Tribunal advice needed - complex question

[RCW]

Hi Experts - legal advice urgently needed.

 

I am part way through a particularly complicated and protracted tribunal process (unfair dismissal, unpaid notice) with a crux point that is proving troublesome to clarify via legal forums or case law. I am the claimant.

 

I've outlined the facts and Tribunal case details as follows in bullets below:

 

The employer dismissed the claimant 02/01/2013.

 

The reason given at time was redundancy. The dismissal was not confirmed in writing despite the claimant’s request.

 

The employer did not observe a consultation period. It was a single day dismissal process.

 

The dismissal was witnessed - another employee was dismissed on the same day (same meeting) also by reason of redundancy.

 

The Claimant had a 3 month notice period and the agreed date of termination was 02/04/2013.

 

The employment began 01/04/2011 meaning the employment term was 2 years and one day based on the date of dismissal plus the contractual notice period.

 

The employer wrote to the claimant with subject header “Re: Redundancy” 14/01/2013 confirming agreement to discharge restrictive covenants in the Employment Terms concerning alternative employment with competitors. There was still goodwill at this stage.

 

The first month of the notice was worked in full and Jan salary was paid/received as expected.

 

Mid-February the employer placed the claimant on Garden leave (verbally) and closed the office premises.

 

The Feb salary was not paid, March salary was not paid, April part salary was not paid. Holiday and redundancy pay were also not paid.

 

Under the case details outlined above the deadline for ET1 was 02/07/2013. The respondent filed ET1 for unfair dismissal and other claims (salary, notice, holiday pay, etc) on 01/07/2013 – one day before the deadline.

 

IMPORTANT FACT: Due to the employer’s unlawful deduction/withholding of the claimant’s salary, the claimant started alternative employment on 11/03/2013, three weeks prior to the end of the notice period.

 

The employer has currently applied for the case to be struck out as out of time due to the submission deadline having apparently changed – due to the claimant having started alternative employment prior to the end of the notice period. Preliminary hearing has been scheduled.

 

The Employer makes the case that the employees act of commencing full term employment elsewhere, represents acceptance of the employer’s fundamental breach (non-payment of salary) and as a result the effective date of termination became 11/03/2013. Therefore the claim submitted 01/07/2013 is out of time based on the revised deadline (11/06/13).

 

From what I have read elsewhere it appears likely the effective date of termination will be revised to 11/03/2013 and the out of time rule will apply.

 

Ordinarily the accepted breach argument would be open/shut case of constructive dismissal however the employer appears safe in this regard due to the 3 month rule.

 

My question is this – does the employer’s failure to properly communicate the termination dates in writing adequately support the grounds that it was “not reasonably practicable” for the claimant to submit the ET1 within the revised deadline?

 

Is there any case law to reference in clarifying the matter?

 

Any advice gratefully received. Happy to clarify further if needed.

Pre-hearing scheduled Late Oct.

 

Thanks

Edited October 4, 2013 by RCW
typo

[steampowered]

Assuming you have described it correctly, I don't think the employer's argument has much merit. The effective date of termination is defined by statute - see http://www.legislation.gov.uk/ukpga/1996/18/section/97. "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". I think the idea that commencing alternative employment means an acceptance of non-payment of salary is a bit far fetched, and also contradicts s97.

 

What have you read elsewhere that makes you think the date of termination might be 11/03/2013?

 

I don't think the employer's failure to communicate the termination dates in writing is relevant. It certainly would not be enough to constitute "not reasonably practicable" within the meaning given by case law.

[RCW]

Thanks Steampowered - quick response appreciated!

 

The Respondent argues that the date of termination was compliant with S97 in that (irrespective of the agreed notice period) the claimant terminated the employment without notice on the 11th - this superseded the earlier termination date (similar to the scope for summary dismissal to alter an otherwise agreed termination date). If it helps I have added the specific terminology used in the employer's wording of the case point:

 

...the employment terminated;

d. at the very latest on 11 March 2013, when the claimant admits he started new full time

employment with XXXXXXXXX (in which case, his claim should have been filed by no

later than 10 June 2013). Again, if (which is not accepted) the Claimant’s

employment was ongoing as at 11 March 2013, the commencement of his

employment with XXXXXXXXX should be treated either as his resignation from the

Respondent (in non-constructive dismissal circumstances) or, in the alternative, his

acceptance of the Respondent’s fundamental breach of contract in not having paid

him his salary since January 2013.

 

In terms of external references, the John Lewis Partnership v Charman UKEAT/0079/11/ZT case is an example of the Judge allowing a late ET1 due to being not reasonably practicable for claimant to submit in time.

 

Here's the case: http://www.employmentcasesupdate.co.uk/site.aspx?i=ed8348

 

...an extrapolation of the fact it was not unreasonable for the claimant to be unaware of the deadlines... (something I believe applies in this case) however the circumstances were not identical so perhaps of limited value. Plus the the claimant (me) is unlikely to have the legal/speaking skills to articulate such a notion to any great effectiveness during the hearing.

 

With respect to your question: "What have you read elsewhere that makes you think the date of termination might be 11/03/2013?"

 

I'm looking for specific 'official' references as we speak but certainly the general feel from "the internet" is that when the employee is dismissed or resigns without notice - the EDT is the last day of work. This point is fundamental to the employer's claim for ET1 being out of time, so it would be great to establish this not to be the case.

 

Are you aware of similar cases where the original ETD has prevailed?

[RCW]

In terms of references on the original question - frustratingly the "reasonably practicable" test as far as I can tell is quite subjective as outlined here:

 

http://www.youremploymentlaw.net/solving-employment-problems/employment-tribunal-claims/reasonably-practicable-test/

 

 

And even the case law explanations are not much clearer.

 

http://swarb.co.uk/dedman-v-british-building-and-engineering-appliances-ca-1973/

[steampowered]

s97 ERA 1996

 

You can't be "compliant" or "non-compliant" with s97. It is just definition of the 'effective date of termination' for unfair dismissal purposes. I think it is quite self-explanatory - "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". The EDT would only be on the actual date of termination if it was a dismissal without notice, essentially limited to gross misconduct dismissals.

 

The starting point is that the EDT was 02/04/2013. The legal question here is whether the EDT can be varied.

 

There is a summary of the case law on this at http://www.employmentcasesupdate.co.uk/site.aspx?i=ed11739. The case which comes closest to supporting the employer's position is Palfrey v Transcto at http://www.bailii.org/uk/cases/UKEAT/2004/0990_03_1503.html. Basically, in this case, the employee was dismissed on notice. The employee then accepted full payment for his entire notice period (i.e. payment in lieu of notice), and the parties agreed that the last date of employment would be moved forward.

 

I don't think there is any case law to support the employer's contention that taking another job would retroactively change the EDT. The employer's argument is quite a leap from the existing case law and can be distinguished from the Transco case because in that case (1) the employee received full payment and (2) the updated termination date was agreed between the parties.

 

If you have to argue this point before a judge, I think you should start by making the point that you were dismissed on 3-months' notice and accordingly the EDT was 02/04/2013. The wording of s97 is extremely clear and does not provide for any retroactive change in the EDT. The Tribunal should only depart from this by allowing the EDT to be retroactively revised in exceptional circumstances.

 

In this case you were trying to mitigate your losses suffered as a result of the employer's breach of contract, as you were legally obliged to do, and it is settled law that mitigation of loss does not constitute an acceptance of a fundamental breach of contract. The employer's argument that the employee should be punished for reducing the loss he has suffered (and hence the amount claimed in Tribunal) is unattractive in principle.

 

Extensions

 

I think you are right that the "reasonably practicable" test is subjective and unpredictable. However I think it is fair to say that it is usually treated as a strict test. The John Lewis decision you posted was upheld by the EAT but does strike me as an unusually pro-employee decision. Having read through the judgment it seems to me that the Tribunal was very generous in view of the employer dragging things out and in view of the fact that the claimant was an inexperienced 20-year old.

 

It is fairly settled law that mere ignorance on the part of the employee, or a mistake made by the employee or his advisers, is not enough. It is not always easy to reconcile these cases with cases like the John Lewis case and Marks & Spencer plc v Williams-Ryan [2005] EWCA Civ 470, but I think it is fair to say that the cases where an extension was granted have tended to focus on some sort of linked bad conduct of the employer, such as an excessively long internal appeal process or misleading letters, rather than just the employee's ignorance.

 

I think you will find it very difficult to say that failure by the employer to notify you of the EDT satisfies that test. The employer does not have any obligation to notify you of the EDT, so it is very difficult to use that as an excuse. Its not a completely hopeless argument, and worth a go if you lose on the s97 point, but it is weak so only use as a back-up.

[honeybee13]

Hello there.

 

As you're asking specifically about employment matters, I've moved you to the employment forum for the forum guys to have a look as well as SP, who will see it here anyway.

 

My best, HB

[becky2585]

The facts are a little confusing here, but to simplify things...

 

If you resigned and took up another job during your period of garden leave, then the earlier date would be your termination date as you chose to leave.

 

If you were paid in lieu then your termination date would be your final day in employment.

 

If I'm understanding this correctly, then it appears that you may have technically resigned as you shouldn't have started another job whilst on garden leave.

[mariefab]

Did your contract say anything about gardening leave?

If so, can you quote it here?

[RCW]

Thanks Steampowered - brilliant insight and case law reference points hugely appreciated!

 

Hi mariefab,

 

Yes there was a clear garden leave clause in the contract. The terminology is as follows:

 

"Where the company requires you to remain away from work on full pay during the notice period (whether you or the company gave notice) you will be required to comply with any conditions laid down by the Company. During such time you will not be permitted to work for any other person, firm, client, corporation or on your own behalf without the Company's prior written permission."

 

Obviously a key part of the clause was the "...remain away from work on full pay" which was failed on the side of the employer.

 

The employer's terminology in the grounds of resistance with reference to the issue states the claimant formally accepted the [non-payment] breach on grounds that the act of commencing full term employment was fundamentally incompatible with the terms of the employment contract.

 

Is it possible that the employer's failure to pay the claimant's salary invalidated any contractual authority the employer may have had to restrict the employer from entering dual employment during the final three weeks of the notice period?

[RCW]

Hi becky2585, yes it is a confusing matter. Certainly there was no knowledge of a resignation so if one is established then it would be on the basis of technicality. Another fact to consider is that the employer has expressly denied placing the claimant on garden leave - largely to support a claim that the claimant resigned without notice Mid Feb when the last day was worked "in the office".

 

The garden leave denial is a conflicting point with the employer's Accepted Breach argument however they have constructed the argument reasonably safely it seems, Ie. if (which is expressly denied) it is held that Garden Leave was in place then revert to the accepted breach argument.

[becky2585]

I think this may be tricky for you!

 

Can you just clarify these exact dates for me please?

 

a) when you were dismissed;

b) your final day in the job;

c) when your notice period was due to expire;

d) when you took up alternative employment.

 

I know they're somewhere in the thread but it's a little factually confused at the moment

 

Finally, what's your explanation as to why the date when your notice expired should be taken as your termination date rather than the date you started another job?

[RCW]

one more thing... The placing of the claimant on "garden leave" was conducted verbally and not supported in writing.

[RCW]

Sure - dates as follows:

 

a) when you were dismissed; 2nd Jan 2013

b) your final day in the job; 15th Feb 2013

c) when your notice period was due to expire; 2nd Apr 2013

d) when you took up alternative employment. 11th Mar 2013

[RCW]

Thanks becky2585 - to your last question: My explanation is that the original termination date should stand because no other date was ever communicated or agreed. Only since the tribunal case was raised has the employer revised the termination date, primarily in order have the claim struck for being out of time.

[mariefab]

You say that the office closed and you were put on garden leave on 15th February.

They say you resigned without notice on that date.

 

Do they deny that the office closed on 15th February?

[mariefab]

More questions:

 

1. If they are claiming that you resigned without notice on 15th February; why aren't they claiming this date as the EDT?

2. What did you state in any communications to them about their non-payments of notice/redundancy pay before you submitted your ET1?

3. What exactly did the 'Re: Redundancy' email say.

[mariefab]

P.S. There was a Court of Appeal case in 1998, Hutchings v Coinseed , which may be helpful.

It appears to be unreported, but there are several references to be found on Google (and maybe Becky could have the resources to access the case?).

[RCW]

Thanks mariefab - answers as follows:

 

1. Do they deny that the office closed on 15th February?

 

No they have not commented on the closure of the office to date. The premises was occupied by a new business from March so I do not see this as being a contended point.

 

1. If they are claiming that you resigned without notice on 15th February; why aren't they claiming this date as the EDT?

 

They have a multi-tiered grounds of resistance. Ie. express denial of agreed notice, therefore ETD of 2nd Jan, if it is proven notice was given then revert to express denial of agreed garden leave and use resignation without notice argument (ETD 15th Feb), if (which is expressly denied) it is held that Garden Leave was agreed then revert to the accepted breach argument.

 

2. What did you state in any communications to them about their non-payments of notice/redundancy pay before you submitted your ET1?

 

Many emails, calls and numerous meetings. They dragged it out for months and refused to formally state the particulars of the dismissal in writing, they eventually offered a compromise agreement on 1st July, the last day of the ETD submission window. We were unable to execute the agreement in time due to the requirement for a legal advisor (to witness the agreement) which I was not able to facilitate within the ET1 deadline. Interestingly the terms of the proposed compromise agreement stated "Dismissal by reason of redundancy" however the document was Without Prejudice which I gather limits it's use as evidence in the tribunal.

 

3. What exactly did the 'Re: Redundancy' email say.

 

This was a signed letter as opposed to an email. The material points include an apology that the employment came to an end in the manner it did, plus a clear statement of discharge from any restrictive covenants in the employment contract relating to future employment with competitors.

[mariefab]

Even more questions:

 

1. Did you receive a P45? If so, what was the 'leaving date'.

2. Did your contract of employment state that the employer must give you 3 months notice?

3. Is the other employee, dismissed on 2/1/13, prepared to be a witness?

 

Back to the 'Re Redundancy' letter:

1. Does it refer to any dates?

2. Can you please quote in full exactly what it says about discharging restrictive covenants....

[RCW]

Thanks mariefab - answers as follows:

 

1. Did you receive a P45? If so, what was the 'leaving date'.

 

No. The employer would not provide the P45 despite request.

 

2. Did your contract of employment state that the employer must give you 3 months notice?

 

Yes. The contract includes three months notice. The employer admits in the Grounds of Resistance that the claimant was entitled to three months notice for dismissal reasons other than Gross Misconduct.

 

3. Is the other employee, dismissed on 2/1/13, prepared to be a witness?

 

Yes. A signed witness statement has been provided.

 

Back to the 'Re redundancy' letter:

1. Does it refer to any dates?

2. Can you please quote in full exactly what it says about discharging restrictive covenants....

 

sure the letter states as follows:

 

"Re redundancy 2/1/2013

 

...

 

As per our conversation of the 2nd of January, I apologies again that your time with XXXXXXX has ended in this manner.

 

Reference your request that we ease any restrictions in your employment contract so that you might find a new job in these relatively difficult times, given the circumstances of your departure this is something we are prepared to do.

 

To this end, I give notice that the restrictions in your employment contract that govern future roles with employers who might be deemed competitive are hereby rescinded.

 

...

 

[signed by Chief Executive Officer]

 

"

Edited October 6, 2013 by RCW

[becky2585]

P.S. There was a Court of Appeal case in 1998, Hutchings v Coinseed , which may be helpful.

It appears to be unreported, but there are several references to be found on Google (and maybe Becky could have the resources to access the case?).

 

I'll have a look

 

This is certainly an unusual situation!

[RCW]

Thanks Becky - unusual it is - The Hutchings v Coinseed case looks to be an example of a PILON altering the EDT. There was no PILON in this instance so I'm not sure the case could be applied in a supportive manner - unless I am missing something. In terms of the best approach for the jurisdiction pre-hearing, what are your views on Steampowered's points that;

 

(a) it is settled law that mitigation of loss does not constitute acceptance of a fundamental breach of contract. (This sounds solid in light of the non-payment of salary.) and;

 

(b) that the employer's argument - that the employee should be punished for reducing the loss suffered (and hence the amount claimed in Tribunal) - is unattractive in principle. This seems particularly relevant in light of the original EDT producing an employment tenure of 2 years and one day, and hence the employee was eligible for statutory redundancy payment, the Employer withholding salary to force the claimant to terminate early (either by resignation or accepted breach), if deemed to have happened, also forced the claimant to render himself ineligible for statutory redundancy and therefore the act of mitigating the loss would have increased it significantly. Which is not fair.

 

Due to the non-payment of the salary, is it possible the Garden leave clause (not to work for anyone else) could be deemed unfair and consequently unenforceable (as a single term - as opposed to as an entire contract)? This would then support the argument that full term employment elsewhere was not fundamentally incompatible with the enforceable terms of the employment.

 

Is there any recognised legal phraseology suitable to describe the point I am making?

 

Thanks for all the continued help on this.

[becky2585]

Thanks Becky - unusual it is - The Hutchings v Coinseed case looks to be an example of a PILON altering the EDT. There was no PILON in this instance so I'm not sure the case could be applied in a supportive manner - unless I am missing something. In terms of the best approach for the jurisdiction pre-hearing, what are your views on Steampowered's points that;

 

(a) it is settled law that mitigation of loss does not constitute acceptance of a fundamental breach of contract. (This sounds solid in light of the non-payment of salary.) and;

 

(b) that the employer's argument - that the employee should be punished for reducing the loss suffered (and hence the amount claimed in Tribunal) - is unattractive in principle. This seems particularly relevant in light of the original EDT producing an employment tenure of 2 years and one day, and hence the employee was eligible for statutory redundancy payment, the Employer withholding salary to force the claimant to terminate early (either by resignation or accepted breach), if deemed to have happened, also forced the claimant to render himself ineligible for statutory redundancy and therefore the act of mitigating the loss would have increased it significantly. Which is not fair.

 

Due to the non-payment of the salary, is it possible the Garden leave clause (not to work for anyone else) could be deemed unfair and consequently unenforceable (as a single term - as opposed to as an entire contract)? This would then support the argument that full term employment elsewhere was not fundamentally incompatible with the enforceable terms of the employment.

 

Is there any recognised legal phraseology suitable to describe the point I am making?

 

Thanks for all the continued help on this.

 

In relation to your final point (being possible that the garden leave clause was unenforceable) then yes, it could be a valid argument - however not one which work work in your favour as I suspect that the contract would have to have ended for that to work. In order to legitimately discharge oneself from contractual obligations, there must be a fundamental breach of contract occuring by the other party. You are then in a position of either affirming the breach by choosing to continue with the contract, or you may accept the breach and treat the contract as coming to an end (here, that would be a Constructive Dismissal situation).

 

The Hutchings/Coinseed case is very similar to yours, but is not helpful to your situation. That particular case went against the employee, as they had a garden leave clause in their contract (like you) and repudiated the contract by working for a competitor.

 

Asserting that your employer breached your contract first would indeed permit you to treat the contract as at an end, however that wouldn't assist you as you would be giving them a further argument that the earlier termination date is the one which should be used (and unfortunately it is my gut feeling that this will be the case).

 

The Tribunal will look at the facts of the situation as well as the evidence, and the facts do seem to imply that the contract had ended on 11 March at the latest, when you undertook alternative employment (notwithstanding the clear previous fundamental breaches by the employer in failing to pay wages) rather than on the original termination date which would have been when your notice expired. That said, as you are unrepresented, it could be that the Tribunal will go your way as they are very unpredictable at times and they may find that there is no evidence for the termination date being changed, however I believe the parties' actions in the interim does indicate that neither party had any intention to continue to be bound by the contract.

 

Mitigation of loss is not a fundamental breach, as you say, but it does still go against the contract as you were not able to work for another employer during your period of garden leave (that would be different if a PILON clause had been exercised).

[RCW]

thanks Becky2585... hopefully the judge will agree that I had the right to mitigate the loss without accepting the breach. For the record I have examples of work requests that came through from the employer after the 11th of March. Do you think submitting these as evidence would help in demonstrating that both parties viewed the employment as ongoing after the 11th March?

 

They are basic work requests I.e. Could you provide your opinion of matter XYZ, etc... all via email.

[becky2585]

thanks Becky2585... hopefully the judge will agree that I had the right to mitigate the loss without accepting the breach. For the record I have examples of work requests that came through from the employer after the 11th of March. Do you think submitting these as evidence would help in demonstrating that both parties viewed the employment as ongoing after the 11th March?

 

They are basic work requests I.e. Could you provide your opinion of matter XYZ, etc... all via email.

 

Yes - did you respond to the emails?