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Jersey Unreported Judgments |
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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> McDonald v Parish of St Helier [2005] JRC 074 (03 June 2005) URL: http://www.bailii.org/je/cases/UR/2005/2005_074.html Cite as: [2005] JRC 74, [2005] JRC 074 |
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[2005]JRC074
royal court
(Samedi Division)
3rd June 2005
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Before: |
M. C. St. J. Birt, Esq., Deputy Bailiff with Jurats Allo and Newcombe. |
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Between |
Ralph George McDonald |
Plaintiff |
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And |
Parish of St Helier |
Defendant |
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Advocate D F Le Quesne for the plaintiff
Advocate M J Thompson for the defendant
judgment
deputy bailiff:
1. In this case Advocate Le Quesne submits that the Court should take the opportunity of effecting a significant change in the law relating to damages for wrongful termination of employment. Mr Thompson argues that that is a matter for the legislature.
The factual background
2. The plaintiff was employed as a driver/labourer by the Parish of St Helier ("the Parish") with effect from 22nd March 1990. His letter of employment incorporated by reference the conditions of employment ("the conditions") laid down by the States of Jersey Manual Workers' Joint Council ("the Council"). The conditions provided that the contract was terminable on a period of notice by the Parish varying with the length of service; on the facts of this case, eight weeks. The conditions also provided that where misconduct was alleged, there was a disciplinary procedure.
3. This procedure provided that, in cases of gross misconduct, there was to be an initial disciplinary hearing by officers of the Parish. An employee had a right of appeal, in accordance with the procedure for the settlement of differences contained in the Council's handbook, to the relevant committee of the Parish. A further appeal then lay to the Disputes Committee of the Council. This was an outside body whose members would not be officers or employees of the Parish. The decision of the Disputes Committee was expressed to be final and binding upon the parties.
4. The plaintiff had longstanding problems with his back. According to figures produced by the Parish, he was off sick for a total of 587 days between March 1990 and the termination of his employment in 1999 i.e. over two working years in total. Although it is not relevant to the decision, there were in fact additional days taken off because of his activities as the trade union representative for the Parish.
5. In 1996 it became clear that he could not continue to perform his duties as a driver/labourer in view of his back condition. We have heard evidence, inter alia, from the plaintiff and from Mr Martin Roberts who was personnel director of the Parish in 1996 and Deputy Greffier with responsibility for personnel and human resources by 1999. They both agreed that the Parish made great efforts not to dispense with his services in 1996. It created a job especially for the plaintiff. It fell into two parts. In the mornings he acted as a cleaner; in the afternoons he acted as Work Scheme Chargehand. This was a position of trust. It involved checking and supervising the work scheme operated by the Parish for able men receiving welfare payments whereby they swept and generally kept clean the streets of St Helier. The plaintiff's job description made it clear that the chargehand had to supervise the men by constantly checking that each man on the scheme was working where he should be and doing what he should be doing. The job description ended by saying "The success of the work scheme is entirely dependant on the integrity and conscientiousness of the chargehand because of the varying ability and calibre of the operatives." The plaintiff fully accepted in evidence that it was a position of trust.
6. In November 1998 it came to the Parish's attention that the plaintiff was taking unauthorised absences when he should have been supervising the work scheme. Observations were kept which showed that, over five consecutive days, he took a total of nine hours of unauthorised absence.
7. A disciplinary hearing was convened and on 7th April 1999 it was resolved to summarily dismiss him without notice on the grounds of gross misconduct. In accordance with the conditions, the plaintiff appealed to the Establishment Committee of the Parish. That Committee held a meeting on 10th May and upheld the decision to summarily dismiss him for gross misconduct.
8. The plaintiff then appealed to the Disputes Committee. On 7th June the Disputes Committee upheld his appeal. Whilst noting that the Parish was justifiably disappointed at the abuse of its trust, in particular by a trade union representative, it considered the decision was too harsh, particularly in view of the previous record of the plaintiff and of the fact that no warnings had been given. The Disputes Committee decided that the plaintiff should instead be issued with a final written warning, be required to repay the wages he had received during his unauthorised absences and be suspended without pay for one week.
9. The Parish put the second and third aspects of this decision into effect but not the first. On the contrary, on 16th June 1999 the Constable wrote to the plaintiff to the effect that the Parish was dismissing him with eight weeks' payment in lieu of notice. It is agreed that this was the required period of notice under the contract and that the plaintiff has received the relevant sum.
The nature of the dispute
10. In January 2001 the plaintiff issued an Order of Justice. This was subsequently amended. In broad outline the plaintiff alleges that, by dismissing him in June 1999, the Parish has breached three implied terms of the contract as follows:-
(i) that disciplinary matters should be dealt with solely in accordance with the provisions set out in the conditions i.e. it was bound by the decision of the Disputes Committee;
(ii) that the Parish would not, without reasonable and proper cause, conduct itself in a manner which was likely to destroy and/or damage the relationship of trust and confidence between employer and employee;
(iii) that the Parish would not terminate the plaintiff's employment without good reason and would only do so in good faith i.e. would not unfairly dismiss the plaintiff.
11. In its answer the Parish accepted that there was an implied duty of trust and confidence between the Parish and the plaintiff but denied the existence of the other two implied terms and denied any breach of any of the alleged implied terms. Subsequently the Parish admitted that it had acted in breach of contract on the basis that the plaintiff's dismissal was contrary to the disciplinary process provided for in the contract (in that the Parish had not acted in accordance with the decision of the Disputes Committee) and that the plaintiff was entitled to damages on that basis.
12. Accordingly, by the time the matter came to trial, there was no issue on liability. The Parish admitted having breached the contract of employment. The issue which remained was as to the quantum of damages which should be awarded for such breach. Both sides accepted that the longstanding position under English common law is that damages in such cases are limited to the wages for the required period of notice to terminate the contract. As the plaintiff has received eight weeks' wages in lieu of notice, the Parish argues that he is entitled to nothing more. The plaintiff, on the other hand, argues that the Court should develop the common law so as to permit the plaintiff to recover his real losses, namely the continuing loss of income until he reaches 65 and the loss of his pension rights.
13. Both parties agree that there is no previous judicial decision in Jersey which deals with the point; nor do either of them suggest that is any principle of Norman or French law which is of assistance. On the contrary, both are agreed (correctly) that in matters relating to damages for breach of contract, the Court has traditionally looked to English law for guidance.
The established common law
14. Mr Le Quesne admitted in both his written and oral submissions that he was asking the Court to take a very different approach to that which has been established for a very long time. We must begin therefore by summarising the established law. Happily, on this, there was no dispute between the parties.
15. Under the established law, damages for dismissal in breach of contract are limited to the amount the employee would have earned had he been given proper notice as provided for in the contract. The reason for this is that the employer has an unfettered freedom to dismiss an employee at will, with or without reason, provided that the contractual notice period is given. The employer can act unreasonably or capriciously if he so chooses but the dismissal is valid (per Lord Reid in Malloch -v- Aberdeen Corporation (1971) 2 All ER 1278 at 1282). To any claim by an employee that he has been dismissed without the proper notice or otherwise in breach of contract and that he should have damages for loss of earnings extending beyond the notice period, the employer can reply that he has the legal right to dismiss on notice at any time (with or without reason or without having to give any reason) so that the employee cannot prove on the balance of probabilities that his employment would have continued beyond the notice period. On the contrary, given that, by definition, the employer has decided to dismiss the employee, the high probability is that the employer does not wish the employment to continue and would therefore exercise his right to dismiss on notice if this were necessary.
16. In view of the agreement between the parties that this represents the established law, it is not necessary to cite in detail from the authorities. However reference can be made to the following: Addis -v- Gramophone Company Limited (1909) AC 448 at 490 per Lord Loreburn L C; Ridge -v- Baldwin (1964) AC 40 at 65 per Lord Reid; Johnson -v- Unisys (2001) 2 All ER 801 at 816 paras 38-42 per Lord Hoffmann.
17. That principle also applies, with minor modification, where the contract provides for a disciplinary procedure to be followed but the employer dismisses the employee without following the agreed disciplinary procedure. In Gunton -v- London Borough of Richmond upon Thames (1980) IRLR 321, the contract of employment was expressed to be terminable upon one month's notice but there was also an agreed disciplinary procedure. The Borough dismissed the employee on one month's notice but without following the agreed disciplinary procedure. The High Court held that the dismissal was in breach of contract and the employee was entitled to damages assessed on the basis that he was entitled to remain in the Borough's employment until normal retirement age subject to the usual contingencies. The Court of Appeal allowed the Borough's appeal. Shaw L J referred to the general right of an employer to dismiss on notice for any reason or for none and held that the disciplinary procedure did not have the effect of varying that right to dismiss on notice. The majority (Buckley L J and Brightman L J) held that the disciplinary procedure did disenable the Borough from dismissing the plaintiff on disciplinary grounds until the disciplinary procedure had been carried out. But the disciplinary procedure modified the power to dismiss on notice only to the extent that the two provisions were irreconcilable. Accordingly the existence of the disciplinary procedure did not affect the employer's right to dismiss on notice for any reason (including for no reason) other than a disciplinary one. For the purpose of calculating the loss suffered by the employee as a result of the breach of contract, it was to be assumed that the employer would have dismissed on notice immediately following the conclusion of the disciplinary procedure. It followed that the employee was only entitled to damages for lost wages in respect of the contractual period of notice (one month in that case) plus the additional period during which he would have remained in employment had the disciplinary procedure been concluded.
18. Gunton has been applied and followed in a number of cases including Focsa Services (UK) Limited -v- Birkett (1996) IRLR 325, Boyo -v- London Borough of Lambeth (1995) IRLR 50 and Janciuk -v- Winerite Limited (1998) IRLR 63. In the latter case Morison J, as President of the Employment Appeal Tribunal, conveniently summarised the position as follows at 63:-
19. We should add that we have not found any authority for the penultimate sentence concerning bad faith in any of the cases to which we have been referred. On the contrary, given that the law is clear that an employer may dismiss on notice capriciously, unreasonably or for no reason at all, it seems hard to see where any question of bad faith may be relevant. Be that as it may, even if there is such an exception, we do not consider that it applies in this case. We have had the opportunity of seeing and hearing Mr Martin Roberts give evidence. He denied that the Parish had entered the disciplinary process in bad faith; on the contrary it had intended to abide by the eventual decision and had always followed the decision of the Disputes Committee in every other case. We do not find that there is sufficient evidence to show that the Parish acted in bad faith.
20. The unfettered right of the employer to dismiss on notice, however capriciously, is of course subject to any other provision of the contract. For example, it would theoretically be possible for a contract to provide expressly that an employee could not be dismissed in any circumstances, even on notice, unless a disputes panel agreed to the decision. In that event the normal unfettered right of the employer to dismiss on notice would by agreement have been fettered to the extent provided in the contract. That would in turn affect consideration of the measure of damages in the event of a breach by the employer.
21. However that is not the case here. In this case the Parish bound itself to follow and be bound by the outcome of the agreed disciplinary procedure in cases of misconduct. But, applying the principles set out in Gunton, this only restricts the ability to dismiss in cases of misconduct. As Mr Le Quesne conceded, it does not abrogate the express contractual power of the Parish to dismiss on notice for no reason or for a non-disciplinary reason. One is therefore in the same position as in Gunton and the other cases save that, in this case, the disciplinary procedure has been gone through, but then ignored.
22. The plaintiff continued to be employed during the time taken for the disciplinary procedure. It follows that, applying the established common law as summarised above, the damages recoverable by the plaintiff for the Parish's admitted breach of contract in failing to comply with the disciplinary procedure is limited to eight weeks' wages. He has been paid that sum and accordingly he is entitled to no further damages. Indeed Mr Le Quesne accepted that, on the basis of the established common law, the plaintiff's claim would fail.
An alternative approach
23. Mr Le Quesne submits that there are three alternative approaches which the Court might follow in order to develop the established common law.
(i) The first approach
24. He submitted that the Court should imply a term along the following lines where there is an agreed disciplinary procedure in an employment contract:-
(i) Where the matter falls within the terms of the disciplinary process, a sanction (including dismissal) will not be imposed without using the process; where it falls outside there will not be an unfair dismissal;
(ii) where the matter falls within the terms of the disciplinary process, the only sanction imposed will be that resulting from the process;
(iii) where the matter falls within the terms of the disciplinary process, the employer cannot avoid that process, or its consequence, for instance by dismissing the employee on notice without using the disciplinary process.
He argues that, without this last implied term, the contractual disciplinary process is pointless, for the employer, rather than embarking upon the disciplinary process, will merely dismiss on notice without giving any reason. Alternatively, the employer will do as occurred here, which is to go through the disciplinary process and then ignore its result.
(ii) The second approach
25. As an alternative, he submits that the Court should, unless prevented by an express term of the contract or by necessary implication, imply in every contract of employment a term that the employer will not unfairly dismiss the employee. Examples of unfairness would be to dismiss on no reasonable grounds or in breach of an agreed disciplinary procedure.
(iii) The third approach
26. Alternatively, the Court could imply a term of trust and confidence which, unlike in England, would extend to cover termination of the contract as well as matters during the continuation of the contract. In effect, this is an alternative formulation of an implied term of unfair dismissal with a different juridical basis; but any dismissal which was unfair would be likely to be in breach of the implied term of trust and confidence owed by the employer.
The modern authorities
27. We turn next to consider the modern authorities. We were helpfully taken through them in detail by counsel and the Court has also had the opportunity of reading them following the hearing. However, in the interests of brevity, we propose to keep citations to a minimum.
28. In Malik -v- Bank of Credit & Commerce International SA (1997) 3 All ER 1, the House of Lords held that an employer was under an implied obligation that he would not, without reason and proper cause, conduct his business in a manner likely to destroy or seriously damage the relationship of confidence and trust between an employer and an employee, and an employer who breached the trust and confidence term would be liable if he thereby caused continuing financial loss of a nature that was reasonably foreseeable.
29. In Johnson -v- Unisys Limited (2001) 2 All ER 801, an employee was unfairly dismissed by an employer which failed to comply with its disciplinary procedure. He was awarded compensation for unfair dismissal by an employment tribunal at the maximum level permitted by the statute. He then brought proceedings before the court claiming greater losses because of a continuing inability to find work on the basis that the fact and manner of his dismissal had caused him to have a nervous breakdown. He relied on the implied term of mutual trust and confidence recognised in Malik, contending that the employer had breached that term by failing to give him a fair hearing and by breaching its disciplinary procedure.
30. The majority of the House of Lords rejected his claim. In our judgment the headnote accurately reflects the reasoning of the majority:-
Lord Steyn dissented and would have held that the implied term of trust and confidence extended to termination of employment so as to provide a remedy for unfair dismissal.
31. Subsequently, in Eastwood -v- Magnox Electric Plc (2004) 3 All ER 991 the House of Lords had to consider where the boundaries of the decision in Johnson lay. In Eastwood the plaintiffs had been awarded compensation for unfair dismissal by an employment tribunal. They then brought actions in the courts for financial losses flowing from psychiatric illness caused by pre-dismissal unfair treatment. The House of Lords reiterated that, following Johnson, there was no common law remedy for unfair dismissal. However, Johnson did not prevent recovery for a cause of action acquired before dismissal. Although in the ordinary course, an employer's failure to act fairly in the steps leading to dismissal did not of itself cause the employee financial loss because the loss arose when the employee was dismissed and arose by reason of the dismissal, there might exceptionally be cases where financial loss flowed directly from the employer's failure to act fairly when taking steps leading to dismissal e.g. where an employee suffered financial loss from psychiatric or other illness caused by his pre-dismissal unfair treatment. In such cases the employee had a common law cause of action for breach of the term of trust and confidence which preceded and was independent of his subsequent dismissal.
32. One of the reasons, (albeit not the decisive one) given by Lord Hoffmann in Johnson for holding that it was difficult to apply the implied term of trust and confidence to dismissal was that, under common law, a power to dismiss on notice was an express power to dismiss for no reason or capriciously and an implied term of trust and confidence applied to termination and requiring the employer only to dismiss fairly would be inconsistent with that express term. That view was reflected in the decision of the Privy Council in Reda -v- Flag Limited (2002) IRLR 747. In that case the contract of employment contained an express power on the part of the employer to terminate without cause and this power was exercised, as the trial judge found, for the purpose of denying the relevant employees the benefit of a new stock option plan to which they might have become entitled if they had remained in employment. The Privy Council upheld the decision of the Bermuda Court of Appeal and dismissed the employees' claim. In our judgment the head note accurately reflects the grounds for the decision on this point in the following passage:-
It is true that the Privy Council was dealing with an express power to dismiss without cause whereas Lord Hoffmann was dealing with the usual provision for termination on notice, which the common law has always held is to be construed as an express power to terminate without cause; but there are clearly very strong parallels.
The Jersey statutory position re unfair dismissal
33. Unlike in England, Jersey has no statutory provision for unfair dismissal. However the States have passed the Employment (Jersey) Law 2003 ("the 2003 Law") which has received the sanction of Her Majesty in Council and was registered in the Royal Court on 5th December 2003. It has not yet been brought into force. At the time of the hearing of this case it was expected to be brought into force on 1st April and an Appointed Day Act to that effect had been lodged in the States. However, because of difficulties over the draft Employment Relations (Jersey) Law (which deals with the recognition of trade unions) the Appointed Day Act was withdrawn. The States have since resolved that the 2003 Law will be brought into force on 1st July 2005.
34. Part 7 of the 2003 Law deals with unfair dismissal. Article 61 establishes a statutory right not to be unfairly dismissed. A complaint of unfair dismissal will be dealt with by the Jersey Employment Tribunal, a body to be established under the Law. The remedy for unfair dismissal will be an award of compensation by the Tribunal. Under Article 77(2) the Employment and Social Security Committee will, by Order, specify a scale of compensation which may be awarded by the Tribunal. No such Order has yet been made but one will be necessary before the Law is brought into force. Article 73 provides that the provisions for unfair dismissal do not apply to persons employed for less than 26 weeks or for less than 8 hours a week. Article 76(2) provides that, subject to exceptions, claims must be brought within 8 weeks of dismissal.
35. Although by no means identical to the English provisions, the States have adopted a broadly similar approach to Parliament, in that it has resolved to create a stand-alone remedy for unfair dismissal applied by a body other than the courts, with limitations upon who can complain and, almost certainly, with limits on the compensation which can be awarded.
The plaintiff's submissions
36. In his eloquent and powerful written and oral submissions, Mr Le Quesne argued that the established law was no longer suitable in the present day and did not adequately protect an employee against high-handed or wrongful conduct by an employer. Given that employment was a highly significant component of an individual's life and that, following dismissal, there was in reality often an on-going loss in terms of continued loss of income because of a failure to find a similarly paid job, it was unjust that damages should be artificially restricted to the period of notice provided for under the contract, no matter how unfair or unreasonable the dismissal by the employer had been. The inadequacy of the common law had been recognised by Parliament in England which had introduced the remedy of unfair dismissal. The Jersey courts should take the opportunity of developing the law in accordance with modern day requirements.
37. In support, Mr Le Quesne referred to a number of observations in Johnson and Eastwood which suggest that, had there not been the statutory framework for unfair dismissal, their Lordships might have been willing to develop the common law so as to provide a remedy for unfair dismissal, probably by reference to the implied term of trust and confidence. See for example Lord Nicholls at para 2 of Johnson and para 11 of Eastwood; Lord Millett at paras 77 and 79 of Johnson. He relied of course also on the dissenting speech of Lord Steyn in Johnson. Lord Hoffman was more cautious but he too did not rule out the possibility altogether (see paras 42-50 in Johnson).
38. Mr. Le Quesne argued that Jersey was in just such a position. Although the States had passed legislation introducing a statutory remedy for unfair dismissal, it was not in force. The Court should therefore develop the law as their Lordships might have done had the English statutory provisions not been in force. It would be wrong for the Court to hold that the plaintiff should be left without a remedy just because a statutory remedy was going to be introduced in the future. That would be to render an injustice to the plaintiff.
39. Although he commended the dissenting speech of Lord Steyn, Mr Le Quesne accepted during the course of argument that he would not be making the submissions he was if the Jersey statute were actually in force. He could see the logic of the majority decision in Johnson and he agreed that it would really be very odd to develop a parallel customary law remedy of unfair dismissal (or something very similar) if the statute were in force. However, the statute was not in force and the Court should therefore develop the customary law.
Decision
40. The customary law does not stand still and we agree that, in the absence of legislation, it would in theory be open to the law of Jersey to develop along the lines suggested by Mr Le Quesne. But we see no answer to the arguments of the majority in Johnson. As Lord Millett put it at para 80 (commenting on the effect of introducing a common law remedy for unfair dismissal in the face of the statute):-
Lord Nicholls summarised the arguments very persuasively at paras 11-14 of Eastwood and ended by saying at para 14:-
41. Does it make any difference that the Jersey legislation is not yet in force so that, for example, we do not know exactly what limits there may be upon the compensation available pursuant to the statutory remedy? We do not think so. To use Lord Nicholls' expression, the States have occupied the field. They have passed legislation in the knowledge of what the established customary law provides. As with the English legislation, the States have chosen not to provide simply for a statutory implied term against unfair dismissal, leaving the courts to award damages on the usual contractual basis. They have, as in England, decided to remove jurisdiction in such cases to a specialist tribunal, to provide very short time limits, to provide a mechanism for limiting the amount of compensation and to provide that certain employees should be excluded from any remedy. If the Court were to develop the customary law as Mr Le Quesne suggests, there would, immediately upon the coming into force of the legislation, be the inconsistency and recipe for chaos envisaged in Johnson. Indeed, were we to find for the plaintiff and were the Parish to appeal, it seems probable that the Court of Appeal would have to deal with a position where the statute was in force and it was having to decide whether to develop the customary law in a manner inconsistent with that legislation.
42. Mr Le Quesne's answer to this was that, once the legislation was in force, the Court could address the problems at that time, probably by reverting to the established common law although it might try and find other ways of achieving consistency between the customary law and the statutory provisions. Not surprisingly, he was unable to explain exactly how this might be achieved. Alternatively he submitted that the States could legislate to clear up any inconsistencies.
43. We do not think that this would be an appropriate way in which to proceed. The fact is that, although the statute may not yet actually be in force, the legislature has made a decision as to how it wishes to proceed. The legislation has been passed and is ready to be implemented. In our judgment it would not be proper for the Court, in these circumstances, to develop the customary law in a manner which it knows is quite inconsistent with the path chosen by the legislature. It would be a recipe for chaos for the Court to proceed as Mr Le Quesne suggests. It would be different if the States had simply been at the consultation stage, with no certainty as to what, if any, legislation might be enacted. In those circumstances, if the Court were to develop the customary law, the States would be able to take note of this and decide whether the customary law as developed met the needs of society or whether a statutory remedy was still required. The statutory remedy would be structured to take account as necessary of the developed customary law. But that is not the case here.
44. Mr Le Quesne urged strongly that rejection of his submission would be to cause an injustice to the plaintiff. We do not agree. His case is being judged by the established law. He launched the proceedings knowing that, on the basis of the established law, he would fail. He had to face the task of persuading the Court to make a significant change to the law. The fact that the Court might - we emphasise might - have agreed to do so in the absence of any statute is not, in our judgment, something which amounts to injustice. The Court is simply resolving to decide this case on the basis of the existing law.
45. We would add that we are by no means certain that it would have been right to develop the law as submitted by Mr Le Quesne even in the absence of the Jersey statute. Whilst we see the arguments for doing so as mentioned by some of their Lordships, we also note the views of Lord Hoffmann and Lord Millett (with whom Lord Bingham appears to have concurred) that there were certainly powerful arguments for leaving reform of such a sensitive social and economic area to the legislature.
46. We must consider finally whether there is any difference between Mr Le Quesne's second and third approaches (which in effect by one route or another introduce a remedy akin to unfair dismissal) and his first approach.
47. He makes the point that, while his second and third approaches are in effect alternative formulations which provide for a general prohibition on unfair dismissal, his first approach is narrower. It is restricted to a dismissal which is contrary to an agreed disciplinary procedure. He submits that, even if the reasoning in Johnson persuades the Court to find against him in relation to the second and third approaches, that reasoning is not necessarily applicable to the first approach.
48. We agree that the first approach is narrower, but the effect of developing the established law so as to imply a contractual term of the nature which Mr. Le Quesne suggests, would in reality have the same consequences as the wider approaches. A failure by an employer to follow an agreed disciplinary procedure is a classic example of a decision which would be unfair within the meaning of the statute. Thus, if we were to accede to Mr Le Quesne's first approach, the position, once the 2003 Law is in force, would be that an employee who is dismissed in breach of an agreed disciplinary procedure will have two alternative and inconsistent remedies:-
(i) He may apply to the Employment Tribunal for a finding of unfair dismissal. But he must bring the claim within eight weeks; he must not be an employee who has been employed for less than twenty six weeks or for less than eight hours a week; and the compensation which the Tribunal may award will be limited to such amount as may be prescribed by Order made pursuant to the statute.
(ii) Alternatively he may apply to a differently constituted tribunal, namely this Court. In that event he will have up to ten years from the date of dismissal to bring his action; he may bring the action even if he has been employed for less than twenty six weeks or works for less than eight hours a week; and damages will be completely at large.
Thus all the potential for chaos and inconsistency envisaged in Johnson would be equally applicable if we were to adopt the first approach even though it is narrower than the other two approaches.
49. For these reasons we dismiss the plaintiff's claim.
Decision on the facts
50. In case a higher court should rule that we should have developed the law as suggested by Mr Le Quesne, we think we should state what we would have awarded had we accepted the submission that damages should not be restricted to earnings during the eight-week notice period.
51. Mr Le Quesne submitted that the plaintiff is entitled to recover his loss of earnings on the basis that he would have remained employed by the Parish until the normal retiring age of 65. In relation to losses until the date of trial, the figures are easily established. As to future losses, we agree that it is sensible to use the Ogden Tables - whose full name is 'Actuarial Tables with Explanatory Notes for use in Personal Injury and Fatal Accident Cases' - to assess the appropriate multiplier to be applied to the estimated annual loss of wages.
52. However we must first decide whether, on the balance of probabilities, the plaintiff would, subject to the normal contingencies of life which are allowed for in the Ogden Tables, have remained employed by the Parish until he was 65. To decide this we must consider what in fact has happened to him since his dismissal.
53. Following his dismissal on 16th June, he obtained a temporary job from 2nd July to 9th September 1999 working in a laundry for the Health and Social Services Department.
54. He then obtained permanent employment from 14th September 1999 with Pentagon (Jersey) Wholesale Limited as a driver. This involved delivering building materials. According to the plaintiff's evidence he was expected to make a certain number of deliveries every day but had difficulty in doing so and fell behind the required schedule. He was dismissed by Pentagon on about 12th November 1999. He said that no reason was given but he assumed that it was because of his failure to perform satisfactorily by complying with the required delivery schedules.
55. He was then taken ill with back problems and received sickness benefit from 25th November 1999 until 27th February 2000.
56. On 22nd (sic) February 2000 he began work as a handyman with Regal Construction (Jersey) Limited. According to a letter from the managing director of Regal the plaintiff did not impress them as a handyman and was therefore reduced to the position of a general labourer. He left of his own volition in June 2000 and moved immediately to TNT Offshore Express, where he was employed as an HGV driver for greater wages.
57. There is a dispute as to the circumstances in which he came to leave TNT which we must deal with. We heard evidence on this point from Mr Terry Brown, manager of TNT in Jersey at the material time, and from the plaintiff. There is no dispute that the plaintiff's duties involved a delivery round of general freight. He was one of a number of drivers. On four days a week drivers were required, after completing their ordinary round, to go up to the airport to collect express freight and they would then carry out a second delivery round. Mr Brown had received complaints from the other drivers that the plaintiff often did not arrive at the airport until after the other drivers had finished sorting out the freight. They complained that he was not pulling his weight as a member of the team.
58. According to Mr Brown, on the day the employment ended (about 14th July 2000) he happened to drive past the plaintiff's lorry at a time when it was parked outside the Limes in Green Street. Mr Brown went about his business and returned some time afterwards to find that the plaintiff was still parked there. As a result Mr Brown thought that the plaintiff must have broken down. He stopped and approached the plaintiff who was sitting in the driver's cab. According to Mr Brown the plaintiff was very aggressive and asked in forceful and expressive terms whether Mr Brown was following him. Mr Brown concluded that the plaintiff was taking an unauthorised break. He appeared to be reading his paper when he should have been at the Rue de Pres depot. As a result, Mr Brown arranged to see the plaintiff in his office that afternoon. At that meeting there was a fairly heated discussion during which Mr Brown informed the plaintiff of the complaints which he (Mr Brown) had received. The upshot, according to Mr Brown, was that the plaintiff told him where to put his job and resigned with immediate effect. Mr Brown stated in evidence that he would not have employed the plaintiff again.
59. According to the plaintiff, on the other hand, he was simply taking a legitimate break for his lunch and he had done nothing wrong. He was dismissed by Mr Brown although Mr Brown did ask him (the plaintiff) to stay on for a week; he assumed that this was in order to give TNT time to find another driver. He declined that suggestion.
60. Having had the opportunity of seeing both witnesses give evidence, the Court has no hesitation in accepting the evidence of Mr Brown as to the fact that he had received complaints from other drivers that the plaintiff was in effect shirking and not pulling his weight, and that the plaintiff had taken an unauthorised break when parking his van outside the Limes when he should have been getting on with his work. We also accept his evidence that the plaintiff resigned rather than being dismissed, but we think that nothing turns on this. The plaintiff immediately found new employment with PDB Builders as a labourer commencing on 14th July 2000. This only lasted until about the 4th September 2000 but, according to the plaintiff, he was told by Mr Cowieson, the director, that the firm did not have much work. Mr Cowieson offered to put in a good word for him at Hacquoil & Cook, whom he knew were looking for a driver. That is what happened and the plaintiff began work at Hacquoil & Cook as a driver on 4th September and has been employed by that firm ever since.
61. Having considered the evidence, our assessment of the position is as follows. The plaintiff was dismissed by the Parish for a gross breach of trust by taking time off when he was supposed to be supervising others. He found a temporary job to begin with and then was employed by Pentagon. However he was dismissed for poor performance. At Regal's he was not impressive as a handyman and was reduced to being a labourer. He left that firm for TNT but there he did not pull his weight and matters eventually came to a head because he was spotted taking unauthorised time off. He has however now been employed by Hacquoil & Cook for more than 4½ years and there is no evidence of any difficulty in connection with this employment.
62. We conclude that it took the plaintiff some time really to learn the lesson which he should have learned as a result of his dismissal by the Parish. He had clearly not learned the necessary lesson by the time of his employment with TNT, where he was not pulling his weight and took unauthorised absence. We find that the penny eventually dropped after his problems at TNT and he realised that, if he went on in the same fashion, he would have repeated employment difficulties. In effect the leopard did not change his spots until July 2000 following the termination of his employment with TNT. He then realised that he must pull his weight and not take off unauthorised time.
63. As already mentioned, we heard evidence from Mr Martin Roberts who is now Human Resources Director of the Parish. He worked closely with the plaintiff and was actively involved both in the decision to create a special job for the plaintiff in 1996 and the decision to dismiss him in 1998/9. He made it clear that the dismissal by the Parish had been because of a loss of trust in the plaintiff. He said that, by 1999, he did not believe the plaintiff would change his ways. He said that, if the plaintiff had been retained on a final warning as recommend by the Disputes Panel, he thought that the Parish would have dismissed the plaintiff if there had been any recurrence of unauthorised absence. He thought it highly unlikely that the plaintiff would have remained with the Parish until he was 65 given his previous record.
64. We have already stated that we find that the plaintiff did not change his ways until he had suffered further adverse consequences as a result of his conduct at TNT. Only then did he realise that, if he carried on shirking and taking time off, he would face repeated dismissals. We find therefore that, if the plaintiff had not been dismissed by the Parish in June 1999 but had been retained on a final warning, the high probability is that he would have re-offended within a short delay by taking off further unauthorised time. It is of course not possible to say for certain if or when this would have occurred but we do not think it would have taken long given what actually occurred during the year after he left. We find that, had there been even one recurrence of unauthorised absence, the Parish would have dismissed him and any such decision would have been upheld. Being generous to the plaintiff we are willing to assume that he might have lasted up to one year before re-offending and being dismissed. Accordingly we hold that the maximum claim for loss of wages is one year from 16th June 1999.
65. The actual loss would be the difference between what he would have earned between 16th June 1999 and 15th June 2000 had he remained employed by the Parish and the amount which he actually received during that period by way of earnings from his other employers, the eight weeks' wages in lieu of notice paid by the Parish and the sickness benefit he received from 25th November to 27th February totalling £2437.20. This would give the gross loss for the period. From this would fall to be deducted the 5% pension contribution which he would have paid had he remained with the Parish and an appropriate allowance for income tax so as to produce the net loss.
Loss of pension
66. Had he remained in the employment of the Parish until he was 65 the plaintiff would have received a pension of 34.1% of his closing salary. His pension contributions ceased upon his dismissal in June 1999. He has therefore suffered a loss in that, when he reaches 65, his pension will be less than it would have been if he had carried on working for the Parish. None of the employments which he has followed since then have contained a pension provision.
67. The parties have jointly instructed a firm of pension experts, namely BWCI Consultants Limited ("BWCI"). BWCI advise that the measure of loss in respect of the pension is the amount which would be required today to purchase a pension (payable when he reaches 65) which would replace that which he has lost by reason of its dismissal. They argue that there are at least two different methods of estimating such a sum and it is clearly not an exact science because there are so many variables. The parties have agreed to proceed on the basis of the second of these methods known as the 'Ogden Tables Method'. On this basis the unchallenged evidence of BWCI is that, assuming that the plaintiff had left his accrued contributions to June 1999 in the Parish pension fund, the amount which would be required to purchase a pension which would make up the difference between the deferred pension which he will receive at 65 and the pension he would have received had he remained with the Parish until 65, is £55,400.00.
68. However there is a complication. In September 1999 the plaintiff withdrew the accrued value of his pension contributions. The sum actually withdrawn at the time was £6,242.77 which equates today to £7,504.00. There is therefore no deferred pension in existence. The plaintiff has therefore to start from scratch. On this basis, the lump sum necessary today to purchase a pension commencing at 65 equivalent to that which he would have received had he remained with the Parish until 65, is £115,900.00.
69. The Parish argues that the plaintiff acted unreasonably in withdrawing his pension contributions and therefore this is a loss for which the Parish should not be liable; it does not follow directly from the breach of contract. The plaintiff said in evidence that he withdrew the fund because he needed the money to pay his bills. Whether or not the plaintiff acted unreasonably is a matter of fact, not law.
70. According to the agreed figures the plaintiff's annual income from his employment with the Parish in 1999 was £18,274.43 (being £19,236.27 minus £961.81 in respect of his pension contribution). This equates broadly to a weekly income (before tax) of £351.00. He was given eight weeks' pay in lieu of notice. Accordingly he was effectively paid by the Parish at this rate until 11th August 1999. He began temporary work with the Heath and Social Services Department on 2nd July. Accordingly he was in fact receiving a double income from that date until 11th August and thereafter a single income from Health and Social Services (although we do not know what that was) until 9th September. On 14th September he began employment with Pentagon at a weekly wage of approximately £255.00 per week i.e. a weekly reduction of about £100.00 compared with what he was earning at the Parish. His wife was also working and she earned £16,846.00 during 1999.
71. The plaintiff wrote to withdraw his accrued pension contributions on 12th September 1999, saying that he was finding it very hard to find work and his funds were running out. The question is whether he acted reasonably in this respect, so that the consequences of withdrawing his pension contributions can be said to flow from the Parish's breach of contract for the purposes of remoteness of damage. On the one hand, he had been receiving a double income to 11th August and it is hard to see why he should suddenly have been so short of funds as early as 14th September. As against that, by that date, he was receiving only one income and he could foresee (on the basis of his forthcoming employment with Pentagon) an ongoing weekly loss of £100. Was it reasonable in those circumstances to forego altogether the deferred pension which he would have received at 65 in exchange for £6,242.00?
72. The burden of proving that the plaintiff has acted unreasonably in incurring this loss lies on the Parish. We find that the Parish has satisfied this burden and that the plaintiff did act unreasonably. He has not produced any evidence to show that his financial position was such that he had to have access to his accumulated pension fund, with all the damage which that did to his pension provision. Given the period for which he had received a double income (from the Parish and his temporary employment with Health and Social Services) and given the fact that he had secured permanent employment with Pentagon (albeit at £100.00 per week less) we do not see that his financial position can have been so adversely affected that it was reasonable for him to take the very serious step of withdrawing his pension contributions. Conversely, by his actions, he increased the loss which he suffered by reason of his dismissal to the extent of £60.500.00 (the difference between £115,900.00 and £55,400.00 - see paras 67 and 68 above).
73. Accordingly, we hold that, had we found that the plaintiff could have been expected to stay with the Parish until 65, we would have assessed his pension loss in the sum of £55,400.00 (being the amount necessary to purchase an equivalent pension on the assumption that he had left his accrued contributions in the scheme).
74. However we have held that damages are to be assessed on the basis that the plaintiff would not have been employed by the Parish beyond 15th June 2000 in any event. Thus, any loss from a lack of pension contributions after that date is not recoverable. We have had no evidence on this basis. Accordingly, should it become necessary, further advice from BWCI would be necessary so as to calculate the plaintiff's loss in relation to his pension on the assumption that:-
(i) The plaintiff's employment with the Parish would have terminated on 15th June 2000; and
(ii) his decision to withdraw his pension contributions in September 1999 was unreasonable and consequently any loss which flows from that decision is not recoverable from the Parish.
Summary of conclusions
75. In summary we hold as follows:-
(i) We are not willing to make the significant change to the customary law suggested by Mr Le Quesne. Accordingly damages recoverable as a result of the Parish's breach of contract in dismissing the plaintiff contrary to the agreed disciplinary procedure are limited to the amount he would have earned during the eight week notice period. As he has been paid that sum in full, the claim fails.
(ii) If we are wrong on this first point:-
(a) We find that the plaintiff would in any event have been dismissed by the Parish not later than 15th June 2000. Loss of wages should therefore be assessed by reference to a period ending on that date.
(b) The plaintiff acted unreasonably in withdrawing his pension contributions in September 1999. Damages in respect of his pension loss must therefore be calculated on the assumption that the accumulated pension contributions had not been withdrawn.
