentation of opposing contentions in respect of the unilateral and the acceptance views. His Lordship, however, noted that there were good points on both sides and said this (at 34C):
"The contrary (and majority) view is that, whilst from a practical point of view a wrongful dismissal puts an end to the status of the dismissed employee as an employee and confines him to a remedy in damages for breach of contract (so that there will normally be little difficulty in inferring an acceptance of the repudiation), there is no reason in principle why, if the employee clearly indicates that he does not accept the employer's breach as a termination of contract, it should not remain on foot and enforceable so far as concerns obligations which do not of necessity depend on the existence of the relationship of master and servant. My Lords, there is much to be said for both views and the majority opinion in Gunton's case [1980] I.C.R. 755 has not been without its critics. But although it seems that one reason at least why the Court of Appeal here thought it right to grant leave to appeal to your Lordships' House was to afford an opportunity for a consideration of the correctness or otherwise of that majority opinion, the instant case is not on any analysis one of wrongful dismissal but is concerned with a very different state of facts, including the actual and intended continuation of the relationship of employer and employee without interruption."
In our judgment that is the key to understanding the present decision because, as in Rigby v Ferodo (a contract case) there was a continuation of the relationship of employee and employer without interruption pace the interregnum pending the reinstatement. So it was therefore that Lord Oliver went on:
"Whatever may be the position under a contract of service where the repudiation takes the form either of a walk-out by the employee or of a refusal by the employer any longer to regard the employee as his servant, I know of no principle of law that any breach which the innocent party is entitled to treat as repudiatory of the other party's obligations brings the contract to an end automatically."
He goes on to indicate the approach to this is driven by the innocent party's view of the contract breaker's action – see, for example, page 35A-C.[16]Applying that approach to the instant case, it would be odd if the decision, that this was a dismissal, were made on the basis of the secondary assertion by the Respondent that it had indeed dismissed the employee, and it would therefore be without notice. We prefer the view that it is for the innocent party in this hypothesis to control the decision as to what has actually occurred and for that to be examined by the Employment Tribunal. The Applicant, as we have indicated, did not assert that he had been dismissed on 18 October; the relationship continued. As a matter of practicality (because he was off sick) no confrontation was necessary. It was not necessary finally to resolve the practicalities of the proposal made by the Officers. We can well understand that no action was taken immediately, particularly as the Applicant, as the Tribunal has been at pains to point out, was in constant touch with his trade union.[17]Since this is to a very large extent a matter of construction, we are able ourselves to construe the proposal made by management by letter of 18 October 2000. We hold that this is what it says - it is a proposal, it is made by Officers of a different and junior status to those who made the decision on reinstatement which, as we have indicated, was unqualified. We therefore hold that since the relationship continued it is apt to apply the reasoning of Lord Oliver to such a situation. It is just as unnecessary for us for the purposes of this case, as it was for the House of Lords, to resolve the vexed question of which view of repudiation (unilateral or acceptance) is to be preferred. This case turns on the application of the law to its unique factual background. For that reason we consider that the Tribunal erred in its decision that there had been a dismissal and we set that decision aside. The case will be remitted to the Employment Tribunal, but not to consider as a preliminary point the jurisdiction issue of whether the claim was in time. Because claims are made of constructive dismissal it will be appropriate for the Tribunal to convene to hear the whole of the Applicant's case with evidence from the Respondent and then for it to decide, having heard all the facts and submissions, whether there has been a dismissal, constructive or otherwise, and whether it was unfair. At that stage it will also be able to decide if the jurisdiction point is maintained and whether or not the claim was in time.[18]We will remit this to either the same or a differently constituted Tribunal at the discretion of the Regional Chairman. This case is quite old and if it is more convenient for it to be heard by a differently constituted panel as the Regional Chairman sees fit, so be it.