MS M FITZGERALD v UNIVERSITY OF KENT AT CANTERBURY [2003] UKEAT 0474_02_1305

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2003] UKEAT 0474_02_1305Case No Appeal No. EAT/0474/02Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MS M FITZGERALDAPPELLANTUNIVERSITY OF KENT AT CANTERBURYRESPONDENT
Before
His Honour Judge Peter Clark Mr A E R Manners Mr H SinghDate 13 May 2003
[1]APPEARANCES For the Appellant MR RICHARD DAVISON (of Counsel) Instructed By: Messrs Royds Treadwell Solicitors 2 Crane Court Fleet Street London EC4A 2BL For the Respondent MR MICHAEL DUGGAN (of Counsel) Instructed By: Messrs Furley Page Solicitors 39 St Margaret's Street Canterbury Kent CT1 2TX HIS HONOUR JUDGE PETER CLARK : This is an appeal by Ms Fitzgerald, the Applicant before the Ashford Employment Tribunal, against that Tribunal's decision, promulgated with extended reasons on 28 March 2002, dismissing her complaint of unfair dismissal brought against her former employer, University of Kent at Canterbury (the Respondent) on the ground that it was time-barred. The Facts[2]The Applicant was employed by the Respondent as a lecturer from 1 July 1995. On 28 November 2000 she applied for early retirement on ill-health grounds. On 22 February 2001 that application was approved. On 1 March 2001 the Respondent's standard form was completed showing the Applicant's date of leaving as 28 February; on the same date Miss Conway of Personnel wrote to the Applicant saying that "The University is assuming that the date of retirement should be 28 February 2001". The Applicant received that letter the following day and on that day, 2 March, she e-mailed her colleagues saying:
"Dear Colleagues My recent application to take early retirement on the grounds of ill-health has been accepted and I am writing to advise you that as of February 28 th I am now a retired person."
[3]She was paid up to 28 February and her retirement benefits were calculated from that date.[4]As at that date she had an outstanding grievance against a decision taken by the University Senate on 29 November 2000 that her University appointment be not confirmed because she had not satisfactorily completed her probationary period. On 5 March the relevant sub-committee rejected that grievance in a determination which acknowledged that non-confirmation of her appointment had been overtaken by her retirement through ill-health as from 28 February 2001.[5]On 9 March 2001 she signed a form required by the University's Superannuation Scheme Ltd (USS) which administered the relevant pension fund. That form showed the date of retirement as 28/02/01 and at the foot of the form was a "declaration by member"; "(1) I confirm that I am retiring from this institution on the date shown above and understand that benefits are being established in the category shown overleaf."[6]On 29 March 2001 USS wrote to the Applicant giving her details of the pension and tax-free lump sum. That letter stated:
"The purpose of this letter is to give you information about the benefits payable to you from the Scheme following your retirement on 28 February 2001."
The Tribunal Decision[7]At all relevant times the Applicant was represented by her Trade Union and Solicitors. Her form IT1 was not lodged until 1 June 2001. If the effective date of termination of the contract of employment (EDT) was 28 February the claim was presented out of time and it was not contended by or on behalf of the Applicant that it was not reasonably practicable to present the complaint within time. Thus the first issue for the Tribunal to decided was, what was the EDT, applying section 97(1) of the Employment Rights Act (ERA) 1996? The Tribunal, having directed themselves to the relevant EAT authorities Crank v Her Majesty's Stationery Office [1985] ICR 1 (Peter Gibson J presiding), followed in Lambert v Croydon College [1999] ICR 409, a case in which I delivered the judgment of the EAT, concluded that the EDT was that agreed between the parties, 28 February 2001, albeit retrospectively. Accordingly, the claim was time-barred.[8]Having so found the Tribunal deemed it unnecessary to deal with a further preliminary issue, namely whether the Applicant was dismissed or whether the employment was terminated by mutual consent. For the purposes of this appeal only we shall assume that a dismissal took place, whilst appreciating that that issue remains unresolved, so that if the appeal succeeds the question of dismissal will require determination by an Employment Tribunal on remission. The Appeal[9]In advancing this appeal Mr Davison acknowledges that the combined effect of the EAT decisions in Crank and Lambert supports the proposition first that the parties to a contract of employment may agree a retrospective EDT and secondly that such agreement is not invalidated by the provisions of section 203 ERA. To that extent the Tribunal in this case permissibly followed binding EAT authority.[10]However, he submits that those cases were wrongly decided. The position is that we are not bound by previous EAT decisions although in the interests of comity we would normally follow a line of authority which is well-settled at this level (it not being a case of previous inconsistent EAT decisions) unless it can be shown that those earlier decisions were decided without full argument; per incuriam .[11]Mr Davison takes essentially two points. First he invites our attention to the statutory framework into which the concept of EDT must be fitted.[12]Section 95(1) ERA circumscribes the circumstances in which an employee is to be treated as dismissed by her employer for the purposes of Part X of the Act (unfair dismissal). As we have indicated we must make the assumption that the Applicant was dismissed in this case in the absence of a finding on this issue by the Tribunal. Neither section 95(1)(b) or (c) arises; accordingly we make the assumption that her contract was terminated by the Respondent, and that was termination without notice under section 95(1)(a). Notice involves an EDT at some time in the future. Here the issue concerns a retrospective EDT.[13]Section 97(1) provides that the EDT "(b) in relation to an employee whose contract of employment is terminated without notice, means the date on which the termination takes effect."[14]Mr Davison submitted that the wording of section 97(1)(b) was not particularly apt on the facts of this case. He argued that the question for the Tribunal, being one of fact, was not what date, if any, has been agreed between the parties, but at what point in time did the relations between the parties cease to be governed by a contract of employment?[15]Pausing there, we accept Mr Duggan's submission that the statutory question for the Tribunal can only be that raised by section 97(1)(b) in circumstances where the dismissal consists of a termination by the employer without notice under section 95(1)(a).[16]The issue, under section 97(1)(b), is whether as a matter of fact the EDT may be a date retrospectively agreed between the parties.[17]Mr Davison submits that it cannot be a date retrospectively agreed in the following circumstances. First, continuity of employment. It is well-settled law that the parties cannot by agreement treat a period of employment as continuous if it is not continuous applying the relevant statutory provisions. Secretary of State for Employment v Globe Elastic [1979] ICR 706. Hanson v Fashion Industries (Hartlepool) Ltd [1980] IRLR 393.[18]Continuity of employment is dealt with in Part XIV, Chapter 1 ERA. By section 210(1):
"References in any provision of this Act to a period of continuous employment are (unless provision is expressly made to the contrary) to a period computed in accordance with this Chapter."
By section 211(1) "An employee's period of continuous employment for the purposes of any provision of this Act - (a) ... begins with the day on which the employee starts work, and (b) ends with the day by reference to which the length of the employee's period of continuous employment is to be ascertained for the purposes of the provision." By section 212(1) "Any week during the whole or part of which an employee's relations with his employer are governed by a contract of employment counts in computing the employee's period of employment."[19]The relevant provisions of the Act (see section 211(1)(b)) to which Mr Davison draws our attention are those concerning the qualifying period (and age) for the right not to be unfairly dismissed (ss 108-9): the amount of the basic award (section 119); the qualifying period for requesting written reasons for dismissal (section 92(3)) and finally, of direct relevance to the present case, the primary date by which an Originating Application complaining of unfair dismissal must be presented to an Employment Tribunal (section 111(2)(a)).[20]What each of those provisions has in common is that the end date of the relevant period is the EDT and that date, we accept, must be the same in each case, that is the date as defined, for present purposes, by section 97(1)(b).[21]Mr Davison contends that a retrospectively agreed EDT offends, in particular, section 212(1). On the facts of this case, he submits, the Applicant's relations with her employer were governed by a contract of employment after 28 February. The earliest date on which it could be said that the parties agreed the ending of the contract was 2 March; it may have been later. Until that date the contract remained in existence. The period 28 February – 2 March (or later) counts in computing her period of employment by virtue of section 212(1). The parties cannot abridge that time by agreement, thereby extinguishing a period of continuous employment.[22]We reject that submission, preferring the approach of Mr Duggan which is to this effect. The governing provision as to continuity is contained in section 211(1)(b). The end date, in each of the examples listed earlier, is the EDT as defined in section 97(1)(b). If the period of continuous employment, calculated in accordance with section 211(1)(a) and (b) involves a "part week" of employment, that week counts as part of the period of continuous employment for all relevant purposes. However, it cannot extend the employment beyond the EDT for those purposes, including limitation under section 111(2)(a). Thus, all roads lead back to the proper construction of section 97(1)(b). If the EDT can be retrospectively agreed that will not offend the continuity provisions, which expressly provide for the EDT as the end date for an employee's period of continuous employment under section 211(1)(b). Where the parties retrospectively agree the date on which the contract ended that is the EDT.[23]Mr Davison secondly relies on the provisions of section 203 ERA. He accepts that section 203(2)(f), which disapplies section 203(1) where a compromise agreement, complying with section 203, contains an agreement to refrain from instituting or continuing proceedings under the Act (including a complaint of unfair dismissal), is not engaged on the facts of this case. To that extent he does not quarrel with my analysis in Lambert , page 415 B – D. However, he takes a different point to that considered in Lambert .

(a) :

"Any provision in an agreement (whether a contract of employment or not) is void in so far as it purports - (a) to exclude or limit the operation of any provision of this Act."
[24]Examples of the operation of that provision relied on by Mr Davison include an agreement by an employee to shorten a period of notice given by the employer designed to avoid the introduction of the Wages Act 1986, Staffordshire County Council v Employment Secretary [1989] ICR 664; a new contract following a break in employment which purported to exclude the statutory continuity provisions, Hanson v Fashion Industries (Hartlepool) Ltd and an agreement purporting to exclude an employee's right to a trial period under the redundancy provisions contained in the Act, Tocher v General Motors (Scotland) Ltd [1981] IRLR 55. Each were held to offend what is now section 203(1) (formerly section 140 Employment Protection Consolidation Act 1978)[25]In the present case Mr Davison accepts that the agreed termination date of 28 February did not exclude the Applicant's right to bring a complaint of unfair dismissal by virtue of the provisions of section 111(2)(a); rather he submits that it limited that right by reducing the primary limitation period to less than three months when taken from the date of the actual agreement between the parties to back-date the termination of the contract.[26]We return to a comment which we made earlier. All roads lead back to section 97(1)(b). What was the EDT? If, in this case, it is 28 February then no relevant provision of the Act is excluded or limited. That is the end date for the purposes of limitation, continuity and the calculation of the basic award in accordance with the relevant statutory provisions.[27]The fallacy in Mr Davison's submission on this part of the appeal, it seems to us, is to assume that the true EDT is the date on which agreement was reached, in which case the earlier date agreed would limit or exclude the operation of those provisions. However, in our view, an agreement as to the EDT is no different from the parties agreeing a consensual termination of the contract. On one level that agreement may be said to exclude a dismissal within the meaning of section 95(1); it does; without a dismissal the employee has no right to complain of unfair dismissal under section 94(1). However termination by mutual consent has never been regarded as offending section 203(1). See e.g. Birch v University of Liverpool [1985] ICR 470 (CA). It is otherwise where the employee agrees a term of the contract of employment that the contract will automatically terminate upon a specified event occurring, e.g. his failure to return from a period of concessionary leave. See Igbo v Johnson Matthey Chemicals [1986] ICR 505 (CA). In our judgment agreement as to the EDT falls into the same category of cases, not touched by section 203(1), as the consensual termination cases. Thus an agreement which has the effect of terminating the employment by mutual consent defeats a claim for unfair dismissal; but if that agreement goes on to purport to exclude the employee's right to bring a complaint of unfair dismissal before the Tribunal that provision will be void unless the strict rules as to compromise agreements laid down in section 203 have been met.[28]In these circumstances we are not persuaded that we should depart from the principles laid down in Crank and in Lambert . Further, there are practical reasons for continuing to take the line that parties may agree a retrospective EDT, just as they can agree an extended period of notice. Mowlem Northern Ltd v Watson [1990] ICR 751. This situation arises most commonly where, as here, the employee wishes to take early retirement on grounds of ill-health in circumstances where he then becomes entitled to an early pension. It will often be in the interests of the employee whose entitlement to contractual or statutory sick pay has already ceased, to arrange for back-dated termination of the contract to allow pension payments to be back-dated. It would, in these circumstances, we think, be artificial to treat the retrospective ending of his contract of employment for pension purposes as different from the EDT for the purposes of section 97.[29]Accordingly and for these reasons we shall dismiss this appeal. Permission to Appeal[30]At the close of oral argument both Counsel made protective applications for permission to appeal to the Court of Appeal, depending on our decision, judgment having been reserved. Whilst we have concluded that the earlier EAT authorities should be followed we acknowledge that this is an area not without controversy. We shall therefore accede to Mr Davison's application and grant permission to the Applicant to appeal against our order dismissing the appeal. The short point for the Court of Appeal is whether parties to a contract of employment may retrospectively agree an EDT for the relevant statutory purposes.