Appeal No.	 EAT/647/00

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 7 November 2000

Before
SIR CHRISTOPHER BELLAMY QC
MR A E R MANNERS
MR A D TUFFIN CBE

MRS C M THOMAS	APPELLANT

BENNETT, OAKLEY & PARTNERS (A SOLICITORS FIRM)	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING 

Revised

	APPEARANCES

Appellant	ROBIN WHITE
(of Counsel)
Instructed by:
Messrs Dean Wilson Laing
Solicitors
96 Church Street
Brighton BN1 1UJ	

SIR CHRISTOPHER BELLAMY QC

1	This is an appeal from the Decision of the Employment Tribunal sitting at Brighton, the Extended Reasons for which were sent to the parties on 27 April 2000.  In that Decision, the Tribunal dismissed the Applicant’s claim for wrongful dismissal, it being accepted that she had no claim for unfair dismissal as she had been employed by the Respondents for less than two years.  

2	It appears from the Decision that the Applicant was employed as an audio typist from 6 May 1997 in the office of the Respondents, who are solicitors.  She apparently left work on 26 February 1999 to have an operation, and on returning home, she received a letter from the Respondents dated 2 March 1999 dismissing her on 7 days notice.  She has received a payment which has dealt with her rights as regards the period of notice.  

3	Her claim before the Tribunal essentially was that there was an express or implied term of her contract, according to which she could only be dismissed by a fair process.  If such a process had been followed, so it was argued, it would have meant that she would have continued in employment until at least 6 May 1999 and thus qualified, at least potentially, for an unfair dismissal claim.  On the basis of the implication of such a term, the Tribunal would then have had to assess her damages, taking into account the possibility of the loss of her right not to be unfairly dismissed.  

4	The Tribunal rejected that claim and we can briefly cite some of the main paragraphs in which the Tribunal gives its reasons.  At paragraph 9 the Tribunal says:
“9    At the present time we make no finding as to why the respondents dismissed the applicant.  However, what is clear is that having decided to dismiss the applicant, the respondents were keen to avoid a situation whereby because of length of employment she obtained a statutory right not to be unfairly dismissed.”
At paragraph 10:
“10     We are today exercising the contract jurisdiction of the Tribunal.  To that extent, in one way we are not concerned with concepts of fairness.  However, we record that if it became necessary to make a finding, we would have no hesitation in finding that having regard to ordinary and indeed statutory rights or concepts of fairness, the respondent’s treatment of this applicant was unfair and offended the cannons of good employment practice”.

5	Against that background, the Tribunal then went on to ask itself whether the Applicant had a claim in respect of her wrongful dismissal.  They deal with that at paragraph 12 in these terms:
“12 …….First of all, we accept that every contract of employment implies a duty of mutual trust and confidence between employer and employee.  In our view, it would be pushing the bounds of that duty too far to say that a dismissal simply by itself  is capable of amounting to a breach of that duty.  The duty subsists in relation to the employment and if an employer in accordance with the contract dismisses an employee, then the act of dismissal in our view does not amount to ” 
“breach of”, I think is to be inserted in the relevant paragraph
“the duty of mutual trust and confidence”.

6	The Tribunal then goes on to discuss what the situation would be if there were procedures in force, as a matter of contract, which had to be followed, in order lawfully to terminate the contract, and they ask themselves were there such procedures in the present case, either expressly or by implication.

7	Dealing with the question of implication, the Tribunal asks itself at paragraph 15 whether there was a duty to follow certain procedures before determining the contract.  They said at that paragraph:
“We think it can be put in one of two ways.  First of all, is there implied in any contract of employment a condition that in dismissing an employee, the employer would act fairly or reasonably or according to some other cannon of conduct.  We do not think it is possible to imply such a contractual duty.  There is no inherent contractual right not to be unfairly dismissed.”

The Tribunal then went on to consider the particular circumstances of this case, and whether there was the ground for implying some such duty as a result of the particular contract that they were concerned with here.  In that connection there was apparently a reference to “Disciplinary Rules - see staff manual” in the contract, but there were apparently no disciplinary procedures in fact provided, certainly no procedures that had been drawn to the Respondent’s attention or had become incorporated into her contract - see paragraphs 16 and 17 of the Tribunal’s Reasons, paragraph 18, on that point, the Tribunal conclude:
“18     It will therefore be noted that in relation to disciplinary procedure, apart from referring to a disciplinary procedure, there are no contractual terms or indeed any terms to be so found”.  

8	They were then invited by the Applicant to imply some terms and they rejected that possibility, saying that they did so with “a great deal of regret” at paragraph 19 of their Reasons.  They said, in effect:
“We do not think it necessary to imply a disciplinary procedure where none exists.  Where there is reference to a disciplinary procedure, which does not exist we do not think it necessary in this case to imply one.  We feel to do so in this particular context would mean that a person who did not have a statutory right to complain about an unfair dismissal, would in fact have a contractual right.  We do not think that such general duty exists, and consider it is not for a Tribunal sitting at this level to either extend the law of mutual trust and confidence to that extent or to imply a term.  We do not believe such a term can be implied on the basis that there is an incomplete contract”.  

9	Mr White who has put his argument today before us with admirable brevity and clarity contends essentially that the law implies in every contract an implied term of mutual trust and respect.  That proposition in itself in uncontroversial and indeed flows from the decision of the House of Lords in Malik -v- Bank of Credit and Commerce International [1997] ICR 606.  

10	He goes on, however, to submit that that duty of mutual trust and confidence implies, in a case such as the present, a contractual right to a disciplinary process; in other words, in this particular case, the Applicant should not have been dismissed without some kind of grievance procedure being followed.  He concedes that there is no authority directly in point, and no particular passage in the Malik case which bears on this particular issue, but nonetheless, in his Skeleton Argument he has invoked the general trend of employment law “these days”, as it is put, and submits that in the light of the general development of the law in this area, it is now, and we quote from the Skeleton Argument:
“it is highly arguable that a proper and effective disciplinary process is now an essential part of the employment relationship so as to satisfy the duty of mutual trust and respect”.  

11	He goes on to submit that had such a procedure been followed in the present case, or had there been some kind of machinery for dealing with grievances of various sorts, the employers in this case would, among other possibilities, have needed to bring the problem, which apparently was a personality problem in this case, to the attention of the employee to see whether matters could be resolved, they would have to have considered moving the employee to another position, or taken steps to achieve a reconciliation of the various difficulties.  If all that had been done, so the argument runs, it is not to be excluded that the Applicant would have remained in employment until the two year period had been completed and that, therefore, not following those procedures has resulted in the loss to her of the chance of her damages being assessed on the basis that she had lost a right to be unfairly dismissed.  

12	We have come to the conclusion that the law does not recognise an implied term of the breadth that is contended for by Mr White in this case.  It is true, of course, that it results from the Malik judgment that there is to be implied in every contract of employment a duty of mutual trust and confidence, but the Malik case was not, in itself, dealing with a situation of dismissal and there is no authority, that we know of, that would imply a contractual right on behalf of the employee that an employer would always act fairly in connection with terminating the contract.  Such authority as there is, in our view, is somewhat against that proposition, and in that case we refer to the Decision of the Court of Appeal in Johnson -v- Unisys [1999] ICR 813 in which the Master of the Rolls, Lord Woolf, as then was, re-affirmed the long-standing decision by the House of Lords in Addis -v- The Gramophone Company Ltd [1909] Appeal Cases 448 to the effect that the manner of dismissal does not give rise, under English law, to a claim for damages.

13	The submission made to us would have the effect of cutting down the employer’s contractual right to determine a contract in accordance with its terms, and impose in every contract, by way of an implied term, a supplemental general duty to be fair, when terminating a contract on notice, in accordance with its terms.  That proposition would represent, in our judgment, a considerable revolution in the law of contracts of employment under English law.  In our judgment, if such a development is to come, it is one that is properly done by Parliament and not by the Courts.  The structure of the law of unfair dismissal and related employment rights, which has largely come into being by way of primary legislation, has been the result of the fact that those rights do not exist at common law.  As the Employment Tribunal rightly said in paragraph 19 of its judgment, to imply such a term in the present context would mean that a person who did not have a statutory right to complain about an unfair dismissal would, in fact, have a contractual right.  In our view, if the right to fair treatment in short term contracts is to be introduced, that should only be done by way of legislation.  

14	We therefore are unable to detect an error of law in the findings of the Tribunal.  They say, in particular at paragraph 9, that they are not making any express findings as to why the Respondents dismissed the Applicant and they observe at paragraph 10 that in exercising the contract jurisdiction of the Tribunal, they are not concerned with concepts of fairness.  But the heart of the judgment is at paragraph 12 where the Tribunal says that:
“it would be pushing at the bounds of that duty too far to say that a dismissal simply by itself is capable of amounting to a breach of the duty “

And then they go on to say that:
“the act of dismissal in our view does not amount to the duty of mutual trust and confidence”
We agree with those observations and we do not think in the present state of the law, the contrary is arguable.  

15	As to whether, on the particular facts of the case, a term to the effect we have been discussing should be implied, we agree with the Tribunal at paragraph 15 that, for the reasons which we have already given, it is not possible to imply a contractual duty, that the employer would always act fairly or reasonably, or according to some other canon of conduct, when exercising his contractual right to terminate a contract.  

16	As far as the question of the reference in the contract to “Disciplinary Rules”, which did not in fact exist, is concerned, we agree with the reasoning of the Tribunal at paragraph 19 that an implied term to imply a disciplinary procedure should not be implied unless it is necessary to do so.  The Tribunal observes in paragraph 19 that it is not necessary to imply such a term in this case, on the basis of the facts that they have found, and we can detect no error of law in the Tribunal’s approach to that aspect of the problem.  It results from the foregoing that we consider that there is no arguable error of law in the Decision of the Tribunal in this case, and consequently the appeal is dismissed.  

[The Applicant then applied for permission to appeal]

Our view, Mr White, is the propositions that you have been putting forward, however attractive and reasonable they may seem, are so far away from the state of the law as we have been able to determine it, that it would not be right for us to give you leave to appeal, and you should therefore go to the Court of Appeal, if so advised.