Tribunal advice needed - complex question

[RCW]

Yes - I responded to all of them in full compliance with the requests.

[becky2585]

A few potentially helpful cases for you here (although some of them only vaguely helpful), and on slightly differing facts. The general legal principle the ET will look at is contained in Fitzgerald v University of Kent At Canterbury [2004], which confirmed that the ET will need to adopt a common sense approach at what had happened between the parties over time to determine whether there had been an agreed variation of the original notice which brought forward the termination date.

 

Secondly, Riordan v War Office [1961] confirmed that a notice period can only be shortened or extended by mutual consent.

 

Thirdly, in Secretary of State for Employment v Staffordshire County Council [1989] the Court of Appeal held that as the employer had chosen to shorten the notice period, this did not bring forward the termination date but simply waived the obligation on the employee to physically work his notice.

 

Finally, TBA Industrial Products Ltd v Morland [1982] held that the termination date was also not brought forward after an agreement for the employee to leave early (at the employee's request) and merely reflected a waiver of the requirement for the employee to work their notice.

 

These may be vaguely helpful but only to the extent that I suspect the case may go the other way. I could be wrong though as I haven't come across this in practice before, as it is not simply a matter of notice and counter-notice, but a lack of communication, an unidentifiable EDT and repudiatory breaches of contract by both parties!

[steampowered]

I personally would re-cast the points in post #22 as follows:

 

(a) The wording of s97 Employment Rights Act 1996 is very clear. 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 starting point is that three months' notice was given on 2 January 2013. The Tribunal should only depart from the clear wording of s97 where there is a clear justification for donig so. The section does not refer to the general common law principles of breach of contract.

 

(b) It is settled law that a will only terminate due to fundamental breach if the other party accepts that breach and makes a positive decision to bring the contract to an end, which must be communicated to the other party. In this case there was no decision to accept the employer's breach.

 

One authority for this would be Heymans v Darwin Ltd [1942] A.C. 356 at 361 - Alternatively, the other party may rescind the contract, or (as it is sometimes expressed) "accept the repudiation," by so acting as to make plain that in view of the wrongful action of the party who has repudiated, he claims to treat the contract as at an end, in which case he can sue at once for damages.

 

© In principle, any amendment to the EDT requires the agreement of the parties, and there was no agreement in this case. The existing case law where a variation to the EDT was found all involve an agreement between employer and employee.

 

Refer to Riordan v War Office [1959] 3 All ER 552 at 1054 - The giving of a notice terminating a contractual employment, whether by employee or employer, is the exercise of the right under the contract of employment to bring the contract to an end, either immediately or in the future. It is a unilateral act, requiring no acceptance by the other party, and, like a notice to quit a tenancy, once given it cannot in my view be withdrawn save by mutual consent.

 

(d) Alternatively, any decision to bring the contract to an end was made under duress, in that the employer stopped paying the Claimant his contractually due wages notwithstanding the continued existence of the contract and the terms of the dismissal letter. In this sense the decision to take a new job during the notice period was not voluntary and the employer should be estopped from relying on his own breach of contract in order to bring the EDT forward.

 

If you are going to use case law, you need to locate the actual judgments and bring copies with you, highlighting the particular part of the judgment which supports the point you are making. It is not enough just to name the case and hope the Tribunal knows about it.

[RCW]

thanks Steampowered - I hadn't realised the requirement for case law hard copies. Do these need to be in the pre-submitted evidence bundle or just present on the day?

[RCW]

Is it possible the wording of the respondent's letter (outlined in post 20 and re-quoted below) is sufficient to rescind the Garden leave clause not to work for anyone else? Obviously this would be supportive to the case if held. For the record the new employer was a competitor.

 

The letter states as follows:

 

"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."

[RCW]

One more question...

 

My understanding of the situation resultant of a repudiatory breach is that the victim must either accept the breach or elect to affirm the contract. If the contract is affirmed it continues under the "new terms".

 

Q: If an employee argues that a breached contract was affirmed (when the breach involved non-payment of salary) is there an implication that the employee elected for the employment to continue without the requirement for further payment? I know it is quite an abstract/nonsensical notion but the respondent has a team of experienced solicitors who will be present on the day, presumably on the lookout for this kind of thing...

[mariefab]

Is establishing the EDT the only issue to be determined at the Pre-hearing review in late October?

If so, are there any EDT dates suggested by the Respondent other than:

2nd January

15th February

11th March

[RCW]

Hi Mariefab

 

The purpose of the pre-hearing is to establish the tribunal's jurisdiction to hear the case. The respondent claims that the ET1 was submitted out of time due to the revised EDT. There are no other matters to be determined in the Preliminary Hearing.

 

In terms of dates, Yes there was one further suggested EDT referenced by the Employer, the 28th of Feb, the date of the Respondent's Fundamental Breach of Contract, I.e. the non-payment of the salary due on that date.

Edited October 7, 2013 by RCW

[mariefab]

If you like, I can prepare an outline for you to use/refer to at the hearing.

 

Can you please look through all your letters/emails etc. to see if there is anything written by you or the Respondent that would be inconsistent with the following statement.

 

" I commenced employment elsewhere because:

1. I needed the money.

2. I learned that, if I eventually had to make an Employment Tribunal claim to recover my losses, I would be required to demonstrate that I had made every reasonable effort to mitigate them. "

[RCW]

Wow - Mariefab that would be exceptional and beyond the call of Duty. I'd sincerely appreciate any assistance you might be able to provide in drafting an outline.

 

I will look through all communication to date on the matter and revert on the latter Q. For now, I can confirm that the ET1 originally references being forced to secure alternative employment prior to the EDT due to needing an income to pay the mortgage. To date I have not made reference to learning of the requirement to demonstrate mitigation in any formal correspondence. So certainly nothing would be inconsistent with the statement.

[RCW]

Also wondering if Section 203 (ERA 1996) might assist in countering the accepted breach claim by nullifying the garden leave term prohibiting alternative employment.

 

Section 203 states as follows:

 

203

 

(1) 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, or

(b) to preclude a person from bringing any proceedings under this Act before an [employment tribunal]

 

If, in light of the non-payment, 203.1.a voids the Garden Leave clause due to it limiting some other provision of the act then perhaps a sensible point to make...? I don't want to dilute the stronger case points and I'm not sure which specific provision it would purport to limit/exclude but presumably, in light of the non-payment, there could potentially be numerous provisions in in conflict?

[mariefab]

I don't think so.

 

An example of 203(1)(a) application would be to void a contractual clause that says the employer only has to give 1 weeks notice to an employee who had worked for them for 10 years; because s.86 of the Act makes provision for minimum notice periods.

 

Can you tell me on what date the Respondent discovered that you had started new employment.

[RCW]

Makes sense. I advised the respondent in person of the new employment on Mon 18th March.

[mariefab]

When you told them of the new employment did they indicate:

That they considered that you had breached the gardening leave clause.

That they would be starting disciplinary procedures against you/ dismissing you because of the breach.

That you had brought the contract to an end by commencing new employment.

If so, on what date?

[RCW]

No - they were apologetic that they had still not paid the outstanding salary, then congratulated me on the new position and wished me well in the role. Funnily enough it was a chance encounter with one of the directors as I was walking to work - neither party was expecting to meet and it was quite informal. Nevertheless I informed them of the new role out of courtesy then.

[mariefab]

Did they first come up with the fundamental breach nonsense in the ET3?

If earlier, when?

[RCW]

This was definitely first mentioned in the ET3. At the time of the chance meeting they had "lost my contract" (honestly you couldn't make it up), so may not have been aware of the garden leave clause. I sent them a scanned copy of the contract some weeks later when it became clear they were not able to find the original.

[RCW]

They also submitted the ET3 nearly 2 weeks late. Extension was granted on grounds that the directors did not realise which of them was meant to be dealing with it at the time. The judge stated the permissibility of submission extensions is less strict for the ET3 than the ET1.

[mariefab]

OK, First draft...

 

On 2nd January 2013 the respondent informed me that my role was redundant.

My contract of employment requires my employer to give me a notice period of 3 months.

Therefore, as notice commences the day after it is served, the effective date of termination was 2nd April 2013.

My ET1 was submitted, in time, on 1st July 2013.

 

The Respondent did not propose any alternate EDT date until after receipt of my ET1.

 

In the ET3 4 different EDT dates are suggested, by the Respondent, in order to make the submission of the claim out of time:

2nd January 2013

15th February 2013

28th February 2013

11th March 2013

 

1. 2nd January 2013.

My dismissal on 2nd March was not without notice.

My contract entitled me to the 3 months notice given.

I was not paid in lieu of my notice period, nor was this suggested.

I continued to attend the workplace until 15th February.

*See witness statement (WS1)

 

2. 15th February 2013.

I did not resign on 15th February.

I was informed (verbally) that I was being put on gardening leave.

The reason given was that the office was closing.

No-one suggested that I was being dismissed (again) on this date.

I believed that I was still within my notice period but, because my employer had no work for me to do, I wasn't required to attend the workplace.

 

 

3. 28th February 2013 & 11th March 2013.

The Respondents state that they fundamentally breached my contract by failing to pay me on 28th February.

They claim that by commencing new employment on 11th March I accepted the breach and thus brought the contract to an end.

The Respondent didn't inform me that they considered that they had fundamentally breached my contract so as to bring it to an end.

Nor did I inform the Respondent that I believed that they had done so.

If the Respondent contends that the failure to pay me amounted to a potential constructive dismissal; I would suggest that my failure to resign, in response, at any time affirmed the contract.

 

I commenced employment elsewhere because:

1. I needed the money.

2. If I eventually had to make an Employment Tribunal claim, I would be required to demonstrate that I had made every reasonable effort to mitigate my losses.

The Respondent had, in a letter headed 'Re: Redundancy' on 14th January, rescinded any restrictions in my employment contract governing future roles with competitors.

* See letter (L1)

So, I found work so that I could pay my mortgage etc.

 

I considered that I was still within my contractual 3 month notice period up to and including 2nd April and continued to hope that I would be paid the amounts due.

So, when the Respondent emailed asking for my opinion on work situations I responded with my suggestions on *list all dates*

* See emails (E1), (E2)....etc.

 

On 18th March I informed *name* (one of the Respondent's directors) that I had started new employment.

He/She apologised that the outstanding salary had still not been paid and congratulated me and wished me well in the role.

 

The Respondent didn't inform me that they considered that by commencing new employment I had brought my contract to an end.

The first indication I had that the Respondent considered my employment had ended earlier than 2nd April 2013 was in the Respondent's ET3.

I don't consider that the Respondent should be permitted to rely on what they describe as their own fundamental breach of contract to retrospectively alter the EDT when:

I wasn't even aware that it was such a breach,

I didn't resign, or otherwise indicate that I considered the contract had ended, in response to it.

Edited October 8, 2013 by mariefab

[RCW]

Mariefab this is excellent. My faith in humanity is in danger of being restored.

 

It's a great summary. I think the only/main point of exposure here is that the respondent will state that (irrespective of the discharge of the restrictive covenants) the claimant's Act of commencing the alternative employment is enough (by law) to accept the breach. The case differs to some of the high profile examples outlining elective theory for breach acceptance. Fundamentally they are not saying I was not entitled to affirm the contract, they are saying I elected to accept the breach by the conduct of an act that was incompatible with the contract. Since the contract was silent on how notice must be conveyed (in writing etc) I guess it will be for the judge to decide whether the new employment can be interpreted as acceptance of the breach.

 

Do you think it is worth adding a final tier of defense on this point, stating that; if (which is not accepted) the act of mitigating the loss by way of the new employment is deemed to be an unbeknownst acceptance of the employers breach then the Tribunal should consider that, since work was conducted after the 11th March, for the employer, by the claimant, that actions of both breach acceptance and affirmation were conducted by the claimant. In these unusual circumstances the opinion of Lord Hope should preside, as recorded in Geys v Société Générale (2012);

 

Geys v Société Générale (2012)

 

"...The automatic [breach acceptance] theory can operate to the disadvantage of the injured party in a way that enables the wrongdoer to benefit from his own wrong. The law should seek to avoid such an obvious injustice. Where there is a real choice as to the direction of travel, the common law should favour the direction that is least likely to do harm to the injured party. I agree that we should be very cautious before reaching a conclusion whose result is that a breach is rewarded rather than its adverse consequences for the innocent party negatived...

"

 

The facts of the case are reducible to a single notion:

 

"if the employer had paid the claimant's salary on Feb 28th as it was contractually bound to do, and all other case facts had remained the same, then the EDT could not possibly be disputed from 02nd Apr 2013; and the ET1 submission could not be considered out of time."

 

Just desperately trying to think of a way to avoid being nailed with their accepted breach argument...

Edited October 8, 2013 by RCW

[Pusillanimous]

Redundancy is potentially a fair reason to dismiss. BUT you had one day's notice, when correct procedure would have been to tell you in advance your job was 'at risk' and to consult with you (unless the firm suddenly became insolvent). From what you say, I would argue 'unfair dismissal' due to unfair redundancy process. You need to make a formal application to the tribunal to amend your claim. Include it together with the other claims you already have (you can argue in the alternative, so it does not matter if you have two possible reasons).

[RCW]

Thanks Pusillanimous - I have included the unfair dismissal claim within the original ET1 for exactly the reasons you outlined. It appears to be an open and shut case. The other claims are for non-payment of notice pay, holiday pay, redundancy pay, etc. All legitimate and well evidenced.

 

The matter I am trying to overcome in this thread - is that the claims may never be heard since the respondent has applied for (and been granted) a pre-hearing to consider the ET1 being out of time. The respondent has argued that commencing new employment constituted an acceptance of their fundamental breach of contract (failure to pay salary), and that this retroactively altered the EDT to 11th March 2013 (from 02 Apr 2013).

 

It is fair to say that if/when the claim moves to a full hearing I have good chance of success. Similarly if the claim is struck out by the Tribunal it would likely be claimed successfully in a civil court which does not observe 3 month deadlines... obviously funding the litigation would not be easy. It's a real predicament as I don't think I could move on without setting the record straight, this has been so hugely disruptive psychologically and financially - it is important that their actions are brought to public record.

 

Further to my own employment matters I believe there is sufficient evidence in the public domain for the directors of the business to be assessed for disqualification on some specific and serious breaches of UK law. Morally I have been juggling this one since there is little or no benefit to me in going Nuclear but my goodwill at this stage is moving beyond negative. Perhaps a decision for after the tribunal. In addition I found out two weeks ago that one of the directors is already disqualified and has been since 2007...

[Pusillanimous]

That is tricky. Hopefully the tribunal hearing the PHR, or judge sitting alone, will have done some homework on the matter in advance. I agree it would be wrong and unfair for the employer to expect you to forego seeking work elsewhere, whilst unpaid, and then penalise you for their own wrongful actions. 'In the interests of justice' is the best phrase that springs to mind. If you lose the PHR on the other party's claim, it might be worth taking the point of law to appeal to establish precedent, if none exists already. Ask for full written reasons if you lose that issue. Their not paying you seems key in this. It makes a difference to their claim.

 

It is a criminal offence to act as a director whilst disqualified and can attract a prison sentence, so you might want to report it.

 

There is a principle in law that a party should not gain from dishonesty.

[RCW]

Okay the general case and evidence bundle is coming together - slowly - and is due for submission on Sunday. Thanks to everybody so far - however more questions are emerging.

 

Since the salary non-payments are specifically claimed as unlawful deduction of wages, I understand the ET1 can be submitted up to three months from the date of the non-payment (as opposed to 3 months from the EDT).

 

If the Unfair Dismissal case is Struck Out as Out of Time due to the claimed Breach Acceptance altering the EDT to the 11th March, then the final salary would have been due for payment "on or around the 28th" [of March] as stated in the contract. Three months from this date would be "on or around the 28th" of June. The respondent is treating the "on or around" terminology to mean specifically the 28th and hence claims the ET1 for Unlawful Deduction of Wages is out of time by three days.

 

I can see from my records that the employer regularly paid the salary much later than the 28th. January Salary arrived 10 days late for example. Would these earlier delayed salary payments support that it was reasonable for the claimant to expect the March salary to be paid on a date that was after Apr 1st, therefore making the ET1 (submitted 1st July) in time.

 

Does the January salary arriving 10 days late constitute an affirmed breach? Or is late payment not a serious enough breach?

 

Is the "on or around the 28th" terminology in the contract binding to the 28th? or is there any legal precedent for establishing what is considered to be "around the 28th"? I can see this being another heavily contended point on the day.

[becky2585]

On or around doesn't necessarily give you an absolute entitlement to be paid on the 28th - and they did pay that one eventually. I'm not sure how much further that argument would get you?