DR W YUAN v BIRKBECK COLLEGE [2006] UKEAT 0661_05_2001

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2006] UKEAT 0661_05_2001Case No Appeal No. UKEAT/0661/05Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
DR W YUANAPPELLANTBIRKBECK COLLEGERESPONDENT
Before
Mr Justice Langstaff Ms J DrakeDate 20 January 2006
[1]APPEARANCES For the Appellant MS ANNA VENTURINO (of Counsel) Instructed by: Dr Wuchao Yuan Studio 43 138 Marylebone Road London NW1 5PH For the Respondent MR GARY McKETTY (of Counsel) Instructed by: First Assist Group Ltd Marshall Court Marshall Road Sutton Surrey SM1 4DU SUMMARY Contract of Employment: Notice of Pay in Lieu & Damages for Breach of Contract Issue of contractual interpretation and application on the facts to the circumstances of the employee's dismissal. The Tribunal failed to give adequate reasons to show why the notice period should be one month rather than three (the issue left to them by an EAT decision). THE HONOURABLE MR JUSTICE LANGSTAFF This appeal against a decision of an Employment Tribunal in London (Central), extended reasons for which were given on 26 July 2005 after a hearing on 15 July 2005, is part of a saga which sadly does little credit to the system. There have been, on our count, no less than three decisions which have been made with extended reasons by Employment Tribunals arising out of one and the same application, and on no less than five occasions, this being the fifth, the matter has been considered at length judicially in the Employment Appeal Tribunal.[2]The origin of the case is a claim for wrongful dismissal. It is said that the Respondent was in breach of contract by giving the Appellant one month's notice of dismissal as long ago as February 2003. The procedural history of the matter needs to be outlined before we deal with the appeal against the latest decision of an Employment Tribunal.[3]So far as is relevant, on 10 October 2003 an Employment Tribunal at London (Central) rejected the Applicant's claims for breach of contract. That came before this Tribunal by way of appeal. The President asked and ordered the Tribunal to provide further elucidation of its reasoning. In particular, he focused upon whether or not the Tribunal could elucidate its reasoning as to whether the dismissing officer in the Respondent had exercised his mind to criteria by which he should make a judgement whether or not the Appellant was irredeemably incapable of pursuing the requirements of his post. (We shall come, in due course, to the way in which that requirement emerges from the contractual background and how it is informed by the facts.)[4]By a decision of 15 July 2004, that Employment Tribunal purported to answer the President's request. Having seen what purported to be the answer, the President promptly ordered a full hearing that had little difficulty in determining that, whether on its original or elucidated reasoning, the Tribunal had, or had displayed, no proper basis for coming to the conclusion which it did. The Tribunal's reasoning was later, and with, we respectfully think, proper force described as "woeful" in this Tribunal by Rimer J giving judgment on the preliminary hearing in this present appeal.[5]The full hearing which occurred on 8 April 2005 before this Tribunal presided over by HHJ Serota QC considered the issues and came to the conclusion that the matter should be remitted for hearing to a fresh Tribunal. The order which was made by that Tribunal was in these terms:
"The matter be remitted for rehearing to a differently constituted Employment Tribunal only in relation to whether or not the Respondent was entitled to terminate the Appellant's contract of employment on one month as opposed to three months' notice"
. It is plain that that Tribunal took the view that as a matter of law if it could not be shown that the Appellant's contract of employment could be terminated lawfully by the Respondent on one month's notice when it was, then three months' notice was the appropriate period. It would follow that compensation for any losses occurring during that period should be awarded as damages for the breach of contract.[6]Whatever one may say at this stage about whether that was the appropriate question to ask (as to which we, for our part, have some considerable doubt, and as to which it appears the Tribunal chaired by Rimer J on the preliminary hearing before this present appeal had also some misgivings), it represents an order against which there has been no appeal. It follows that that was the question that the Tribunal had to answer in the present case. If it was unable to conclude that the Appellant could be dismissed on one month's notice, it would have to determine that the three months' notice was the appropriate period.[7]The matter then went back to a differently constituted Employment Tribunal for it to determine the proper answer to the question which this Tribunal, constituted as we have described, had posed. We shall come, in due course, to the answer which was given and we shall come to the reasoning which supported it. The Background Facts[8]The background facts which we have derived from the actual findings of the various Tribunals and which are common ground between the parties are these. The Appellant, who was described by Mr McKetty, appearing for the Respondent, as "a brilliant academic" obtained a post as a post-doctoral research assistant with the Respondent. He began work as such on 7 November 2002. He did so upon the terms of a letter of appointment and upon a statement of written terms and conditions of employment, which incorporated part of – or maybe the whole of - the Birkbeck personnel staff handbook. In the course of his work, assigned to the School of Crystallography, he was subject to the line management, in effect, of Professor Waksman. A number of concerns about the Appellant, his conduct and his progress were made from time to time to Professor Waksman who plainly had concerns too.[9]Those concerns were such that on the day after the first three months of the Appellant's employment ended, Professor Waksman wrote him a letter. That letter, dated 7 February 2003, reads as follows: "My assessment of your three months' probation period is the following: 1. You have made little progress in your work. 2. You have failed to appear in one lab meeting and were late in another one. 3. When it was your turn to present the lab meeting, your presentation was not up to the standard expected of someone of your research grade and experience. 4. You appear not to have taken on board the technical advice of your supervisor. As a consequence, project development has been very slow. 5. You failed to communicate with your supervisor in an appropriate and respectful fashion. 6. Because you failed to communicate in a satisfactory manner with your colleagues and with your supervisor, your progress has been slow. 7. You systematically suspected your colleagues to be the cause of your experimental failures. Failure is human, but your constant and indecent attitude of suspecting everybody else but you for your own failures is unacceptable. 8. We received a complaint that you did not follow basic safety rules at UCL. Regretfully, for all the reasons above, you are dismissed from your position with immediate effect with pay in lieu of the four weeks' notice. I will be willing to contribute towards the costs of relocation to the USA as a one-off lump sum…" and then some immaterial words follows. That letter was signed by Professor Waksman. It is plain, therefore, that he was the dismissing officer acting for the Respondent. His actions require to be put into the context of the contract between the Appellant and the Respondent to which we now turn. The Contract[10]The contract is derived from an number of documents, the terms of some of which may, at least on one reading, appear to be in conflict with the terms of others. The first is a letter of 29 August 2002 offering the Appellant appointment. That provides that the offer of appointment is subject to the satisfactory completion of a six months probationary period. It then immediately goes on to refer to a copy of the probationary procedure which is included in the handbook. That, it seems to us, means that the contract during the probationary period is to be governed by the probationary procedure unless it is governed elsewhere by more particular provisions. The letter goes on to note that the post to which the Appellant was to be appointed was externally financed under a research grant and that it was tenable under the terms of a fixed term contract for a period of up to five years, commencing from a date to be mutually agreed.[11]When the Appellant began, or shortly thereafter, he was supplied with a statement of particulars. The relevant parts of that read as follows. Underneath the heading of "Tenure and Termination of Appointment" is said:
"The appointment will end on the date specified under the grant or award unless previously terminated in accordance with the notice provision which is four weeks or summarily, should gross misconduct occur"
. At the foot of the first page is noted that:
"The college may terminate the appointment at any time in the event of misconduct or incapacity"
. The handbook, which is expressly incorporated in the contract by virtue of the statement of terms and conditions makes specific provisions for the probationary procedure. First, in general terms, it provides for a probationary period of six months. That is to be split into two parts. The first part is three months long. During that part, there is to be no dismissal except for gross misconduct. We should add that no question of gross misconduct in any sense in which it would have been understood between the parties arises here. There has been no charge and no disciplinary procedure.[12]At the end of the first three months, there was to be a mid-point report. If the progress of the probationer had not been entirely satisfactory, he would be given what one might describe as an "action plan" requiring specific steps to be addressed, suggesting how they might be addressed and giving time scales for improvement. If those time-scales were not met without there being any discernible improvement, then the probationer might then be dismissed upon one month's notice. He could otherwise be dismissed at or after the mid-point period only if judged to be irredeemably incapable.[13]At the end of the six month probationary period, if it had been thought that the probationer had performed satisfactorily, his appointment would be confirmed. If confirmed, he would not have his contract terminated before the end of the five year period except in the case of redundancy, incapability or misconduct. If it was thought that he had not performed satisfactorily he would be given notice.[14]There is a tension within the contractual documentation as to whether that notice would be of one month or three months' duration. It would be one month if one had regard to the statement of terms and conditions given to Dr Yuan himself. We have been provided, however, with a copy of extracts from the Birkbeck personnel handbook, amongst which is paragraph 34.5 under the heading "Dismissal" which reads:
"Birkbeck may terminate the appointment by giving four week's notice (or three months' notice in the case of academic related or other related staff) where a member of staff has a period of continuous service of below five years"
. We should add that one of the potential problems in this case is that we have not been given the full staff handbook. We have to trust that we have before us all that is relevant, and do the best that we can just as the Tribunals had to do the best with what they had when they came to determine the case.[15]Our summary of the provisions derives most particularly from paragraph 20 of the personnel handbook which sets out the length and purpose of the probationary period referring, amongst other matters, to the fact that mistakes may often be made by a probationer. That was only to be expected and should be allowed for, specifically (by clause 20.7) at the mid-point of the probation period. Before dealing with that clause, which is central, we should however mention that the non-dismissal provision is at paragraph 20.8.4 and that if reference is needed for the non-dismissability of those on non-fixed term contracts (except in the cases of redundancy, incapability or misconduct) that is to be found at clause 56.1.[16]Turning then to paragraph 20.7. It is headed in bold type "Mid-Point of Probation Period". It reads:
"20.7.1 If the mid-point report indicates that progress has not been entirely satisfactory, the probationer should be given full details of the specific areas which need to be improved, with an indication of how this improvement is to be achieved. Timescales for improvements should be discussed and agreed with the probationer and confirmed in writing. The Personnel Officer will advise on this. 20.7.2 Subsequent progress meetings should be held frequently. A brief record should be kept of improvements made or of failures to achieve set goals. The probationer should be made aware that such a record is being kept. 20.7.3 If, during this period, probationers fail to make a discernible improvement in performance within the given timescale, or if they are judged to be irredeemably incapable, they may be dismissed at this stage. A month's notice of the termination of contract will be given"
. The letter of 7 February 2003 to which we have already referred indicates that, by reasons of the concerns expressed therein, a month's notice of termination of contract was being given by Professor Waksman.[17]If the matter fell to us, we could not have interpreted the contract to provide that the probationer could be dismissed for incapability on a month's notice given the express reference in his statement of terms and conditions to the probationary period provisions of the staff handbook. They are more specific. They provide clearly that there are restrictions upon the dismissal of a probationer. On our interpretation, they provide for dismissal only if either there is gross misconduct or if, under clause 20.7.3 a probationer who has been given what we have described as an action plan, fails to make any discernible improvement in accordance with the given timescale. Neither of those has occurred here, nor has redundancy, nor has incapability in the general sense in which it might be considered to be used in paragraph 56. The only other power to dismiss which is given is the power to dismiss if the member of staff is judged to be irredeemably incapable.[18]It seems to us that the specification of these matters as matters for dismissal indicate that the proper analysis is that the probationer may not be dismissed for any other reason than those set out in 20.7.3 beyond the specific matters we have already addressed. That, we think, is the common view taken in those decisions of the Employment Appeal Tribunal which have thus far considered these facts and this contract.[19]This background explains why it was that this Tribunal, in its various compositions, has sought to direct the Employment Tribunal that the focus must be upon the two matters which are required before there may be a dismissal exercising the power in 20.7.3. The first has two limbs to it: a judgment should be formed, that is a judgment of the employer; and the mind of the person making the judgment must be directed either to the contractual terms or at least to the factual requirements they demand. The second is that the judgment should be that the probationer is not only incapable, but is irredeemably so. Thus, for instance, an employee who had shown no signs of being capable of doing the work which he was employed to do might be able to say that if he had known that he fell to be dismissed unless he took particular steps, he would then do so. He would argue he could not be said to be irredeemably incapable, however incapable he might have appeared to be prior to that.[20]The judgment that has to be made is that of the employer. It has, as Rimer J pointed out, no doubt to be a judgment made in good faith. It may also have to be a judgment based upon reasonable grounds or at least be one which cannot be said to be unreasonable in the circumstances. Upon that we need to express no further opinion. We simply say that we are in entire agreement, in so far as its judgment relates to matters of principle and comment, with the views which the Tribunal chaired by Rimer J had and we incorporate his decision (gratefully) in this decision as part of our own reasoning.[21]The problem with the first two decisions of the Employment Tribunal was that the Tribunal did not express any reasoning by which it reached the conclusion that the College had been entitled to exercise the power of dismissal contained in 20.7.3. Thus, when it had failed the second time simply by referring to a number of factual matters which had been in evidence but drawing no particular conclusion from them, it was inevitable that this Tribunal would remit the matter for further determination. That explains why it was that the decision of HHJ Serota QC and members focused upon whether or not the dismissing officer had properly exercised the power of dismissal at one month's notice which he would do only if he had formed a judgment that the Appellant was irredeemably incapable. With that perhaps over-lengthy introduction to the background facts, we turn to the decision of the Employment Tribunal and how they addressed that particular question.[22]What the Tribunal did was from paragraphs 5-15 set out a number of background facts. Those included reference to the contractual provisions that we have mentioned. They did not, however, come to any conclusion as to whether or not the Respondents were entitled to come to the views they did, nor whether or not any of the Appellant's comments about those matters had force, save to say that his evidence did not really assist. The critical passage in the reasoning is at paragraphs 18 and 19. That reads as follows:
"18. The letter of dismissal says in terms, although not specifically, that the reason for dismissal is the claimant's irredeemable incapability. This is set out in particular in paragraph (7). In the circumstances here, where Professor Waksman found the claimant would not or could not recognise that experimental failure probably arose from his own error, and that he needed to seek and overcome the reasons for the failure, the professor's conclusion must have been that the claimant could not improve, i.e. that the claimant was irredeemably incapable. 19 It follows that the respondent was entitled to determine the claimant's .contract of employment on one month's as opposed to three months' notice in accordance with clause 20.7.3"
. Those conclusions, it is said by the Appellant, are fatally flawed. For much of the argument before us, Mr McKetty for the Respondent appeared to accept that that was so and that the reasoning of the Tribunal could not stand, although his submission then was that nonetheless the Tribunal were plainly and arguably right to come to the overall conclusion which they did. It may however be that, in the tail-end of his address to us, he was seeking to argue that the Tribunal were not in error or if they were in error that the error was not of great significance.[23]Accordingly, we shall deal with the matter in a little detail to express our views of it. The first sentence contains an inconsistency. A letter cannot say something in terms, but not specifically. It is apparent from what follows that the Tribunal have concluded that the letter, taken as a whole, conveys a view as to irredeemable incapability but does not, in fact, say so. It is obvious that the letter says nothing as to irredeemable incapability. The specific reference to paragraph 7 is unhelpful. There is no reference in it to incapability; there is no reference to irredeemability. There is, at best for the Respondent, the expression of the view that the conduct of the Appellant was unacceptable.[24]The Tribunal's reasoning in paragraph 18 continues to the last three lines where it expresses the Professor's conclusion as one which "must have been" that the Claimant could not improve. Those words only emphasise the fact that it is not what the Professor said his conclusion was. The argument, it seems to us, is what might uncharitably be described as a "cart before horse" or "boot straps" type argument. It begins with the letter. It acknowledges, in effect, that the only lawful reason for giving such a letter of dismissal would have been if Professor Waksman had had the view that the Appellant was irredeemably incapable. Because he wrote the letter, it therefore follows that he had the view.[25]The analogy might be with a case in which there was a power to dismiss only for gross misconduct. It could not be said, in our view, that if the employer then sent a letter of dismissal without making reference to the words "gross misconduct", that that was exactly what the employer had in mind. It might be. It might not. But one could not so infer from the letter. However, one could infer from a letter of dismissal such as that of 7 February 2003 that the author of it, by making no reference at all to the test of irredeemable incapacity, had simply not directed his mind to that question at all. Indeed, the industrial members of this Tribunal point out that each of the seven matters specifically referred to in the letter is better categorised as a complaint about conduct than it is about capability. Therefore, far from concluding from the letter that the author of it had in mind the need to make a judgment, or had formed a judgment that the person to whom it was addressed was incapable and irredeemably so, the natural inference from it would, in fact, be the opposite – that the author, though having serious concerns about the behaviour of the addressee and some concerns about his performance, had not addressed the question of incapability, still less the question of whether that incapability might be cured.[26]Paragraph 19 of the Tribunal's decision gives their conclusion that the Respondent was therefore entitled to determine the Claimant's contract of employment. It follows from the criticisms which have been made at paragraph 18 (which we have reflected in the last part of our judgment) that we do not think that the reasoning of the Tribunal sustains that. Accordingly, it is plain to us that this Tribunal was in error of law. It has addressed the question it was asked but come to a conclusion on a false basis and by a false process of reasoning.[27]Accordingly, we have to ask what we should do. Plainly and Unarguably Right?[28]Mr McKetty has sought to argue the force of the underlying facts. He has taken us in some detail to e-mails and letters which passed between the Appellant and his employers in the period before 7 February. His submission to us has been that those demonstrate that, as a matter of fact, the Appellant's conduct was such that he was repudiating the contract. He argued that there was a link between irredeemable incapability and repudiation. We noted his submission as being that irredeemable incapability can only be applied where an employee repudiates his contract. He went on to argue that it existed where the employee was not able to work with his employer in such an environment. We have great difficulties in understanding his point as to the combination of the test set out contractually in the contract and the common law concept of repudiatory conduct but, in any event, we can say this. There is substantial material which shows that the employer formed a dim view or expressed a dimmed view of the Appellant. We are not in a position to judge nor to investigate the extent to which those complaints may or may not be justified nor evaluate the extent to which they form only part of a picture, the rest of which may be much more favourable to the Appellant, nor determine the extent to which the Appellant's own rebuttals of those matters as issues of fact may or may not be justified. If we were ourselves to decide that there had been repudiatory conduct, we would be trespassing on an area of fact which is for a Tribunal to determine. It does not appear, so far as we can divine from the decisions below, that the matter was put and argued on that basis before those Tribunals. Accordingly, it seems to us that we cannot say that the decision was plainly and unarguably right, nor that we are able to decide it for ourselves.[29]Next we have to consider on the same basis whether the factual material, which there is, shows that the view to which Professor Waksman came was, indeed, a judgment reached in good faith that the Appellant was incapable and irredeemably so.[30]We cannot say that the Tribunal must have been right to come to the conclusion which they did. First, it is not what the Professor himself said in the letter. As we have indicated, the natural inference from the letter is the opposite. Moreover, a letter addressed to "To whom it may concern" was produced during the course of the proceedings below from Professor Waksman. In its last two pages, that letter deals with issues of performance upon the last two pages which Mr McKetty has asked us specifically to consider. We have done so. We note that although the letter makes detailed complaints about the approach and behaviour of the Appellant, the one thing it does not say is that he was incapable, and irredeemably so, of performing as a post-doctoral research assistant. Indeed, incapability would perhaps be difficult to establish, given Mr McKetty's assertion to us, which we have no reason to doubt, that the Appellant was a brilliant academic. Capability in that sense, therefore, was something which he undoubtedly had.[31]Thirdly, Professor Waksman did not appear to give evidence at any Tribunal. Instead, the College called Annette Groark, the personnel manager, who herself had not been involved in the reasoning which led to the dismissal. She therefore could not say, and did not say, that a judgement had been formed as a result of which the letter was sent. Accordingly, it seems to us that we cannot attribute to the dismissing officer the view which he would be required to have if the contractual power to dismiss was to be properly exercised. Remedies[32]That conclusion then leaves us in this position: we have been invited by Mr McKetty to remit this case yet again to the Tribunal for determination. However, we have already indicated that this matter, when it was last before this Tribunal for a substantive hearing, was ordered to be remitted then for the determination as to which one of two alternatives was appropriate. The Tribunal, by flawed reasoning, came to the conclusion that it was one month. The default alternative, if I may put it that way, from the terms of the order, was a three month period of notice. We have the choice of remitting this matter to another Tribunal to try again to make a decision, if it is one month or three. We cannot order any other issue to be tried, since trial of that single issue was the decision of this Tribunal earlier, and it has not been appealed and therefore implicitly is to be taken as accepted by the parties (whatever our views of the proper origin of the three month period might be).[33]To remit the case would thus involve the College being invited to produce evidence for the third time to the effect that someone actually had in mind the requirements of the probationary provisions in the handbook, or at least a conclusion as to irredeemability of incapability. That is something which the Respondent has singularly failed to provide thus far. It is something which would have been easy to provide and something it is surprising that it was not provided, particularly on the last occasion, keeping in mind the limited and focused nature of the question that was asked.[34]We have in mind that Miss Groark herself, in paragraph 7 of her witness statement, noted that "if we have been advised, there was still a contractual obligation to direct money to the Applicant, we would happily pay the sum that was required of us. This would prevent time being wasted by ourselves, our representative, the Chairman and members". We are mindful of the overriding objective. This is a case which involves no great sum of money, in respect of which the inconvenience and delay to the parties thus far has been considerable. We would not wish to add to it, nor to encourage a process which might lead to yet further appeals.[35]We therefore think that we are entitled, within our jurisdiction, to have regard to the fact that the Tribunal below was presented with a choice. If the employer could show that the employer lawfully exercised the power to dismiss on one month's notice, then it would be one month's notice. If the employer could not do so, or did not do so, then it would be three months. It is plain from what we have said that the employer's evidence was not up to the requirements of showing that it was a one-month notice. If anything, as we have indicated, the evidence that was produced showed the opposite. Accordingly, had the Tribunal been properly directed, we think that they would have come to the conclusion, on the evidence before them, that this would be a case in which one month's notice not having been established, the employee could have been dismissed only upon three month's notice being given, that being the other choice.[36]It is for those reasons that we shall allow this appeal and direct that in place of the order of the Tribunal is to be substituted a provision that the Appellant is entitled to be paid damages on the footing of three months' notice. It may yet be that that issue has to be remitted to a Tribunal for the Tribunal to determine what that sum should be because, of course, the claim is one for damages. It is not a claim for debt. If the Appellant, for instance, had remunerative employment in the meantime, or failed to mitigate his loss, those might be relevant considerations though we suspect that, in the present case, they are somewhat academic.[37]We should add, because we are conscious that Birkbeck is a well respected institution and rightly so, that this judgment should not be seen as being any slur at all upon Birkbeck. It may be that part of the problem which the Employment Tribunals below had in grappling with the issues arose rather out of the extent of the provisions which Birkbeck make on paper (at the risk of some, perhaps being difficult to reconcile with others) in order to ensure the proper treatment of their staff. It should not be thought that we have made any determination whatsoever upon the Appellant's claims, amongst other things, to have been "the victim of a campaign against him, part of which in bad faith was his dismissal" (our own summary). We have dealt with this case purely upon the evidence available to the Employment Tribunal and upon the basis of the arguments which appear to have been addressed both to it and to the Appeal Tribunal which was last seized of this matter here before that chaired by Rimer J. For those reasons, but with expressing those qualifications, we allow the appeal in the way and to the extent that we have indicated.