TOM FINDLAY & CO LTD v MRS M DEVLIN [2007] UKEAT 0071_06_0911

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2007] UKEAT 0071_06_0911Case No Appeal No. UKEAT/0071/06Venue 52 MELVILLE STREET, EDINBURGH, EH3 7HF
Between
TOM FINDLAY & CO LTDAPPELLANTMRS M DEVLINRESPONDENT
Before
Lady Smith Miss J Gaskell Mr M SmithDate 9 November 2007
[1]APPEARANCES For the Appellant MR B NAPIER QC Instructed by: Messrs Morton Fraser Solicitors 30 -31 Queen Street Edinburgh EH2 1JX For the Respondent MR A HARDMAN Advocate Instructed by: Messrs Anderson Partnership Solicitors 125 West Regent St Glasgow G2 2SA SUMMARY UNFAIR DISMISSAL Dismissal/ambiguous resignation Claimant tendered resignation on basis of 12 weeks notice. Respondents "released" her before the end of the notice period but paid her for the whole of the 12 weeks. Circumstances in which Tribunal's finding that claimant's "release" was unfair dismissal reversed by the Employment Appeal Tribunal on appeal, the contract of employment being held not to have been terminated by them. THE HONOURABLE LADY SMITH Introduction This is an appeal by employers from the judgment of an Employment Tribunal sitting at Glasgow, Chairman Professor V Craig, registered on 18 July 2006, which found that the claimant had been unfairly dismissed.[2]We will refer to parties as claimant and respondent. Background Facts[3]The respondents operate a plumbing and heating services business with a workforce of between 65 and 90 people. The claimant had worked for them for many years, since 1983, latterly as their office manager. She had become friendly with the two directors of the company and their children.[4]For reasons which we do not need to go into for present purposes, relationships between the claimant and one of the directors ran into difficulties and the claimant became upset. She felt that, in the circumstances, she should hand in her notice and wrote a letter in the following terms: "Dear Liz and Tom, It is with deep regret that I tender my resignation. I hope to work the statutory notice period (12 weeks) which will take my leave date to 25 November 2005 but if this doesn't suit please let me know." 5. The reference to the "statutory notice period" appears to proceed on a misreading of s.86(1) of the Employment Rights Act 1996 which provides that an employer must give at least 12 weeks notice to an employee who has been continuously employed for more than 12 years but makes no such requirement in the case of an employee. The statutory requirement in respect of an employee is that notice of at least one week is given (s.86(2)). In terms of her contract of employment the claimant was expected to give four weeks notice.[6]The Tribunal found as fact that the claimant was, by writing "but if this doesn't suit please let me know", she was hoping that the respondents might revert to her to say that it was not necessary for her to leave at all. She handed the letter to the respondents on 5 September 2005. Her hopes were in vain.[7]The respondents replied on 5 September:
"Dear Mrs Devlin We herewith acknowledge receipt of your resignation with a view to working the full statutory notice of 12 weeks. We accept your resignation but should we manage to employe a replacement before 25 November it would be better for all concerned for you to be released at this point. Full money due to you will of course be paid up until 25 November."
[8]The claimant did not respond to that letter. She carried on working. On 7 October, she received another letter from the respondents:
"Dear Mrs Devlin The replacement for your position will be available to start on Monday 24 October 2005. Therefore you will be released from your statutory notice period of 12 weeks on Friday 21 October. As stated previously full wages will be paid to you up until Friday 25 November 2005."
On 21 October, the claimant received a further letter:
"Dear Mrs Devlin Enclosed please find cheque for £2,973.19 being payment of your salary up to your notice period of 25 November plus 3 days to cover any holiday days that may still be due to you. Your P45 will be posted to you within the next few days. I would like to take this opportunity to genuinely thank you for all your hard work and dedication you have shown to our company. You have been an excellent employee and if required a first class reference will be supplied to any future employer."
The Tribunal's Decision[9]The issue for the Tribunal was whether or not the claimant had been dismissed. Her case was that the respondents had done so. Their letter of 7 October 2005 effectively gave her notice that her employment was to terminate on 21 October 2005. That occurred but there was no good reason for it and the dismissal was accordingly unfair. For the respondents, it was argued that it was the claimant who had brought her contract to an end, not them. By not objecting to the advancement of her departure date, she had acquiesced in it.[10]The Tribunal found in favour of the claimant. They did so on the basis that the claimant did not indicate that she "agreed with being released from her notice period" ( paragraph 47) and they explained further in paragraphs 48, 49 and 50:
"48. Given the history of the claimant's employment with the respondent company her indication of flexibility in her letter of resignation was included in the hope that the respondent company might be able to accept the position that Mrs Devlin found herself in between the two wings of the family. In the event that did not happen. Indeed it was the reverse as Mrs McLaughlin made clear in her own evidence that she preferred the claimant to leave before 25 November as it would be "better for all concerned" in that the awkward or difficult atmosphere in the office of which the claimant was the manager could be defused. 49. The fact that the claimant was to be paid her "full wages until Friday 25 November" is in our view of no particular significance. A critical question for the Tribunal was who brought the contract to an end on 21 October and had that date been a date fixed by agreement between the parties. As indicated earlier the evidence does not show there was an agreement between the claimant and respondent company that her notice would be advanced from 25 November until 21 October. 50. The Tribunal is of the view that it was undoubtedly the respondent company that caused the claimant's employment to be brought to an end on 21 October and as a result it was in the Tribunal's view the respondent company that terminated the claimant's employment by letter of 7 October a letter which was in effect a dismissal with notice to terminate on Friday 21 October."
The Appeal[11]For the respondents, Mr Napier QC submitted that the Tribunal had erred in two respects. One was in their approach to the degree of flexibility indicated by the claimant in her letter of 2 September. They approached it as being flexibility as to whether she was going to leave the respondents' employment at all whereas it was plain on a proper construction of the letter that the flexibility was being indicated only in respect of the date that she was to stop work. Secondly and importantly, they had erred in approaching matters on the basis that the respondents' letter of 7 October was a letter of dismissal. It was no more than a release from the obligation to attend work as from 21 October. The contract of employment did not terminate until 25 November and that was not on account of any act on the part of the respondents but on account of the claimant having resigned. 25 th November was the date of termination because that was the expiry of the period specified pursuant to the giving of notice. The Tribunal had made a critical error when it jumped from the proposition that the claimant's employment was brought to an end to the assumption that the contract was terminated. They were not one and the same thing.[12]In support of his submissions Mr Napier referred to Turner v Sawdon & Co [1901] 2 KB 653 , Collier v Sunday Referee Publishing Co Ltd [1940] 2 KB 647 , Cooper v Henderson (1825) 3S 619 and Lees v Arthur Greaves (Lees) Ltd [1974] 2 AER 393. The latter was, he submitted, of particular relevance.[13]For the claimant, Mr Hardman's approach was rather different. He sought to persuade us that, bearing in mind that the court required to consider what were the proper inferences to draw from the facts found (Lees v Arthur Greaves (Lees)Ltd per Scarman LJ at p.398), we should infer that in her letter of 2 September the claimant was offering to terminate her contract of employment on 25 November, that the respondents accepted that offer subject to the condition that they would be entitled to specify an earlier termination date but that that was a condition which was never accepted by the claimant. There was, accordingly, no concluded agreement that the claimant would resign and the only way to regard the respondents' letter of 7 October in that event was that it was a letter of dismissal. Just as the seller of a house could not, without the purchaser's agreement, bring forward the entry date, neither could an employer in these circumstances, advance the termination date. The proper analysis when an employee tendered their resignation was that it amounted to an offer to resign which required to be accepted; otherwise it was ineffective. A resignation could be withdrawn prior to its being accepted. If the employer accepts subject to conditions which are not accepted by the employee then there is no resignation by the employee. Mr Hardman referred to British Midland Airways Ltd v Lewis [1978] ICR 782 in support of his submissions. Discussion and Decision[14]The issue for the Tribunal was whether or not there had been a dismissal within the meaning of s.95 (1)(a) of the Employment Rights Act 1996 which provides:
"For the purposes of this Part an employee is dismissed by his employer if ………. (a) the contract under which he is employed is terminated by the employer (whether with or without notice)."
[15]In common with all employees, the claimant was entitled to bring an end to her contractual relationship with the respondents provided she gave them notice. S.86(2) of the 1996 required her to give at least one week's notice and her contract required her to give at least four weeks. In fact she gave twelve weeks. Having given more than sufficient notice she had secured her right to terminate. Furthermore, having tendered her resignation on the basis of adequate notice, she was bound by it; she was not entitled to withdraw it ( Riordan v The War Office 1959 3AER 552, Harris & Russell Ltd v Slingsby [1973] ICR 454). Resignations tendered in accordance with the employee's contract are not offers which require to be accepted. They are simply instances of an employee asserting a right which exists under the contract. We cannot agree that Mr Hardman's analysis is correct.[16]Turning to the claimant's letter of 2 September, we consider it gives clear and unequivocal notice that the employee is tendering her resignation so as to bring the contract of employment to an end on 25 November. Insofar as she indicates a willingness to be flexible it is not in the sense of there being any dubiety as to whether or not their relationship was to end. The flexibility plainly relates to the date when that was going to happen i.e. she was prepared to consider a date other than 25 November. In the event, no other date was agreed and we are satisfied that the termination of the parties contractual relationship occurred on 25 November. The cause of its occurrence was not the respondents' letter of 7 October. It was the claimant's resignation as tendered in her letter of 2 September. That was the only cause. The letter of 7 October caused the cessation of the claimant's obligation to attend work but that was its only effect. It did not bring the entire contract to an end.[17]Our conclusion is, of course, at variance with that of the Tribunal. They refer to the notice period not having "run its course" (paragraph 45) and to the respondents having "brought the contract to an end" (paragraph 49). In adopting that approach we consider that they have fallen into error. They have regarded the fact that the claimant was not required to attend work as from 21 October as indicating that the parties' contract terminated on that date. That is not right. The correct analysis in our view is that whilst the respondents waived their right to insist on the claimant coming in to work after 21 October, they otherwise remained contractually bound to her until 25 November. The fact that an employer releases an employee from one of her obligations does not mean that he has brought the contract to an end. The claimant remained bound in respect of her other contractual obligations; her duty of trust and confidence remained in place until 25 November, for instance. Further, the respondents remained bound in respect of the whole of their obligations and there was no evidence before the Tribunal that they failed in or departed from them in any respect. They paid her her wages for that period and judging by the payslips in the bundle that would also have involved them paying their employers' contributions to her pension. They remained bound to her in respect of their duty of trust and confidence. The fact that they did not require her to attend work was not indicative of any failure in duty or departure from the subsisting contract by them because, as is evident from the authorities relied on by Mr Napier, they were not obliged to provide her with work. As it was so colourfully put by Asquith J. in the case of Collier at p.650:
"… a contract of employment does not necessarily or perhaps normally, oblige the master to provide the servant with work. Provided I pay my cook her wages regularly she cannot complain if I choose to take any or all of my meals out". and it is significant that in the case of Lees , where the facts were similar to those of the present case, it was found appropriate to interpret the facts as showing that: " he was still employed but not required to work after 28 th January , but was paid his pay for the rest of his employment."
(p.397)" that "rest of his employment" taking him up to 31 st March. Mr Hardman did not, we note, take issue with the proposition that the claimant's contract did not require the respondents to provide her with work.[18]We did not find the British Midland Airways case to be of assistance. That was not a resignation case. The employee there had gone no further than indicating a desire or intention to resign in the future. Had he done so, the question of whether or not the parties had agreed a date that he would leave, which was the issue before the Tribunal, would not have arisen. Disposal[19]In these circumstances, we will pronounce an order upholding the appeal and dismissing the claim.