HATTON LOGISTICS LTD v MR M J WALLER [2006] UKEAT 0298_06_0310

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2006] UKEAT 0298_06_0310

Case No Appeal No. UKEAT/0298/06

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

HATTON LOGISTICS LTDAPPELLANT

MR M J WALLERRESPONDENT

Before

His Honour Judge Richardson Mr R Lyons Mr T Stansworth

Date 3 October 2006

[1]APPEARANCES For the Appellant MR KEVIN KIRWAN (Representative) SBMC Business Management Ltd 432 Gloucester Road Horfield Bristol BS7 8TX For the Respondent MR MARTIN WALLER (The Respondent in Person) SUMMARY Contract of Employment - Apprenticeship Tribunal's reasoning sparse, but on the facts the Tribunal's conclusion that the contract was not frustrated plainly correct. HIS HONOUR JUDGE RICHARDSON This is an appeal against a Judgment of the Employment Tribunal sitting in Manchester dated 6 March 2006. Mr M J Waller had claimed unfair dismissal from his employment by Hatton Logistics Ltd ("HL"). HL defended the claim on the basis that Mr Waller's contract of employment had been frustrated. The Tribunal rejected that argument, held that Mr Waller had been unfairly dismissed, and awarded him compensation. HL appeals against that decision, arguing that the Tribunal's reasoning on the question of frustration was erroneous in law. The facts

[2]Mr Waller's employment with HL commenced on 17 May 2004. He was employed as an LGV driver. On 10 November 2004 he underwent a routine health check-up. He had been suffering from heart palpitations. He was required to undergo further tests and he was told not to drive pending those tests. He submitted a series of medical certificates, the last of which gave the reason "awaiting possible cardiac pace-maker".

[3]On 27 May 2005 Mr Waller was called into a meeting with HL's transport manager. He was told that his contract of employment was being terminated "under frustration of contract". He was handed a letter. The letter reads:

"I write with reference to your ongoing incapacity for work. You have been unable to work since 10 November 2004 due to the suspension of your LGV driving licence due to heart problems. You have now informed us that you are due to have a pace-maker fitted, which will mean that you will be unable to drive for an additional six months following this procedure. As a consequence of this we have made the decision to terminate your employment with effect from today on the grounds that your contract of employment has become "frustrated"

. What this means is that, through no fault of yours or the company, it is not possible for you to carry out the driving or delivery duties for which you were employed." It is not necessary to read the rest of the letter but it is right to point out that the letter expressly stated that the termination of the employment was not a dismissal but was because Mr Waller was unable to fulfil his driving duties in the light of his ill health.

[4]Bringing the story up to date, Mr Waller was, in due course, able to return to work. He never had a heart pace-maker fitted. The Tribunal proceedings and judgment

[5]In the course of the Tribunal proceedings Mr Waller challenged two key points in the letter which we have quoted. Firstly he challenged the assertion that he had told HL he was due to have a pace-maker fitted. His case was that he was having medical investigations and that the fitting of a pace-maker was no more than one possible outcome of those investigations. That, he says, was what he told HL. No pace-maker was ever fitted, and in due course he was able to return to work as an LGV driver. Secondly he challenged the assertion that the fitting of a pace-maker would mean that he would be unable to drive for six months afterwards. His case was that the embargo on driving was for six weeks, following which re-licensing would be permitted.

[6]The Tribunal dealt with the question of frustration in one paragraph:

"The doctrine of frustration of contract has been implied in the employment law area from time to time. But where a frustrating event occurs the contract in question terminates automatically, without either party to the contract bringing it to an end. In this case it was abundantly clear that, whilst the language of frustration of contract was used, the Respondent terminated the Claimant's contract of employment and thereby dismissed him."

Submissions

[7]On behalf of HL, Mr Kirwan submits that the Tribunal ought to have found that Mr Waller's contract of employment was frustrated. He submits that the fundamental requirements of the doctrine of frustration were met. In the first place he says there was an outside event, an extraneous change of situation not foreseen or provided for by the parties at the time of contracting, which rendered it impossible for the contract to be performed. He did not argue that absence pending medical investigations was itself such an event. He accepted it was not, but he argued that, when it became clear that Mr Waller would have to have a pace-maker fitted and would then be disqualified from driving heavy goods vehicles for six months, such an event occurred.

[8]Further, or alternatively, he submitted that the Tribunal failed to address the questions of frustration in accordance with the correct legal tests. He referred us in his Skeleton Argument to authority, including in particular the Judgment of the Appeal Tribunal, HHJ Peter Clark presiding, in Hogan v Cambridgeshire County Council , 26 July 2001. That case in turn goes back to the modern source of the doctrine of frustration in employment law: Marshall v Harland & Wolff

[1972] IRLR 90

. Mr Kirwan says that if the Tribunal had addressed those questions correctly it would have concluded that the contract of employment had been frustrated. At all events it was not enough for the Tribunal to say that it was abundantly clear that the contract was terminated by HL.

[9]We pressed Mr Kirwan on the question of whether, even if the reasoning of the Tribunal was inadequate, the result in this case was inevitable. Mr Kirwan submitted that it was not inevitable. He submitted that, on a rehearing, Miss Lea, who had not been called at the first hearing, might be called and that her account of what Mr Waller had said to her might be accepted in preference to Mr Waller's own evidence, backed by the contemporaneous medical certificate.

[10]Mr Waller today has appeared to represent himself. He is no lawyer. He has helped us as much as he can. He has pointed out the Tribunal did have evidence from him that it was never certain that a pace-maker would be fitted, only that he was to undergo investigations. He has produced a DVLA document which shows that the period of embargo is not six months, as Hatton Logistics thought, but six weeks, and in the end Mr Kirwan does not dispute that; he simply says that Hatton Logistics were given wrong information at the time. Our conclusions

[11]It is important to appreciate that the Employment Appeal Tribunal deals with appeals only on points of law. The Appeal Tribunal is concerned to ensure that the Employment Tribunal has reached its decision for reasons which are correct in law and sufficient for parties and the Appeal Tribunal to know why the result was reached. Generally speaking, if a Tribunal's decision is defective, the case must go back for rehearing. But if the result is inevitable, if the evidence leads inexorably to a conclusion one way or another, then the Appeal Tribunal can substitute its own decision for that of the Tribunal, and therefore either dismiss the appeal or allow it in full.

[12]We are critical of the Tribunal's reasons in two respects. Firstly, on the central question whether the contract was frustrated, paragraph six is very succinct. The reasoning in it is sparse. The Tribunal says little more than that it was "abundantly clear" that, whilst the language of frustration of contract was used, HL terminated Mr Waller's contract of employment. The law relating to frustration in the context of employment is well-known. The decision in Marshall v Harland & Wolff has stood the test of time and has been developed in other authorities, summarised by HHJ Clark in Hogan v Cambridgeshire County Council . We would have expected to find in paragraph 6 of the Tribunal's reasons some succinct statement and application of this area of law.

[13]Secondly we are critical of the Tribunal failing to make in its reasons clear findings on the two issues which we have mentioned above. For those reasons we have had to consider this case with some anxiety as to whether it was necessary to remit the matter for a further hearing before a Tribunal. But we have, in the end, reached the conclusion that this is a clear case where the appeal should be dismissed.

[14]We turn to those two critical questions of fact. As to the question whether any embargo had to be for six weeks or for six months, it is now plain that Hatton Logistics were in error in their letter to Mr Waller. We have before us undisputed evidence that the necessary period for which driving must cease if a pace-maker is implanted is six weeks and not six months. In the end there is no dispute about that and on that question of fact there would be no point in remission.

[15]We turn then to the other dispute, namely whether there was only the possibility of a pace-maker being fitted or whether it was definite that a pace-maker would be fitted. In our judgment the evidence before the Tribunal on this was, for all practical purposes, pointing in one direction and one direction only. Mr Waller gave evidence before the Tribunal. His evidence was that the fitting of a pace-maker was no more than one possible outcome of those investigations. That evidence is strongly supported by the last of the medical certificates which he handed in. Miss Lea did not give evidence before the Tribunal. There was a short witness statement from her. We note that in that witness statement she gives the date of 6 May as the date of her conversation with Mr Waller. That was the date on which the last sick note must have been handed in. The sick note says, quite plainly, that there is the possibility of a pace-maker being fitted. It does not say that a pace-maker would definitely be fitted. In these circumstances, although the Tribunal should have set out a conclusion on this point, we have no doubt that underlying paragraph 6 of the reasons is a conclusion by the Tribunal in Mr Waller's favour that the fitting of a pace-maker was never more than one possibility from the investigations.

[16]Mr Kirwan, when he addressed us, was first inclined to accept that that was the conclusion the Tribunal must have reached. We pointed out to him that there was no express conclusion by the Tribunal to that effect, but we are satisfied, as he was in his initial submissions to us, that the Tribunal must have proceeded on that basis and was entirely entitled to do so as a matter of law.

[17]In those circumstances, it being common ground that the potential frustrating event was the necessity for a pace-maker implant, it seems to us that this appeal fails and should be dismissed.