Appeal No. UKEAT/0447/07/ZT

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 2 May 2008
	   Judgment handed down on 14 August 2008

Before
MR RECORDER LUBA QC
MS K BILGAN
MRS M McARTHUR BA FCIPD

(1)  MR A DARBY	APPELLANTS
(2)  MS B STILL

THE LAW SOCIETY OF ENGLAND AND WALES	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR J LADDIE
(of Counsel)
Instructed by:
Messrs AMC Law Solicitors
25 White Delves
Wellingborough
Northants
NN8 5XW	
For the Respondent	MR A SOLOMON
(of Counsel)
Instructed by:
Messrs Russell Cooke Solicitors
2 Putney Hill
Putney
London
SW15 6AB	

SUMMARY
UNFAIR DISMISSAL:  Dismissal/ambiguous resignation
Issue as to whether employees were “dismissed”.
The employer resolved to remove the employees’ contractual entitlement to company-cars. Attempts to achieve consensual variation of the contracts to that effect were followed by letters referring to termination of employment and re-engagement. The employees then signed new terms without the previous company-car provisions. 
On the issue of whether there had been any “dismissals”, an Employment Tribunal found that the new terms had been achieved by agreement to vary rather than termination.
On appeal, the Employment Appeal Tribunal was satisfied that the only proper construction of the letters was that the employees had been dismissed by notice in writing and then re-engaged on less favourable terms.
.

MR RECORDER LUBA QC

Introduction
1.	The Appellants are two senior employees of the Respondent (the Law Society).  They appeal against the rejection by the Employment Tribunal at Birmingham of their claims that in the spring of 2006 they had been unfairly dismissed by the Society.  The Employment Tribunal decided that the two Appellants had not been dismissed at all so that no issue of the fairness or otherwise of their dismissal arose for determination.  

2.	By this appeal it is said that the Employment Tribunal erred in law in concluding that the Appellants had not, as they had contended, been dismissed by notice given in writing. 

Background facts
3.	The Appellant Mr Darby became an employee of the Society in 1988.  The Appellant Ms Still was employed from 1990.  The two Appellants were engaged at a senior level and each of them had the benefit of the provision of a leased car supplied by the Society.  The Employment Tribunal found, and it is no longer in dispute, that each employee had a contractual entitlement to the provision of a leased car as part of their remuneration package.  In October 2005 each of the Appellants was separately told that, following an equal pay audit, the Society had decided that the provision to them of leased cars was anomalous and that the provision of such cars would be withdrawn.  It seems that similar letters were sent to other senior employees who also had the benefit of leased cars.

4.	There then followed, over the course of the next several months, exchanges of correspondence, meetings and the pursuit of a grievance procedure.  It is not at this stage necessary to import into this judgment the helpful and very detailed account given by the Employment Tribunal of each of those matters.

5.	For present purposes it is sufficient to record that on 10 May 2006 the Appellants each signed up to new terms and conditions of employment which did not include a contractual term for the indefinite provision of a leased car. Under the new terms, car provision would not continue beyond the end of 2008.

The case before the Employment Tribunal
6.	The Appellants’ case before the Employment Tribunal had been that they enjoyed the benefit of their leased cars as a matter of contractual entitlement as part of their remuneration packages.  They acknowledged that their employers, the Society, had sought to encourage them to agree to variations of those terms so that under new terms and conditions of employment they would not have the benefit of the leased cars.  They had rejected those overtures.  In those circumstances, they said, the Society had decided to dismiss them and offer re-engagement only on terms and conditions that did not include the leased cars.  Their case was that they had reluctantly accepted re-engagement on those new terms and conditions of employment following such dismissals.  

7.	The case for the Respondent before the Employment Tribunal had been that they had indeed sought to encourage the relevant employees to relinquish their right to the benefit of leased cars.  When their co-operation had not immediately been forthcoming the Society had decided to raise the prospect of dismissal if such variation be not agreed.  In the event, the Society said, dismissal had never become necessary because the employees had accepted variation of their terms and conditions onto new terms which had commenced in May 2006.  In those circumstances, said the Society, there had been no dismissals.

8.	The question of whether there had or had not been dismissals was therefore a central (but not the sole) issue before the Employment Tribunal.  

The Employment Tribunal’s decision
9.	The findings of fact made by the Employment Tribunal are clearly and helpfully set out in paragraph 10 of their Decision.  After setting out the history of the Appellants’ employment by the Society, the findings of fact focus on the situation towards the latter part of 2005 and the early part of 2006. 

10.	The Tribunal records the understanding of the parties as to the position in the autumn of 2005 in these terms (paragraph 10.25 of the Decision):
“The respondent’s witnesses confirmed that their understanding of the position generally was that if the respondent could not persuade staff to agree to variations to their contracts to remove any anomalies (including the company car benefit provided to the claimants), the way to achieve the desired result of removing the anomaly concerned was to dismiss those staff on notice and re-engage them on new terms and conditions of employment.”

11.	In the same paragraph the Tribunal conclude:
“It was common ground that the understanding of all involved, was that the above process was the legally correct approach to follow in order to remove the company car benefit.”

12.	The Tribunal are there, in our judgment, accurately reflecting the dealings between the parties and the circumstances in which correspondence was exchanged in the latter part of 2005.  The stark options were either (1) a variation of the existing terms and conditions by consent or (2) a dismissal followed by the prospect of re-engagement on new terms excluding the indefinite provision of a car.  

13.	The crucial question, accordingly, for the Employment Tribunal was as to which of those scenarios had been pursued through to a conclusion in May 2006 when the present Appellants signed up to new terms and conditions of employment.

14.	Having reviewed what transpired in the early months of 2006, and in particular having considered the correspondence passing from the Society to the present Appellants, the Tribunal concluded that there had been no termination of employment and that the new terms and conditions (excluding the indefinite provision of a leased car) had been achieved by a process of variation rather than of termination and re-engagement.  

The relevant law
15.	The Tribunal correctly directed themselves to the relevant legal question i.e. whether the employees had been dismissed at all.  Only if the employees had been dismissed could they have established a claim for unfair dismissal.  In this context (the statutory right to complain of unfair dismissal) the term “dismissal” is given a statutory definition.  The Employment Rights Act 1996 at s95(1)(a) provides as follows:
“An employee is dismissed by his employer if and, subject to subsection (2)…, only if
(a) the contract under which he is employed is terminated by the employer whether with or without notice.”

In the instant case, the claim was that the contract of employment had been terminated by the employer with notice given in writing.  In those circumstances it is important to note the significant recent shift in emphasis by the appellate courts as to the correct construction and interpretation of unilaterally given notices.

16.	In Mannai Investment Co. Ltd v Eagle Star Life Assurance Co. Ltd [1997] A.C.749 the House of Lords, by a majority, settled on a new approach to the construction of unilateral notices.  The new approach can be sufficiently distilled from the head note which appears in these terms:
“The construction of the notices had to be approached objectively and the question was how a reasonable recipient would have understood them bearing in mind their context.”

That case was concerned with unilateral notices given in the context of a relationship of landlord and tenant but we see no reason why those principles should not apply to unilateral notices given in the context of an employer and employee relationship.  The contrary was not suggested to us.  

17.	In so far as the correct approach to the instant case is to analyse the content and legal nature of the contractual documents leading up to the agreement entered into between the Appellants and Respondent in May 2006, both parties drew our attention to the now often cited passage in the speech of Lord Hoffman in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896.  In particular both parties relied on Lord Hoffman’s five principles set out at pages 912H – 913G.  We have those principles, and the correct approach as set down in the Mannai case, firmly in mind.  

The correct approach to the issue
18.	Before us the parties appeared to take slightly different approaches as to whether or not the question of construction of the notices alleged to be notices of termination should be informed by the background context.  The Tribunal appear to have adopted the approach that the issue was to be resolved largely by looking at what was to be reasonably understood from the language used in the documents themselves.  

19.	For example, the Employment Tribunal say (at paragraph 6 of their Decision):  “The case largely turned on our interpretation of the documentary evidence.”  More directly (at paragraph 20 of their Decision) they say this:
“As regards the question of dismissal, we have analysed the correspondence between the parties very carefully, particularly the correspondence from the respondent.  We think that it was common ground between the representatives that the legal analysis of whether there was a dismissal or not would come down to our interpretation of that correspondence.”

20.	It is certainly true that later in the same paragraph (paragraph 20) the Tribunal used the following language:
“We were satisfied that from the correspondence, and from the negotiations between the parties …”

That language would suggest that in the construction of the relevant notices the Tribunal had regard to earlier negotiations.  Lord Hoffman in the ICS case specifically stated (at principle 3) that “the law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent”.  To that extent therefore the Tribunal must have erred in having regard to the antecedent negotiations in their exercise of construing the relevant documents.  Accordingly, in our judgment the Respondent before us was wrong to contend at paragraph 5 of its skeleton argument that:
“The Tribunal did not err in its interpretation of the negotiations between the parties in reaching its conclusion.”

21.	In the event, we do not consider that anything of substance turns on this issue.  It is quite plain from the terms of their written reasons, fairly read together, that the Tribunal were almost entirely determining the issue of whether the employees were dismissed by exclusive reference to the proper construction of the letters said to constitute notice of termination of employment.  In those circumstances it is entirely proper for us to be invited to consider the same documents and to determine whether as a matter of law the Tribunal were right to construe them, not as notices of termination of the current contract of employment but rather as documents which were intended to produce and did produce a consensual variation of the extant terms and conditions of employment.

The relevant documents
22.	It is not necessary for us to review the content of the documentation which passed between the parties in 2005 (or indeed any of the earlier documents).  That is because, as the Tribunal record, they accepted that the earlier correspondence used the “language of variation” (paragraph 20 of the Decision).  Neither party sought to gainsay that analysis.  The real issue in the appeal is whether the 2006 correspondence continued to reflect encouragement to the employees to agree to a consensual variation or alternatively constituted unilateral notice of termination. 

23.	In this regard, as the Tribunal rightly recognised, the most important document is the letter sent in identical terms to the two employees on 31 January 2006 (incorrectly referred to by the Tribunal at paragraph at 10.28 as 31 January 2007).  Given the emphasis that each party placed on the proper construction of this document it is important to set out its full content.  

“1	I am aware that there may have been some confusion with regard to the contents of my previous letters to you dated 20th October 2005 and 23rd December 2005 which set out the relevant findings of the Equal Pay Audit and the Society’s proposals on how to incorporate these recommendations into your terms of employment.  This letter aims to address any uncertainty and clearly set out the position concerning your future employment with the Society.

 2	I thought it may be useful to recap on the background to the current situation.  As we are all aware the Society has undertaken a comprehensive equal pay audit (EPA) in order to ensure that our pay and reward policies and procedures are fair and consistent and are not discriminatory.  The key findings of the equal pay audit report was that our reward policies and procedures are not discriminatory.  However, the report did highlight that some jobs appeared to be either over graded or undergraded.  In addition it also identified certain anomalies and inconsistencies.  Most of these were documented in the report and action plan.  All staff were advised of the outcomes of the EPA in October/November.

 3	In cases involving a variation to current terms and conditions of employment staff were served with formal notice of 90 days consultation and also notice of the termination of their existing contractual terms with the offer to agree to the new terms of employment incorporating the variation.  The Society was mindful that this was a difficult time for certain staff and in order to ensure that all staff were treated fairly and consistently and also to give staff sufficient opportunity to consider the information provided by the Society both the consultation and notice periods were extended to 16 March 2006.

4	Since commencing the consultation and notice periods there have been meetings with individual members of staff as well as numerous email exchanges and requests for information.  We have also discussed specific issues at the JCC meetings.

5	However it would appear that the process of ensuring any variation was not imposed unilaterally has led to confusion for some staff.  Given this confusion, the Society has decided that new notices of termination will be issued to relevant staff to expire on 30th April, with the offer of re-engagement commencing 1st May 2006 on the new terms incorporating the variation and with all other terms and conditions remaining unchanged.

6	The purpose of this letter is to give you notice of termination of your present terms of employment to expire on 30th April 2006, rather than on 16th March 2006, but that you will have the option to agree to re-engage on new contractual terms of employment commencing 1 May 2006 incorporating the withdrawal of your company car as it is not applicable to your job role/grade.  All other terms and conditions of employment will remain the same.

7	I would confirm that the Society has decided to offer you the option to continue to have the use of a lease car up to 31 December 2008 as an alternative to taking a car cash allowance on the expiry of your existing car lease if this occurs before 31 December 2008.  On expiry of the existing lease before 31 December 2008 you will have the option to extend the lease on the existing vehicle, enter into another short term lease on another vehicle (subject to available lease arrangements) or receive the cash allowance.  The availability of these options is subject to your signed acceptance of the new terms and conditions of employment incorporating the variation.  In all cases the car and car cash allowance will cease on 31 December 2008.

8	This notice of termination of your present terms and conditions and hence employment supersedes previous notice issued in letters dated 20th October 2005 and 23rd December 2005.

9	You will be issued with new terms and conditions of employment, ie existing terms and conditions but incorporating the variation, shortly.  You will then have the option to sign the new terms and conditions of employment.  If you agree to the new terms and conditions of employment you will be required to return the duplicate copy of this letter together with a copy of the new terms and conditions of your employment, duly signed, on or before midday on Friday 28th April 2008.  If the signed contract is not returned on or before midday on 28th April 2006, the present contract of employment will be terminated on 30th April.

10	I would remind you that although you are required to accept the new terms and conditions of employment on or before 28 April 2006 it has been agreed that most of the outcomes of the EPA will not be implemented until 1 January 2009.

11	I trust that any confusion has now been clarified. I do hope that you will accept the new terms and conditions of employment and I look forward to your continuing contribution to the success of the Law Society.”

We have taken the liberty of adding paragraph numbers to that letter in order to make sense of the various submissions we have received.  The letter had attached to it a tear off slip with the following wording:

“I agree to the terms and conditions of employment commencing on 1 May 2006 and incorporating the variation above with all other terms and conditions of employment remaining unchanged.

Signed:_________________________________          Date ______________________”

24.	While this letter is said to be the central letter on the issue of whether or not the Appellants were dismissed it is right to indicate that there was subsequent correspondence some of which we consider forms part of the relevant factual context.  On 21 February 2006, in the context of a grievance that Mr Darby had raised, the Society’s Human Resources Business Support Adviser Miss Gemma Lockwood wrote:
“A further letter was issued on 31st January 2006 which stated the purpose of this letter was to give notice of termination of your present terms of employment to expire on 30 April 2006 rather than 16 March 2006.  This was issued with 90 Days notice.  Further, the Law Society does not propose to remove the car benefit at the end of the consultation period.  It will be removed in three years’ time, 31 December 2008.”  

Following that letter the Society wrote again on 1 March 2006 in the following terms:
“1.	Further to the letter of the 31 January 2006 which provided you with notice of termination of your present terms and conditions of employment with effect from 30 April 2006 please find enclosed the new terms and conditions of employment.  If accepted by you these new terms and conditions of employment will apply with effect from 1 May 2006.

2.	You have been advised of the options available to you in respect of the availability of your company car until 31 December 2008.  If you have not already done so you will need to advise your HR Business Partner, Linda Turner, of your preferred option.

3.	Given that you are progressing this matter through the grievance procedure this satisfies your statutory right of appeal against the decision to terminate your existing terms and conditions of employment.  However, should you wish to meet to discuss the contents of this letter please notify Linda Turner within 7 working days of the date of this letter.

4.	If you agree to the new terms and conditions of employment you will be required to return the duplicate copy of this letter, together with a copy of the new terms and conditions of your employment, duly signed, on or before midday on Friday 28th April 2006.  If the signed contract is not returned on or before midday on 28th April 2006, the present contract of employment will be terminated on 30th April 2006.  The Society would advise that it will only accept signed copies with no amendments, conditions or comments attached, including reservation of legal rights.

5.	On behalf of the Society, I would hope that you find this offer of re-engagement acceptable and that you will continue to work with the Society as we move forward with new and exciting opportunities.”

25.	By letter dated 27 April 2006 the Society notified the Appellants that it had been decided to “extend the date for signed agreement until midday on 10 May 2006”.

26.	The contentions of the two parties as to the proper construction of the correspondence, and in particular the letter of January 2006, could not be more starkly different.  For the Appellants it was submitted that the letter constituted a termination or rather notice of termination of their existing contract of employment.  The function of the letter was in part to identify a deadline.  If the new terms and conditions were signed before the deadline then the consequence would be that on the day after termination of the existing contract the employees would be offered a new contract.  In the alternative, if the employees did not sign by the deadline then the effect would be that their contracts of employment would be terminated with no re-employment or re‑engagement.

27.	For the Society the contended construction of the documents was that if the employees were to sign by the deadline then no termination would ever take place and the contracts would have been varied so as to allow the Appellants the continued use of their cars until 31 December 2008.  If the employees did not sign the new terms and conditions by the deadline then their employment would indeed be terminated but they would be offered re-engagement on new terms and conditions entirely excluding the provision of the leased cars.

28.	Precisely the same submissions on the correct construction of the documents were made to the Employment Tribunal.  Their conclusions are crisply stated in the following extract from paragraph 20 of their Decision:
“…We thought that it was apparent from the later correspondence that the respondent had not moved from the position where it was seeking an agreed variation to a position where it intended to dismiss the claimants and re-engage them in any event.  We concluded that it was apparent that the respondent had put two options on the table:  the first was that the contracts could be varied by agreement in which case there would be no termination;  the second, which would incur in the event that the claimants did not agree to the variation, was that they would be dismissed on notice with an offer of re-engagement.  We did not accept that either claimant at any point thought that if they failed to sign the varied terms and conditions of employment by midday on 10 May 2006 they would have no job at all.  We think that they knew quite well that they would be offered re-engagement.  It was unfortunate that the later letters referred overall to the offer as being an offer of “re-engagement” when it was plain that that in fact re‑engagement was only being offered in the event that variation could not be achieved by agreement.  We were satisfied from the correspondence, and from the negotiations between the parties, the claimants would both have been well aware that if they were to sign the new terms and conditions their employment would not come to an end.  We did not think that the fact that the respondents had made reference to the varied terms and conditions of employment as being “new” terms and conditions of employment meant that re‑engagement was being proposed whichever option the claimants chose.  It was apparent that re‑engagement was the fallback position in the event that variation was not agreed.  It seemed to us that perhaps the reason that the claimants’ representative had some difficulty identifying the point when the claimants’ employment was supposed to have terminated, was because in the event that the claimants signed the contract prior to the midday deadline, as in fact they did, in reality there was no termination.”

The scope of the present appeal
29.	Before us, Mr Laddie put his primary case on the basis that the correct construction of the relevant 2006 correspondence was that it gave notice of termination of the present contract to the employees i.e. constituted notice of dismissal.  He challenged the approach taken by the Employment Tribunal in the passage just extracted from paragraph 20.  In particular he submitted that the Tribunal had been wrong, when construing the document, to consider such matters as the Respondent’s intention or the Appellants’ understanding of the relevant documents.  He submitted that the construction of the letters, most particularly the letter of January 2006, was a matter of law i.e. it required a proper determination of the question what a reasonable recipient of the letter would understand it to have conveyed.  We, having considered the helpful rejoinders to those submissions from Mr Solomon, are quite satisfied that they have merit.  The correct approach in our judgment is to consider whether on a reasonable construction of the documents - and in particular the letter of January 2006 - they constitute notice of termination of the current contract of employment with the prospect of re-engagement or whether, as contended for the employer, they constitute an invitation to agree a consensual variation with a threat of dismissal if such consensual variation be not achieved.

30.	Hesitant as this Employment Appeal Tribunal always is to depart from the clearly reasoned Decision of an employment tribunal, it is in our unanimous judgment clear that the correct interpretation of the letter of 31 January 2006 is that it constitutes notice of termination of the current contract of employment.

31.	Having carefully reviewed the submissions made by both parties, we consider that there are plain indicia that this is the correct construct of the letter of 31 January 2006.

32.	First, the tone and content of the January 2006 letter marks a break from the tone and content of the 2005 correspondence.  It was setting out a new or different approach.  The earlier approach, as we have indicated above, and as the Tribunal found, was one of seeking to achieve a consensual variation.  Paragraph 5 of the letter of 31 January 2006 makes it plain that the previous position of the Society had led to “confusion” and that in the light of that “confusion” the Society had made a positive decision:  “that new notices of termination will be issued to relevant staff”.

33.	Second, the letter of 31 January 2006 was itself to constitute the implementation by the Society of that decision.  As paragraph 6 explicitly states “the purpose of this letter is to give you notice of termination of your present terms of employment”.  

34.	Third, the letter speaks of “re‑engagement”.  We accept Mr Laddie’s submission that the use of that term necessarily imports an earlier dis-engagement between the relevant contracting parties.  There cannot be re‑engagement unless the previous engagement has ended.  The plain use of the word re‑engagement in the letter of 31 January 2006 (and subsequent correspondence) can only be understood consistently with termination by notice of the present employment.

35.	Fourth, paragraph 8 of the letter of 31 January 2006 explicitly states that “this notice of termination of your present terms and conditions and hence employment supersedes previous notice issued” (our emphasis added).

36.	Fifth, the unilateral nature of the position taken by the Society as to what would happen once the employment had terminated is emphasised by the wording of paragraph 9 “you will be issued with new terms and conditions of employment … shortly”.

37.	We do not overlook the references in the letter, which it is accepted on all sides appears to have been poorly drafted, to variation.  Mr Solomon understandably places emphasis on the terms of paragraph 9.  Indeed, most emphasis is placed on the following sentence “If the signed contract is not returned on or before midday on 28 April 2006 the present contract of employment will be terminated on 30 April”.  That, he says, by the use of the word “if” is intended to make it clear that the employees were being given an option i.e. accept a variation or have the variation imposed by way of termination and re‑engagement.  In our judgment that paragraph simply reflects muddled thinking.  The previous approach of the employers had been to seek to achieve consensual variation of the contract.  The plainest possible understanding of the letter of 31 January 2006 is that the Society were, to use colloquial terms, “upping the stakes” in deciding to give notice of dismissal.  The consequence of that would be that if the employees wished to remain thereafter in employment with the Society they would have to take the new terms and conditions and that if they did not do so before the expiry of the deadline the dismissal would take effect without re‑engagement on those terms.  

38.	In coming to their contrary conclusion, the Employment Tribunal were clearly influenced by two particular factors.  First, they considered that the use of the term re‑engagement was an explicable mistake.  We find that extremely surprising in the context of letters being written to very senior staff of the employer and generated from its most senior management through the prism of the Human Resources department.  In that context, it is highly unlikely that terms such as ‘re‑engage’ or ‘re‑engagement’ would be used loosely.  The Employment Tribunal address this at paragraph 10.33 of their written reasons when they conclude that the term re‑engagement had been used “incorrectly” and that it was “unfortunate” that the word had been used.  As to the later repetition of the use of that term in further correspondence, the Tribunal’s conclusion (at paragraph 10.35) was that once again the term was “not being used correctly”.  It was suggested that the intended use of the terms ‘re‑engage’ and ‘re‑engagement’ was to be deduced from the use of other wording in this most unfortunately worded correspondence.  With the greatest of respect to the Employment Tribunal, we cannot agree.  In the context of dealings between employer and employee ‘re‑engage’ and ‘re‑engagement’ have a readily understood meaning.  That is to say they describe the process of offering to keep on an employee once their previous terms and conditions have been terminated.  In our judgment, the only proper construction of documents using that terminology is that they are intended to reflect the termination of the existing contract.  

39.	The Tribunal’s second factor relates to what the employees were offered.  The Tribunal’s construction of the relevant correspondence as offering “two options on the table” was underpinned by their assessment that the employees were being offered a particular advantage or inducement if they accepted the first option i.e. a variation of their existing contracts without termination.  In our judgment, the Tribunal very sadly misunderstood the relevant context.  Having been taken through the documents by Mr Laddie we are quite satisfied that his submission is correct to the effect that there was no difference between the nature of the bargain available in terms of new terms and conditions of employment whether that bargain is seen through the prism of variation or of re‑engagement.  Under both alternatives the employees would receive the same thing that is to say the benefit of the continued use of their lease cars (or suitable adjustment if the leases expired) until the end of 2008.  Indeed, Mr Solomon for the Society did not seek to suggest that there were two sets of terms and conditions available i.e. one set of more advantageous terms to be offered and accepted if achieved by way of consensual variation and a second or inferior set of terms and conditions to be available if offered post-termination.  The explanation for that omission was very candidly put by Mr Solomon on the basis that the Society expected that the stark threat of looming termination of employment would cause the employees to accept a consensual variation and that in those circumstances it had not been necessary to draw up the “inferior” package that might be available on re‑engagement.  Although we understand fully the proposition that the Society never expected to lose the services of these individuals it is plain that whether what was to be achieved was achieved by way of consensual variation or by dismissal and re‑engagement was to be exactly the same thing i.e. that the employees would continue to enjoy the benefits associated with their leased cars until at least the end of December 2008.  In those circumstances we have no hesitation in holding that the Tribunal were wrong to believe that there was some difference in the remuneration package to be available depending upon whether it was achieved by variation or by termination and re‑engagement. 

40.	Mr Solomon deployed, in general answer to the thrust of the submissions made by Mr Laddie, the proposition that there could not have been a termination in the instant cases because the employees were unable to identify a specific moment in time at which their prior contracts of employment had determined and had been replaced by the new contracts of employment which they had signed on 10 May 2006.  Mr Solomon pointed with some justification to the rather fluid approach to that matter taken by Mr Laddie both before us and before the Employment Tribunal.  In our judgment this issue does not assist.  Nor does the associated question raised by Mr Solomon as to whether it is possible as a matter of law for the employer to extend unilaterally a notice of termination of employment from a particular date to a later date.  It seems to us that it is perfectly possible, dealing with the latter point, for an employer - having given notice - to be prevailed upon by the employee to extend the notice somewhat.  That is what occurred here i.e. the mutual agreement to extend for a short period the notice of termination.  As to the point of termination, the only significance in law is to identify the date of termination of a contract of employment.  We have no difficulty in finding that the contracts of employment in this case terminated on 10 May 2006 and were on the same day replaced by new terms and conditions of employment in the terms signed by the employees.

Conclusion
41.	For all those reasons, we are satisfied unanimously that, on a true construction of the correspondence sent to the Appellants by the Society in 2006, they were given notice of termination of their then current contracts of employment.  Those contracts terminated on 10 May 2006 and as a matter of law they were on that date dismissed.  They were, of course, re‑employed from the same date under new terms and conditions of employment (without the benefit of the car lease arrangements beyond the end of 2008) but, as a matter of law, these employees were dismissed.

42.	In those circumstances, this claim will be remitted to the Employment Tribunal to consider further the question of whether the dismissal of these employees was unfair and, if so, what remedy (if any) follows.