Appeal No.	 EAT/188/00

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 26 May 2000

Before
HIS HONOUR JUDGE PETER CLARK
MISS A MACKIE OBE
MR H SINGH

MR H DONALD	APPELLANT

M & W PEARCE LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellant	MR JAMES LADDIE
(of Counsel)
Appearing under the
Employment Law Appeal
Advice Scheme	

	JUDGE PETER CLARK:	

1	This appeal raises two points.

2	The appellant, Mr Donald, commenced employment with the respondent on 1 December 1997, following a period of engagement with the company as a sub-contractor, under a contract of employment which provided that he be employed at Dresden, Germany, but that he may also be required to work at any other of the organisation’s establishments.  He was to be paid £29,600 per annum plus 25 per cent uplift whilst in Germany, the total annual salary of £37,000 being payable monthly in arrears by credit transfer to his bank (we assume in this country).

3	By an Originating Application presented to the Bristol Employment Tribunal on 15 February 1999 he complained, among other things, first that he had been unfairly dismissed, second that he had been wrongfully dismissed without notice or pay in lieu and thirdly that the company was in breach of contract in not paying Social Security contributions on his behalf to the German authorities.  There were other claims with which we are not concerned arising out of his employment and its termination.

4	As to the claim of unfair dismissal an Employment Tribunal chaired by Mr A.C. Tickle, sitting on 19 April 1999, found that the applicant did not ordinarily work outside Great Britain and thus there was no jurisdictional bar to the claim under what was section 196 of the Employment Rights Act 1996.  The unfair dismissal claim was stayed pending the decision of the House of Lords in Seymour Smith.  We are concerned with the two further claims mentioned above.

Wrongful Dismissal

5	In Germany, the appellant was employed on a project undertaken by the respondent in conjunction with a German company, Meissner & Wurst (M & W).  The project manager was an employee of the Respondent, Des Pike.  Following a conversation between the appellant and Mr Pike on 30 September 1998, the details of which are not recorded in the tribunal’s reasons supporting the decision under appeal, on 1 October Mr Pike wrote to the appellant on M & W headed paper in these terms:

“Further to our recent discussions p/m 30-09-98 regarding the above mentioned, this is to confirm that your current employment on this project will cease with effect from Friday, 30th October 1998.
Whilst M & W Pearce will endeavour to find alternative employment within the company or one of the other operating companies controlled by the Pearce Group this unfortunately cannot be guaranteed.
We trust that you will continue to serve “the company” throughout your notice period as you have during the period of your current contract of employment.
We thank you on behalf of M & W Pearce Ltd for your efforts and commitment throughout your period on this project.”

The letter was headed “Notification of Leaving FAB 30 Dresden”.

6	No alternative employment was found for the appellant and he ceased work on 30 October 1998.

7	It was the appellant’s case that that letter, written on M & W paper telling him that his employment on the Dresden project was finishing on 30 October 1998, could not properly be regarded as notice of termination of his employment with the respondent under the terms of his contract, which provided for four weeks’ notice.  He therefore claimed four weeks’ pay in lieu of notice.

8	That contention was rejected by an Employment Tribunal sitting at Bristol on 10 May 1999, under the chairmanship of Mr D.M.W Simpson, in a decision with extended reasons promulgated on 12 July 1999 (the original decision).  The tribunal found that the letter gave proper notice of termination of the contract of employment through the respondent’s agent, M & W.

9	At a subsequent review hearing before the same tribunal held on 10 November 1999 the tribunal varied that part of the original decision to the extent that they found that the letter of 1 October 1998 was not given by M & W as agent for the respondent, but by the respondent, albeit using M & W stationery.  Accordingly they affirmed their earlier decision that the appellant was not entitled to pay in lieu, but on different reasoning.

10	As to this finding Mr Laddie has taken us to the letter of 1 October and also to subsequent letters written by the appellant to the respondent on 19 and 28 October, from which, Mr Laddie submits, it is clear that the appellant was under the impression that the letter of 1 October merely terminated his employment on the Dresden project.  It did not terminate his employment with the company.

11	We bear in mind the need for unambiguous notice of termination of employment to be given to an employee.  In these circumstances we think it arguable that the tribunal erred in concluding that the letter plainly amounted to notice of termination of the employment, rather than employment on the Dresden project.  In these circumstances we shall allow this point to proceed to a full appeal hearing.

Social Security Contributions

12	This part of the appellant’s claim was adjourned at the first tribunal hearing on 10 May 1999 and was considered for the first time at the review hearing held on 10 November 1999.  In connection with this part of the case the tribunal made a number of findings of fact which appear at paragraph 14 of the review decision.  Based on those findings of fact they reached a conclusion at paragraph 15, which is the subject of the second part of this appeal.

13	The Employment Tribunal found that no such contractual obligation arose because the applicant elected to treat himself as a UK employee, by being paid in sterling in the United Kingdom, and made an election which gave him the benefit of the jurisdiction of the Employment Tribunal for the purposes of his unfair dismissal claim.  It seems to us arguable that neither of those reasons is material.  The question is, what was the contractual obligation?  

14	This is an ex parte preliminary hearing and we have heard only from Mr Laddie on behalf of the appellant.  However, it seems to us arguable that, from a proper reading of clause 17 of the contract of employment, which is contained in a letter to the appellant from the respondent dated 9 May 1997, that the respondent undertook to pay Social Security contributions on behalf of the appellant to the German authorities.

15	In these circumstances we shall allow the second point also to proceed to a full appeal hearing.  For the purpose of that hearing we direct that the case be listed for half a day, Category C.  There will be exchange of skeleton arguments between the parties not less than 14 days before the date fixed for the full appeal hearing.  Copies of those skeleton arguments to be lodged at the same time at this tribunal.

16	We have considered and reject Mr Laddie’s application for Chairman’s Notes of Evidence.  At this stage it does not appear to us to be necessary.  Any further application for Chairman’s notes by either party should be made in writing and directed for my attention.