Appeal No. EAT/190/01

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 6 December 2001

Before
HIS HONOUR JUDGE PETER CLARK
MR D LAMBERT
MISS D WHITTINGHAM

ENESCO EUROPEAN GIFTWARE GROUP LTD	APPELLANTS

MRS K P BIRKETT	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MISS SARA MOOR
(of Counsel)
Instructed By:
Mr K Strycharczyk
Messrs Burnetts 
Solicitors
6 Victoria Place
Carlisle CA1 1ES	

For the Respondent	
MR SEAMUS SWEENEY
(of Counsel)
Instructed By:
Messrs Paisleys
Solicitors
31 Jane Street
Workington CA14 3BN	

JUDGE PETER CLARK:

1.	The preliminary issue in this case which came before an Employment Tribunal sitting at Carlisle on 29 November 2000 under the Chairmanship of Mr Peter Hildebrand, was, what was the effective date of termination of the applicant, Mrs Birkett’s contract of employment with the respondent, Enesco European Giftware Group Ltd?  By a decision promulgated with Extended Reasons on 22 December 2000 the Tribunal held that she was dismissed on 11 weeks’ notice, given on 3 March 2000 and expiring on 19 May 2000.  Accordingly, her originating application presented to the Tribunal on 12 June 2000 was within the ordinary three-month time limit for her complaint of unfair dismissal.  In so finding, the Tribunal rejected the respondents’ case that the applicant was summarily dismissed with effect from 3 March 2000 with 11 weeks’ pay in lieu of notice.  Against that decision the respondent below now appeals.

2.	No oral evidence was called by or on behalf of the applicant below.  The Tribunal heard evidence from Mrs Carol Edmonson, the respondents’ Personnel Officer and the Human Resources Manager, Mr Johns.  They found the facts to be as follows.  The applicant commenced employment with the respondent on 13 March 1989.  The letter of dismissal by the respondent was dated 3 March 2000 and was received by the applicant, through the post, either the following day or on Monday 6 March.  That letter read:-

“Dear Karen

With regard to the home visit carried out on 9th February 2000, when we discussed your current situation.  We agreed with yourself that as all of the alterations to the Workington site have now been completed some weeks ago, if you did not return to work on Wednesday 1st March 2000, we would in accordance with the Company’s Long Term Sickness Policy, terminate your employment with ourselves with effect as of Friday 3rd March 2000.

As your employment commenced on 13th March 1989 you will be given eleven week’s pay in lieu of notice.  This means that you will not be required to work out your notice period.  Therefore, your last day of employment with the company will be Friday 3rd March 2000.

As discussed, you will be paid for any unused holidays along with your final payment.  Your P45 and payslip will be sent to you shortly.

We take this opportunity to thank you for the eleven years that you have worked at Lilliput Lane and wish you well in the future.”

3.	The Tribunal do not set out the events leading up to the dismissal.  It seems from the applicant’s originating application that she had been off sick following a health and safety issue arising over her perception that the use of a new chemical in the plant had triggered her asthmatic condition.  The Tribunal record that there were telephone calls from the applicant and further correspondence from the respondents dated 7 March and 9 March 2000.  The letter of 7 March from Mrs Edmondson followed a telephone conversation between the writer and the applicant on Monday 6 March.  It reads:-

“Dear Karen

Following our telephone conversation on Monday 6th March regarding our letter sent to you on Friday 3rd March.  As promised, I am writing to confirm the details of the termination of your employment with the Company and confirm that this was due to you not being capable to attend for work at the Workington site due to your ill-health, as you are suffering from asthma.  As you were not able to return to your position as in-house Model Painter at the site on the date which we mutually agreed as Wednesday 1st March, we therefore in accordance with the Company’s Long Term Sickness Policy terminated your employment from Friday 3rd March.  Also as discussed I have enclosed the Long Term Sickness Policy for your reference.

Also, during our conversation on Monday we agreed that written references will be provided for you, if required, or alternatively a prospective employer can contact us by telephone and we could give a verbal reference.

I hope this has cleared up any doubts you had and please feel free to contact me if you require the references.  Good luck in finding a new position and the forthcoming birth of your dog’s pups.”

4.	The applicant was paid her full notice money, less tax, before her P45 was sent to her giving her date of leaving the respondent as 3 March 2000.

5.	In box 4 of her originating application prepared by solicitors who signed it on her behalf, her dates of employment were given as being from 13.03.1989 to 3.03.2000 and then these words were added “plus 11 weeks pay in lieu of notice”.  It was not argued below that if the effective date of termination (EDT) was more than three months prior to the date of presentation of the originating application of 12 June 2000, the escape clause provided for in section 111(2)(b) of the Employment Rights Act 1996 (“ERA”), the reasonable practicability provision, could apply in this case.  Hence the question of law for the Tribunal was the proper application of section 97(1) ERA to the facts of the case.  Section 97(1) provides, far as is material:-

“(1) 	Subject to the following provisions of this section, in this Part “the effective date of termination” –
(a)	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,
(b)	in relation to an employee whose contract of employment is terminated without notice, means the date on which the termination takes effect.”

6.	The cases show that dismissals with pay in lieu of notice fall into two possible categories.  Those under section 97(1)(a) where the employee is dismissed on notice but is not required to work his notice and receives payment in lieu, see for example, J R Lees v Arthur Greaves (Lees) Ltd [1974] ICR 501 CA and Adams v GKN Sankey Ltd [1980] IRLR 416 EAT, Mr Justice Slynn presiding.  In such cases the EDT will be the date on which that notice expires.  The second category, falling under section 97(1)(b) is where the employment is summarily terminated by the employer without notice but with pay in lieu of notice by way of liquidated damages for wrongful dismissal at common law.  See for example British Building and Engineering Appliances Ltd v Dedman [1974] ICR 53 CA, Robert Cort & Son Ltd v Charman [1981] IRLR 437 EAT, Mr Justice Browne-Wilkinson presiding.

7.	In deciding into which category the case falls on its facts, the Employment Tribunal should construe an ambiguous letter of dismissal in favour of the employee who receives it.  The question, is what would an ordinary reasonable employee understand by the words used in the letter?  The construction of the words used must be reached in the light of the facts known to the employee when he or she received the dismissal letter, Chapman v Letherby & Christopher Ltd [1981] IRLR 440.

8.	In seeking to apply those principles to the facts of this case, the Tribunal appear instead to have been dazzled by certain obiter remarks made by Mr Justice Slynn in Adams v Sankey.  At paragraph 12 of the report he said:-

“We very much hope that in letters of this kind it will be made clear – much clearer than in the present case – that what is being done is to give notice, with a payment to cover the period of notice, the employment to continue meanwhile, or whether what is being done is to determine the employment immediately with a sum being paid which is really, as has been said in the cases, compensation for dismissal, or, as Sir John Donaldson put it in Dixon v Stenor Ltd, is in effect being paid as damages for breach of contract.  The two positions are quite plain, can be covered by clear language, and, if appropriate language is used, this kind of dispute which arises from time to time can be avoided.”

9.	That passage, following the EAT determination in the appeal, is faithfully reproduced in the IRLR headnote.  The Tribunal here went on to observe that the facts in Adams were these.  The dismissal letter dated 2 November 1979 read:-

“… you are given 12 weeks’ notice of dismissal from this company with effect from 5.11.79.  You will not be expected to work out your notice but will receive money in lieu of notice …”

On that wording, Mr Justice Slynn’s Tribunal overturned the decision of the Industrial Tribunal that the EDT was 5 November and found that the termination took effect on the expiry of the 12 week notice period.

10.	This Tribunal, sitting at Carlisle, could see no real distinction between the present case and that of Adams and thus held that this was a dismissal on notice, the EDT being the expiry of the 11 weeks’ notice, that is 19 May 2000.  Mrs Birkett’s claim of unfair dismissal was presented on time.

11.	We think it dangerous for Tribunals to base their decision on obiter remarks from however distinguished a source, as in Adams, and then to seek to answer the statutory question, was this a dismissal with or without notice for the purposes of section 97(1) ERA, by making a comparison between the different wording of two dismissal letters in different cases.  The correct approach, in our judgment, as is accepted by both counsel before us, is to ask the question posed in Charman, what would the ordinary reasonable employee have understood by the words used in this dismissal letter bearing in mind the facts known to this applicant?  Had the question been posed in that way, there could, in our judgment, be only one answer.  The dismissal took effect when the applicant received the letter of 3 March 2000 informing her that her last day of employment with the company would be Friday 3 March 2000.  The wording is clear and unambiguous and arises against the background that at the home visit on 9 February 2000, the applicant had been informed that if she did not return to work on Wednesday 1 March the company would terminate her employment with effect as of Friday 3 March.  That is precisely what they did by their letter of that date which states in terms:-

“Therefore, your last day of employment with the company will be Friday 3rd March 2000.”

12.	Since notice of dismissal does not take effect or begin to take effect until it is communicated to the employee, that would have been on the Tribunal’s findings, at the latest, on Monday 6 March.  Further, on that day, the applicant spoke to Mrs Edmondson by telephone.  The effect of that conversation is contained in Mrs Edmondson’s letter of 7 March including confirmation, if any were needed, that: “we therefore in accordance with the Company’s Long Term Sickness Policy terminated your employment from Friday 3rd March.”  This, in our view, is a classic example of summary termination with pay in lieu of notice, not termination on notice without a requirement for the employee to attend for work.

13.	We have said that the test is objective.  What would the ordinary reasonable employee understand by the words of the dismissal letter.  However, it is now material to note (a) the applicant herself then advised by solicitors gave the EDT of her contract as 3.03.2000 in her form ET1 and did not give evidence herself as to any different understanding which she may have had at the relevant time.  We have therefore concluded that the Tribunal here took a wrong approach in law leading to a manifestly wrong conclusion on the facts.  If it were necessary to return to the case of Adams we would point to these vital factual distinctions between that case and this.  (1) The letter in Adams begins “you are given 12 week’s notice of dismissal from this company with effect from 5.11.79”.  That is dismissal on notice under what is now section 97(1)(a) ERA.  In the present case no such notice was given.  The fact that pay in lieu of notice was given in both cases was nothing to the point.  (2) Unlike Adams, the correspondence in the present case showed that the employment was to terminate on 3 March, viz. “your last day of employment with the company will be Friday 3 March 2000, (letter of 3 March) we therefore terminated your employment from Friday 3 March.” (letter of 7 March).

14.	In reaching our clear conclusion in this case we have not overlooked the following points advanced by Mr Sweeney in support of the Tribunal’s decision, that notwithstanding his concession that the Tribunal fell into error by failing to ask the reasonable employee question, first, he draws attention to reference in the dismissal letter of 3 March, to the company’s Long Term Sickness Policy, Clause 5 of which is set out at paragraph 2(d) of the Tribunal’s reasons.  We do not consider that the reference to “the relevant period of notice” in that policy, overcomes what we regard as the clear and unambiguous meaning and effect of the dismissal letter as a whole, that the employment would end on 3 March or, more strictly, when the letter was brought to the attention of the employee on the Tribunal’s findings, at latest on 6 March.  Secondly, he submits that the letter of 7 March 2000 is irrelevant to the construction of the dismissal letter.  We would not go that far but our finding is that the dismissal letter is clear on its face without more but that if the letter of 7 March is a relevant piece of evidence it merely goes to support our construction of the dismissal letter itself.

15.	Both counsel, having agreed that the Tribunal here fell into error in its approach to construction for the purposes of section 97(1) ERA, have asked us not to remit the case for rehearing by another Tribunal but to determine ourselves the proper construction of the dismissal letter.

16.	For the reasons which we have given, we have no hesitation in concluding that this was a dismissal without notice but with pay in lieu of notice taking effect at latest on 6 March 2000.  It follows that the applicant’s originating application was presented out of time.  It is accepted that it was reasonably practicable to present it within time.  

17.	Accordingly we shall allow this appeal and dismiss the applicant’s complaint of unfair dismissal on the ground that it is time-barred.