LORD JUSTICE RALPH GIBSON: This is an appeal by the appellant, Mr Toju Christopher Boyo, the plaintiff in an action in Lambeth County Court, from the decision of His Honour Judge C.P. James of 17th March 1993 whereby he directed that there be judgment for the plaintiff for £8,050, as damages for wrongful dismissal, together with interest and costs against Lambeth Borough Council, ("the Council"). The plaintiff submits that he should have judgment for a much larger sum. The plaintiff is black: A fact which he says is relevant in this case.
The main issue in the appeal is whether the judge was right to hold that the plaintiff's contract of employment was effectively terminated by the Council at the date at which the judge held that to have occurred, and whether the judge correctly assessed damages upon the evidence before him. The Council submits that the judge was right in his approach to the case but, by cross appeal, contends that the judge went wrong in his assessment of damages by ignoring the evidence and by having regard to irrelevant considerations. The Council submits that the award should be much smaller.
Both the history of this dispute, and the way in which it appears to have been handled, give rise to ground for concern. This court does not know why the criminal charges against the plaintiff, to which reference is hereafter made, were handled as they were; and who, if anyone, was to blame for it. Both sides in this case were content for the issues pleaded to be decided in the court below before the end of the criminal proceedings at which time the plaintiff would have known whether he could effectively accuse any person of malice towards him, either in the initiation of the prosecution, if such persons could be held to be the prosecutor, or in passing information to the police which led to the making of charges. I make no complaint that we do not have this information: Such issues were not before the court below and are not before this court. Those in charge of the administration of the affairs of the Council, however, may wish to consider, when the full facts are available to them, the account of this dispute which follows and what steps may be necessary, and within their powers, to see that the story is not repeated.
The original cause of the dispute is that the plaintiff was suspected of fraudulent conduct in his work as a committee accountant in the employment of the Council with reference to housing benefit. He was charged with offences. No criminal charge has yet been brought to trial. The last charges made are still at the stage of committal proceedings. The plaintiff asserts that he is presumed to be innocent and, as to that, there has been no dispute. It is also to be assumed that the Council entertained suspicions about the conduct of the plaintiff, and made such reports as they did to the police, in good faith until the contrary is proved. The plaintiff submits that we should regard the Council, or the officers directly concerned with this dispute, as having set out deliberately to injure the plaintiff and to have been motivated by racial prejudice. The plaintiff made no allegation to that effect in these proceedings and he has no finding of fact by the judge to support his contention. I shall therefore, assume the good faith of the Council and its officers.
The relevant history is as follows.
(i) The plaintiff's employment by the Council began in July 1987. His appointment was subject to the National Scheme of Conditions of Service and to any standing orders and resolutions of the Council that might from time to time apply: See page B.38. The minimum period of notice of termination of service to which the plaintiff was entitled under the contract was, at the material time, one month. By paragraph 13 of the statement of particulars of employment (page 58);
"The disciplinary rules applicable to you will be found in the documents referred to in paragraph three of this statement and in the document entitled Disciplinary Rules which is attached."
The documents include a copy of the outline disciplinary procedure.
(ii) On 7th August 1991 the plaintiff was arrested with reference to enquiries by the police into allegations of fraud upon the Council. He was released on police bail to attend the next day. On 8th August 1991 the plaintiff met the Council's chief accountant, Mr Peter Davids, and told him what had happened. After a continuation of the meeting in the presence of an auditor, the plaintiff was told by Mr Davids that the plaintiff was suspended on full pay "until the matter with the police was resolved satisfactorily", upon conditions which included his not entering any Council building, not contacting any employee of the Council except for Mr Davids and the auditor, and upon his being available for work each day except when on leave.
(iii) The plaintiff cleared his possessions from his work place and reported to the police. He was charged with conspiracy to defraud the Council and conspiracy to defraud the London Borough of Greenwich.
(iv) He was released on unconditional bail to attend court for a committal hearing on 25th September 1991. He was paid his salary by the Council, who knew that he had been charged, for the months of August and September.
(v) On 25th September 1991 the committal proceedings were adjourned. Bail conditions were imposed the plaintiff says "at the behest" of the Council in the terms of the Council's suspension of the plaintiff and thereby as the plaintiff has alleged, those terms were given the force of law. The plaintiff was paid his salary for October 1991. On 18th october 1991 the plaintiff was again arrested regarding an allegation of conspiracy to pervert the course of justice and on 28th October 1991 he was charged with that offence. He informed the Council of the new charges.
(vi) The Council's letter to the plaintiff of 29th October 1991 was of importance and it must be set out in full: It was signed by Mr Gary Moss, Director of Finance Services.
"Re: Suspension from duty
I am writing to advise you that with immediate effect you are no longer suspended from duty with Lambeth Council. However, I understand that a fundamental condition of your bail is that you are not to contact any council officer as a result of which it appears you are by your own actions unable to fulfil your contract of employment.
Further, I am advised by the police that the situation is likely to continue for many months possibly until mid 1992. If this is correct you are effectively absent without permission in which case the Council can not continue to pay you.
Furthermore, as a result of your actions it appears that you have effectively frustrated your contract of employment and I have arranged for your employment records, P.45 etc., to be sent to you as soon as possible.
In view of this if you have any further representations to make with regard to your employment please arrange for your solicitor to discuss the matter with me before the end of the month".
(vii) That letter of 29th October 1991 was written upon advice given and recommendations made by senior officers of the Council set out in a report to the Urgency Committee of the Council. It was not disclosed by the Council but produced at the hearing on subpoena issued by the plaintiff. The plaintiff knew from his experience of working for the Council that such a document must exist. He has attached much importance to it in argument. The contents of it include the following:
"Frustration of contracts of employment:
Mr T Boyo Directorate of Finance Services
Ms C McDonald Directorate of Housing Services
Mr F Smith Directorate of Housing Services
Purposes
This report recommends that Mr Boyo, Ms McDonald and Mr Smith be regarded as being absent without permission in view of their bail conditions and that the Council ceases to pay them following frustration of contract.
Recommendations
(i) That Mr Boyo, Ms McDonald and Mr Smith be regarded as being absent without permission and cease to be paid with immediate effect.
(ii) That on the advice of legal services these staff have frustrated their contracts of employment and as a result have left the Council's service.
For decision
1. Reason for approval being sought under the urgency procedure.
1.1 Mr Boyo and Ms McDonald and Mr Smith are currently on suspension with full pay and this is likely to continue to be so for a considerable length of time, at the Council's cost, unless action is taken.
3. Justification
3.1 The Council faces a difficult employment situation within its existing policies and procedures in (these) cases...who have been charged with conspiracy to defraud Lambeth and are currently on bail pending a further court appearance. In addition Mr Boyo has been charged with conspiracy to defraud Greenwich Council, and all of the charges relate to fraudulent housing benefit payments.
3.2 The prosecution resulted from investigations originally initiated by the D.H.S. Housing Benefit Investigation and Recovery team and the D.O.F. Audit Division, the results of which were passed on to the police who have conducted further detailed investigations.
3.3 Without prejudice either to the outcome of the criminal prosecution or any disciplinary hearing, it is likely that disciplinary charges of gross misconduct could be proven against (the three persons) and that they would in all probability, given the nature of the charges, be dismissed without notice. However, the situation is complicated by the following...:
(a) The terms of the three officers' suspension are that they are to have no contact whatsoever with Council offciers as a result of which it is clearly impossible for them to carry out their duties.
(b) The police do not wish any of the three officers to have access to any Council documents except if required through official judicial channels. In addition any such access could clearly prejudice the security of any further evidence that may be found.
(c) The police do not wish to provide the Council with evidence they have themselves found, prior to any trial, without which it would be difficult to prove a disciplinary charge of gross misconduct.
3.4 As a result of the above it is technically impossible to hold a disciplinary hearing as the three officers would be entitled to question and call witnesses and examine evidence. In fact if the officers were instructed to attend the hearing, the Council would be asking them to breach their bail conditions resulting in their arrest and detention in custody until trial.
3.5 The officers are given to understand by the police that it is unlikely that the cases will come to trial within the next nine months.
3.6 The Council is thus faced with continuing to employ and pay officers who are charged with fraud against the Council, are innocent until proven guilty, and cannot be disciplined within the normal Council's procedures. If the officers' contracts of employment were to be terminated this might be a breach of their contract of employment. However, continuing to pay the three members of staff will cost the Council approximately £6,000 per month probably for a year.
3.7 As a result the officers are putting forward for members' consideration the option to remove these staff from suspension, to regard them as being absent without permission and as a result the staff cease to be paid. As outlined earlier in the report the officers are currently suspended, however in accordance with Council procedure the letter suspending them states that they must be available for work at the Council's discretion etc. However, members will see from the above that these officers are not available for work due to their conditions of bail and clearly given that the charges against them relate to defrauding the Council, and taking account of the time this matter is likely to take to resolve together with their non availability for work, there is a strong argument that they should not be paid. As a result in order to protect the Council's financial interest it is balance recommended that the three officers be regarded as absent without permission with immediate effect...
3.8 Given the advice from legal services it is proposed to accept as a matter of law that the contracts of employment of the staff concerned are frustrated and of no legal effect from 1st November 1991..."
(viii) The defendant made representations: He contended that the bail conditions did not frustrate his contract of employment because he was able and willing to work. He said that he would attend to work on 3rd November 1991.
(ix) His solicitors also made representations including the contention that the Council's use of the bail condition as frustrating the contract of employment was a sham.
(x) On 3rd November 1991 the plaintiff reported for work but was barred by the Director of Finance. The plaintiff went home and remained on leave to 11th November 1991. It is the plaintiff's case that, since that date he has been continuously available for work.
(xi) On 14th November 1991 solicitors for the plaintiff lodged an application to the Industrial Tribunal for compensation for unfair dismissal. The details of his complaint, after reference to the making of charges against him, his suspension from work, and the imposition of bail conditions, continued:
"The letter of 29th October 1991...was followed by the dispatch to the applicant of his P.45 and other employment records which were received by him on or about 2nd November 1991. The Council, in addition, failed to pay the applicant his salary on 15th November 1991. As a preliminary issue, the Industrial Tribunal is asked to rule on the question as to whether or not the actions of the Council amount to a dismissal. The applicant contends that if the actions of the Council amount to a dismissal the same is unfair in that the Council have failed to comply with their own disciplinary procedure."
(xii) The plaintiff's salary ceased at the end of October 1991. There was a committal hearing for both sets of charges on 27th November 1991 but the prosecution was not ready and all the charges were put over until 12th March 1992. On that date the prosecution offered no evidence against the plaintiff and all the charges were dismissed.
(xiii) The plaintiff was arrested a few days later and charged with offences of handling certain cheques knowing them to have been stolen contrary to section 22 of the Theft Act 1968. These charges also arose out of the plaintiff's work for the Council. Those further charges came before the Magistrates' Court on 14th May 1992 when the prosecution again offered no evidence and the plaintiff was discharged.
(xiv) The plaintiff began these proceedings on 13th May 1992. On 9th June 1992 the plaintiff was arrested again and was charged with offences relating to the same range of factual matters. At the time of the hearing before the judge those proceedings were pending and, when this appeal came before this court, we were told that they are still the subject of the committal proceedings.
The course of the proceedings
In summary, the plaintiff's pleaded case was that his contract of employment was not frustrated by operation of law and that it was the Council by its Director of Finance which had debarred him from performing his duties. He asserted that he had always been and continued to be available for work. He therefore "sued for arrears of salary and interest so arising including the overhead charges". Those charges were said to have been caused by his need to borrow money. Salary was claimed for the months of November to May 1992 in the net sum of £11,200 together with interest.
The Council by its first amended defence asserted that the Council had told the plaintiff that, as a result of the imposition of the bail conditions, the plaintiff was unable to perform his contract of employment and that the contract was therefore determined by operation of law. By its re amended defence, settled by counsel, the Council asserted that the plaintiff's contract of employment had been frustrated as a result of his own actions; and that, if the contract had not been frustrated, the plaintiff was in breach of the express or implied terms of the contract in that he had failed to account for all the monies entrusted to him by the Council and the plaintiff was in breach of his duty to serve the Council with fidelity and good faith. This re amended defence contained no particulars whatever with reference to any failure to account for monies entrusted to the plaintiiff or with reference to his alleged breaches of fidelity. The solicitor acting for the Council was Mr D.V. Tatlow, chief solicitor with Lambeth Legal Services.
It is clear from the papers before the court that there were many interlocutory proceedings. Neither side has relied upon any particular document or order of the court with reference to the issues arising in the appeal and cross appeal. The hearing began on 9th December 1992. The plaintiff has at all stages conducted his action without a lawyer. Miss Williams appeared for the Council. The plaintiff began his evidence. He asserted in his evidence that it was a term of his contract of employment that the disciplinary procedure, for which provision was made in his contract, be used before he could be dismissed and that therefore any dismissal alleged without such procedure was invalid.
On the 9th December 1992 the judge, as was to be expected, had ordered the Council to deliver particulars under its re amended defence with reference to the allegations of breach of duty against the plaintiff and also to serve upon the plaintiff a supplementary list of documents. This was done on 6th January 1993. The further and better particulars referred to specific cheques and to a computer printout of some 20 payments in April, May and June 1991. The hearing continued on 3rd February 1993. Miss Williams them informed the court that the Council "was not proceeding on the issue of frustration" and was "unable to prove gross misconduct" and was therefore "defending only as to quantum". The plaintiff has said that he thereupon announced that he was still contending that his contract of employment still existed.
When Miss Williams announced that the Council was "not proceeding on the issue of frustration" and was "unable to prove gross misconduct", the consequence was that the Council was left with no pleaded case as to the means by which the plaintiff's contract had been terminated or on what date. The Council did not seek to amend and was not required to do so. The Council had, however, put damages in issue and the Council was entitled to submit that the letter of 29th October 1991, upon which the plaintiff relied, was in effect a wrongful dismissal by the Council of the plaintiff. It was upon that basis that the hearing continued.
The plaintiff's evidence continued. The hearing was adjourned to 8th February 1993 when submissions were made.
The grounds of decision of Judge James: 17th March 1993
(i) The judge noted the contention of the plaintiff that "the employment is still continuing", and the assertions of the Council that "it ended long ago" and that "in fact the Council summarily dismissed the plaintiff".
(ii) Since the Council had abandoned the attempt to justify the dismissal of the plaintiff, if the plaintiff failed to establish that he is still employed by the Council, the plaintiff had an alternative claim for wrongful dismissal and this obvious alternative was dealt with in evidence and in argument although not in the plaintiff's pleading.
(iii) After reviewing the history of the dispute, the judge referred to the meeting of the committee of the Council of 28th October 1991 when it considered written advice from the Council's solicitor (paragraph (vii) above) and decided to dismiss the plaintiff from his employment with immediate effect. The decision of the Council was conveyed by letter of 29th October 1991. In addition to telling the plaintiff that his P.45 would be sent to him as soon as possible a classic sign of dismissal the letter attempted to explain the reasoning behind the Council's decision. The letter included the sentence:
"I understand that a fundamental condition of your bail is that you are not to contact any Council officer, as a result of which it appears that you are by your own actions unable to fulfil your contract of employment."
(iv) the plaintiff purported to take this passage at its face value and at once made arrangements with the CPS and the court for that condition to be varied, so that he could contact Council employees with the consent of the Council but, in the view of the judge, there was never any chance that that variation would make any difference to the committee's decision to dismiss the plaintiff because the nature of the criminal charge was such that, in his judgment, the plaintiff would inevitably remain suspended until the criminal charges were disposed of and the Council's decision was really intended to eliminate a long expensive suspension.
(v) Having been thus dismissed by the letter of 29th October 1991 the plaintiff received no salary after the end of October 1991.
(vi) Reference was made to the further dismissals of criminal proceedings and to new charges and to the commencement of the plaintiff's civil proceedings. The judge recalled that on 27th November 1992 he had directed that the hearing should commence on 9th December 1992 notwithstanding the fact that new criminal charges were outstanding. (This court has been told that neither side asked the court to adjourn the proceedings until after the conclusion of the criminal proceedings).
(vii) After the abandonment on 3rd February 1993 by the Council of any attempt to justify the dismissal of the plaintiff there remained the question whether the plaintiff's employment had been terminated in October 1991.
(viii) As to the basis upon which the issue of quantum was to be decided, i.e. Whether the plaintiff was entitled to arrears of salary for a continuing employment or to damages for wrongful dismissal, the plaintiff was, in the judge's view, dismissed by the letter of the 29th october 1991. The letter spoke for itself and furthermore the director of finance, who signed the letter said in evidence that the letter was a dismissal letter.
(ix) Although the plaintiff had not stated any acceptance of his dismissal, the plaintiff had in reality accepted that repudiation, whatever he might say or not say. He was intelligent and had studied the law. He had deliberately formulated his case in a particular way (i.e., as I understand it, to claim arrears of salary and interest thereon) for tactical reasons and he knew it to be contrary to reality. Long ago the plaintiff realised that his employment was at an end and accepted that. Reference was made to the judgment of Buckley LJ in Gunton [1980] IRC 755 at 773E.
(x) The plaintiff's acceptance of the repudiation of his contract of employment could be dated more or less to the time in the action when he was ready for trial and obtained a hearing date, i.e. When he firmly committed himself to a contested hearing.
(xi) The plaintiff in any event would not be entitled to sue for salary for any period during which he had not actually carried out work.
(xii) As to the damages, the plaintiff was entitled to one month's notice. He was also entitled to certain disciplinary procedures. The procedures were not used. The appropriate length of time was disputed. The starting point was October 1991. He reviewed the relevant factors, including his own experience of the defendant Council from sitting in the Lambeth County Court, and assessed the time required at five months to which he added the period of notice applicable to the plaintiff's employment.
(xiii) There was no evidence of failure by the plaintiff to mitigate his loss.
(xiv) The plaintiff had argued that damages should take account of other factors, including continuation of employment beyond the date of conclusion of the disciplinary proceedings, but in his view the plaintiff had no right to further damages.
The appeals
The plaintiff appealed by notice of 7th April 1993. In place of the judge's award the plaintiff claimed an order that the Council pay to the plaintiff damages as follows:
(i) The plaintiff's salary for the months November 1991 to February 1993 with interest at 33%;
(ii) salary for the 12 months ending February 1994;
(iii) salary for the 13 months ending March 1995;
(iv) salary for the five years ending in the year 2000 with salary as at the date of judgment as the multiplier. That was calculated by the plaintiff to amount to £155,738. The plaintiff asked, and was given, leave to amend his notice to appeal so as to claim damages based upon a 10 year multiplier.
The grounds of appeal included the following:
(i) The plaintiff's contract of employment was not frustrated. The distinction between frustration and dismissal for breach of contract is of critical importance because, if it is a case of frustration, there is no dismissal and vice versa. Since the letter of 29th October 1991 purported to terminate the plaintiff's contract of employment on grounds of frustration, and there was no frustration, it was a sham. It was not until the re amended defence of 29th October 1992 that the issue of dismissal was raised.
(ii) The disciplinary procedure is part of the plaintiff's contract of employment and its effect is to disable the Council from dismissing the plaintiff on disciplinary grounds without the implementation of the disciplinary procedure. That procedure does not curtail the Council's power to dismiss the appellant on a month's notice upon grounds other than disciplinary grounds but the Council, having elected not to use that power, cannot now rely upon it. The disciplinary procedure would not have commenced until the conclusion of the criminal proceedings.
(iii) The plaintiff has suffered great injustice as a result of the deliberate actions of the Council. The wrongful dismissal of the plaintiff only operated as a repudiation of the contract by the Council and that could only determine the contract when accepted by the plaintiff.
(iv) The assessment of damages was against the weight of the evidence and wholly erroneous. It could not be said that the plaintiff accepted the wrongful dismissal at any time other than at trial on 3rd February 1993 when the Council admitted that the contract was not frustrated; that they could not justify the dismissal; and sought an assessment of damages. The judge failed to consider the Council's committee report of 28th October 1991. The judge also failed to have regard to the fact that disciplinary procedure would not be completed until after the end of the criminal proceedings and he should have allowed nine to 12 months in respect of it.
(v) Next, the judge was wrong to assess damages on the basis that the conclusion of the disciplinary proceedings would have led to dismissal of the plaintiff: On the material before the judge the likely outcome was that the plaintiff would remain in employment. Further, as to damages, the judge was wrong to interpret the letter of 29th October 1991 otherwise than by reference to what was stated in it; and in failing to calculate damages as in the case of a claim to damages in a personal injury case.
The Council by respondent's notice dated 30th April 1993 contended that the award of damages should be reduced on the ground that the judge had failed to have regard to the evidence of the chief personnel officer of the Council, Ms Jocelyn Fisher, who was called by the plaintiff, and to the dicta of this court in Gunton v. Richmond BC [1980] ICR 755.
The submissions for the Council included contentions that the judge ought to have held that the plaintiff accepted the repudiation of the contract by the Council on any one of a number of dates earlier than that adopted by the judge. They were (i) 29th October 1991, when the plaintiff received the letter; (ii) the receipt of the P.45 on 2nd November; (iii) the 15th November 1991 when his salary was not paid; (iv) the 25th November 1991 when he made his application to the Industrial Tribunal; (v) 18th December 1991 when the Council served its response to his application.
Conclusion
There has long been an unresolved controversy, as is pointed out in volume 16 of the Fourth Edition of Halsbury's Laws, 1992, at paragraph 303, as to whether (i) the contract of employment is an exception to normal contract law so that an employee wrongfully dismissed by his employer must accept that repudiation because, according to the "unilateral" theory, the employee's only remedy in law becomes one of damages, and a repudiation of a contract of employment automatically terminates it; or (ii) contracts of employment are not formally exceptions to the normal rule that a repudiation of a contract is not effective unless and until the innocent party accepts that repudiation: See the cases there cited. The arguments and authorities have been considered in various cases including Gunton, and Dietmann v. Brent LBC [1988] ICR 842.
The matter was argued in Rigby v. Ferodo Ltd [1988] ICR 29, but it was held by the House of Lords that it was not, for the decision of that appeal, necessary to decide the question. Lord Oliver at page 34E said:
"In his dissenting judgment in Gunton's case, Shaw LJ expressed the view that the practical basis for according an election to the injured party has no reality in relation to a contract of service where the repudiation takes the form of an express and direct termination of the contract in contravention of its terms. The contrary (and majority) view is that, whilst from a practical point of view a wrongful dismissal puts an end to the status of the dismissed employee as an employee and confines him to a remedy in damages for breach of contract (so that there will normally be little difficulty in inferring an acceptance of the repudiation), there is no reason in principle why, if the employee clearly indicates that he does not accept the employer's breach as a termination of the contract, it should not remain on foot and enforceable so far as concerns obligations which do not of necessity depend on the existence of the relationship of master and servant....., there is much to be said for both views..."
The decision of this court in Gunton's case, however, was binding upon Judge James and is binding upon this court in respect of matters of decision there set out. The facts of this case, as it seems to me, raise the question as to which of the two theories is correct. The judge was invited to approach this case by the Council on the basis of the view of the majority in Gunton's case, that is to say that mere unilateral repudiation does not terminate a contract of employment. As is apparent from his judgment, he considered by what date the plaintiff was to be treated as having accepted the repudiation. The Council by Miss Williams has not asked this court to consider the question, and has not submitted that the decision in Gunton's case can be distinguished in any relevant way. She has invited us to approach the case, in the same way as did the judge, upon the principles stated by the majority in Gunton's case. For the reasons which follow, I think that Miss Williams was right in the course which she took and to the extent that I, in the course of argument, expressed some surprise, I was wrong. The plaintiff was asserting, of course, that the contract of employment had not come to an end and, indeed, that he had not been dismissed. He has at no time accepted the approach to the question of damages applied by the judge or by the majority in Gunton's case. It is necessary for this court to determine what were the grounds of decision of the majority in that case.
The plaintiff has invited the court to regard the Council as having deliberately injured the plaintiff for wrongful motives. The Council asserted that the contract of employment was frustrated. No doubt that was done with the intention of avoiding any liability for damages or under the statutory provisions for compensation for unfair dismissal: See Shepherd & Co v. Jerrom [1986] ICR 802. The concept of frustration is applicable to a contract of employment. To answer the question whether this contract was frustrated would have required examination of the circumstances in which the charges had been made against the plaintiff, and the conditions of bail imposed which prevented the plaintiff from doing his work. Since the position of the Council was that it could not, before conclusion of the criminal poroceedings, put forward the evidence, or all of the evidence, relevant to the charges against the plaintiff, it is difficult to see how the Council could, before that conclusion, set out to prove its case on frustration. That case of the Council must have been that, as a result of the conduct of the plaintiff the situation had been brought about in which the Council, without fault on their part, were caused to report his actions to the police, so as to cause the plaintiff to be charged, and to be prevented from working for a long period of time by the bail conditions imposed by the court, and in which the Council were properly caused to refuse to permit the plaintiff under those bail conditions to have contact with servants of the Council. The Council abandoned this defence at the trial and it was therefore not investigated.
The Council's stated case with reference to frustration was that the contract of employment had been frustrated as a result of the plaintiff's own actions: See the re amended defence and the letter of 29th October 1991. If the conduct of the plaintiff had caused the contract to be frustrated he would by his actions have disabled himself from performing his obligations; and, if it could be proved that he had done that, the plaintiff himself repudiated the contract of employment and, upon acceptance of that repudiation, the contract was at an end. To prove that the plaintiff had thus repudiated his contract, at a time when he had been charged only with offences, in proceedings which on some three occasions had been brought to an end by being abandoned by the prosecution, would be impossible if the Council was not willing to prove what the Council was asserting the plaintiff had done so as to cause the charges to be made.
Nevertheless, I see nothing sinister or unfair in what the Council set out to do. The plaintiff told us that other servants of this Council, and perhaps of other councils, who had been charged with fraud, had been suspended on full pay for as long as two years. He asserted that he should have been treated in the same way, that is to say he should have been left on suspension on full pay until the criminal proceedings were completed. For my part I can see no ground for holding that the Council were, as a matter of fairness, obliged to treat the plaintiff in that way. I can see no reason why a servant of a council should be entitled to receive full pay for as long as it takes for all or any criminal proceedings to be concluded. It may be that a contract could be devised which would force the Council so to act but it would be surprising if the Council would agree, or could agree to such terms within the limits of their obligations to act reasonably.
As I have said, I approach this case on the basis that the good faith of the Council is to be assumed. The only allegation against the good faith of the Council made by the plaintiff was that the use of the bail conditions in the Council's allegation of frustration was a sham: Paragraph 8.3 of the particulars of claim. The plaintiff, as I understand it, was inviting the court to regard that assertion as self evident. In addition, he relied upon the report to the committee set out above at paragraph (vii) of the history. There is no finding that the Council acted otherwise than in good faith and, in my view, there is no material upon which such a finding could be made.
It was not, in my judgment, unreasonable for the Council to consider that it was necessary not to disclose their evidence to the plaintiff before conclusion of the criminal proceedings. I can well see that difficult questions of fact would arise with reference to proof of a contention of frustration. It was, in my judgment, open to the Council to serve notice to terminate the plaintiff's contract on the basis that it was, in their judgment, necessary in the interests of the Council to bring his contract of employment to an end and it was not possible to proceed by way of disciplinary proceedings. If the Council had taken that course, the effect would have been that the plaintiff would have been dismissed and he could have applied for compensation for unfair dismissal. The effect of the fact that Council would have failed to use the procedure for disciplinary proceedings would have been determined by the Industrial Tribunal upon the information before that tribunal. As set out above, the plaintiff did prudently, and to protect his position, lodge an application for compensation for unfair dismissal with the Industrial Tribunal.
If, instead of doing that, the Council chooses for reasons stated by them to exclude the plaintiff from his employment, and thus to repudiate the contract of employment, if that is what the Council did, the extent of the liability of the Council, if the servant does not accept that repudiation at once, will depend upon the relevant principles of the law of contract. There is no ground for enlarging any award by reference to any alleged intention deliberately to injure the plaintiff.
It is next, therefore, necessary to determine what was decided by this court in Gunton's case. The facts were that Mr Gunton was employed as a college registrar under a contract terminable by one month's notice. Regulations, which prescribed a procedure for the dismissal of employees on disciplinary grounds, formed part of his contract. On 14th January 1976 the defendant gave notice to terminate Mr Gunton's contract on 14th February and he was told he was not required to attend work The reason for the dismissal was disciplinary but the procedure had not been fully followed. Mr Gunton brought in 1976 an action for a declaration that the purported termination of his contract was void and that he remained registrar. The judge at the trial in October 1978 declared that the notice was ineffective lawfully to determine the contract of employment and, on Mr Gunton at trial electing to claim damages at common law, ordered an enquiry as to damages on the basis that Mr Gunton was entitled to remain in his employment until retirement, unless in the meantime liable to redundancy or dismissal under then procedure, and subject to the obligation of then plaintiff to mitigate his loss.
As I understand the effect of that order Mr Gunton would have been entitled to recover either his salary, since he was willing to perform his obligations, or damages in the amount of his salary, subject to reduction for failure to mitigate if any, from the date of the notice on 14th January 1976, giving credit for any payment, down to the date of assessment of damages and, thereafter, such sum as represented his probable earnings, having regard to the assessed risks of redundancy, discharge on disciplinary grounds and, pursuant to the duty to mitigate, the amount of probable future earnings. That, in substance, is what the plaintiff claims in this action should have been awarded by the judge.
In Gunton's case Shaw LJ held that Mr Gunton could not remain idle and demand his salary because he had not earned it. If he claimed damages he must, by implication, treat his contract as at an end because the court would not re instate him by an order for specific performance. Mr Gunton had, since his dismissal, had other employments for short terms. That would constitute acceptance of the repudiation but that was not necessary: The wrongful dismissal in January 1976 brought the contract to a summary end. It did not matter for calculation of damages because, if the contract was brought to an end, as Shaw LJ held that it was, and if Mr Gunton suffered damage as a result of the disciplinary procedure not being followed, he would be entitled to recover that damage. He therefore concurred with the order proposed by Buckley LJ.
Buckley LJ approached the issue of damages as follows. The council's dismissal of Mr Gunton was wrongful but it was nevertheless a dismissal and de facto it brought his employment to an end. Having considered the previous decisions on the effect of a wrongful repudiation upon a contract of employment, Buckley LJ (page 771) held that the doctrine of the need for acceptance of a repudiating act operated in the case of a contract for personal services as in the generality of contracts. Cases of wrongful dismissal, however, in breach of a contract of personal services have certain special features: They included the fact that a servant cannot sue in debt under the contract of remuneration in respect of any period after the wrongful dismissal because the right to receive remuneration and the obligation to render services are mutually interdependent. A wrongfully dismissed servant had, in the absence of special circumstances, no option but to accept the master's repudiation of the contract. Therefore, in the absence of special circumstances, the court should easily infer that the innocent party has accepted the guilty party's repudiation of the contract. Mr Gunton accepted repudiation at the trial if not earlier.
Lord Justice Buckley dealt with the damages in Gunton's case as follows.
(a) If the master, who is entitled to dismiss on not less than three months' notice, purports to dismiss summarily, the dismissal is a nullity and the servant can recover as damages for breach of contract three months' remuneration and no more subject to mitigation: I.e., for the three months following dismissal.
(b) But if the master were to dismiss the servant summarily and the servant did not accept the master's repudiation of the contract until the end of 10 weeks from the exclusion of the servant from his employment, then, if acceptance of repudiation is required in master and servant cases, the master is guilty of a breach of contract continuing from day to day for refusing to offer employment from the date of exclusion down to the date of acceptance and thereafter on the basis of wrongful repudiation.
(c) The servant could not claim damages under the second head in relation to a period of three months from the date of acceptance, as well as damages under the first head in relation to the 10 week period, because his cause of action would have arisen when wrongfully excluded from his employment. Subsequent acceptance of the repudiation would not create a new cause of action although it might effect the remedy. The question must be for how long the servant could have insisted at the date of commencement of the cause of action upon being continued in his employment.
(d) Therefore, Mr Gunton was entitled at 14th January 1976, when he was excluded from his employment, to insist upon a right not to be dismissed on disciplinary grounds until the disciplinary procedures were recommenced and carried out in due order but with reasonable expedition. He was thus entitled at 14th January to damages assessed upon the basis of a reasonable period from 14th January 1976 plus one month.
Brightman LJ agreed with the proposed order. Mr Gunton was by necessity confined in his remedy to damages. The damages recoverable are the monies needed to compensate Mr Gunton for his net loss of salary during the period for which the employer was bound by his contract to employ Mr Gunton. Because of the incorporated regulations as to staff discipline, the Council had a right to dismiss the plaintiff on one month's notice, but they could not lawfully act on a recommendation for dismissal on a disciplinary ground unless the disciplinary procedure had been followed.
For my part, I have difficulty in accepting in full the validity of this reasoning. In Sanders v. Ernest Neale Ltd [1974] ICR 565, in one of the cases cited by Lord Justice Buckley in Gunton, Sir John Donaldson, President of the NIRC, referred to the reasoning of Sachs LJ and of Salmon LJ in the Decro Wall case [1971] 1 WLR 361. He continued:
"In essence it proceeds by the following stages.
(i) A servant cannot sue for wages if he has not rendered services, and the wrongful dismissal prevents him from rendering services. (ii) This leaves him with a claim for damages as his only remedy. (iii) Any claim for damages is subject to a duty to mitigate the loss and the only way to perform this duty is to accept the repudiation as terminating the contract of employment and seek other employment.
If there is any fault in this line of reasoning, it lies in point (i). Why should not the servant sue for wages if it is the act of the employer which has prevented his performing the condition precedent of rendering services? And if he can sue in debt for his wages, no duty to mitigate would arise and there would be no practical necessity to accept a wrongful dismissal as terminating the contract of employment. Provided that the employer is solvent and the servant is sure that the dismissal was wrongful."
Further, if there is a requirement of law for acceptance by the servant of the repudiation by the master, I am unable to see why it is not a requirement for a real acceptance, that is to say a conscious acceptance intending to bring the contract to an end or the doing of some act which is inconsistent with continuation of the contract. If that is right, I do not understand how the courts would apply the notion of "easily inferring that the innocent party has accepted...the repudiation". Further, I do not understand why the taking of employment should automaticcaly constitute acceptance. If I tell my employer, who has in breach of contract refused to let me do my work, that I do not accept his repudiation; and that I shall get another job but remain willing and able to do my work when sent for by him; why should I be treated as having accepted what I have not accepted? And should it make any difference that I know enough of the law to give such a notice to my repudiating employer?
To the majority of the court in Gunton's case, however, it was clear that it would be contrary to the basic concepts of the law of contract, in the absence of special circumstances in which the court may prevent an employer from implementing a decision to dismiss, to require an employer who has de facto dismissed a servant in breach of contract, to pay damages on the basis that the employer's obligation to the servant continues after the end of that period of time by which under the terms of the contract the employer could lawfully have brought it to an end as from the date of the dismissal. That was also the opinion of Shaw LJ who agreed with that of Sir John Donaldson expressed in the case of Sanders v. Neal. I agree with it also.
I also accept that principle must permit the continued existence, after a wrongful dismissal which brings the de facto relationship of master and servant to an end, of obligations contained in the contract which, in Lord Oliver's words in Ferodo, "do not of necessity depend on the existence of the relationship of master and servant", such as the provision for disciplinary proceedings when held to be relevant to the assessment of damages, or to a term restricting the actions of the servant after termination of the contract such as was considered by Sir Robert Megarry VC in Thomas Marshall Exports v. Guinle [1978] ICR 905.
Subject to that qualification, if it were open to this court to depart from the conclusion of the majority in Gunton, I would prefer the view expressed by Sir John Donaldson in Sander's case. It seems to me, however, that this court is not free to depart from that decision with reference to any matter which was in that case a ground of decision. The grounds of decision include the reasoning stated by Buckley LJ which, as set out above, limited recovery by Mr Gunton to the reasonable time for disciplinary procedures plus one month from the date of wrongful exclusion.
Was the plaintiff wrongly dismissed by the letter of 29th October 1991? The plaintiff has argued that he was not. The judge held that the letter spoke for itself. The parties were entitled to give evidence of the circumstances known to both sides in which the letter was written in order to enable the judge properly to assess its meaning. That would include the effect of a reference to a P.45. The view of the Director of Finance of the Council, however, as to whether it was a dismissal letter was inadmissible because irrelevant. I agree with the judge that the letter spoke for itself and that it was a dismissal letter: I.e. It informed the plaintiff that his contract of emplyment was, so far as concerned the Council and its future actions, at an end. The meaning and effect of the letter does not depend, in my judgment, on the accuracy of the legal reasoning on which it was based. The invitation to the plaintiff to make representations made no difference.
If acceptance by the plaintiff of the repudiation was necessary, was there acceptance? In my judgment, there was not, at any time before the hearing, unless "acceptance" for this purpose can be taken to mean no more than the internal but unwilling acknowledgement that the plaintiff will not escape from being treated as if he had accepted. As stated above, I do not accept that it can properly be taken to mean no more than that. I can see no relevance in the fact that the plaintiff had deliberately formulated his case in a particular way for tactical reasons. If the law permits him to do so why should he not? The decision by the Council to have recourse to the concept of frustration was for tactical reasons. Further, for the plaintiff firmly to commit himself to a contested hearing of his action, in which he was claiming arrears of salary on the basis that he had not been dismissed, was not in my judgment an action capable of being regarded as acceptance of the Council's repudiation.
The plaintiff, however, agrees that he did accept the repudiation at the trial. The judge was, I think, entitled not to be concerned as to the date at which there was acceptance of the repudiation because, since he was bound to apply the views of the majority in Gunton's case, acceptance at the trial or at an earlier date, made no difference to the assessment of damages. Since, as the plaintiff has acknowledged, he did eventually accept the repudiation, the decision of this court in Gunton's case, in my judgment, requires us to hold that the plaintiff's claim for damages arose on 1st November 1991 and was to be assessed according to the principles applied by the judge. I would therefore dismiss the plaintiff's appeal insofar as he asks the court to allow in full his salary, or damages in lieu of it, from 1st November 1991 to the date of trial and, in addition, damages for prospective loss from the date of his acceptance.
The plaintiff, if that ruling is right, nevertheless contends that the judge was wrong in his assessment of the reasonable period required for the carrying out of the disciplinary procedure because it could not have been carried out until after the conclusion of the criminal proceedings. There is, I think, some force in this point. The Council took the course set out in their letter of 29th October 1991 because they could not, in their judgment, properly conduct the disciplinary procedure For my part, however, I do not accept that upon the terms of the plaintiff's contract of employment he is entitled to assert for the purposes of the assessment of damages that the Council could not lawfully in November 1991 terminate his employment until after completion of the criminal proceedings.
The terms of the contract were as follows. In the plaintiff's statement of particulars of employment, as already noted earlier in this judgment, there were set out in paragraph 11, "Notice of Termination", the minimum periods of notice of termination of service to which the plaintiff was entitled. Having regard to his periods of continuous employment, the notice was at the material time one month.
In paragraph 13, "Disciplinary Rules", the disciplinary rules applicable to the plaintiff were said to be found in the documents referred to in paragraph three of the statement and in the document entitled "Disciplinary Rules".
That document provided:
"The disciplinary rules applicable to you will be found in both the conditions of service referred to in paragraph three in your written statement of particulars of employment and in this document. Any breaches of these disciplinary rules will render you liable to disciplinary action as set out below.
A Gross misconduct
Gross misconduct is defined as conduct by you of such a serious nature that the Council is justified in no longer tolerating your continued presence at your place of work. An allegation of gross misconduct will normally lead to your immediate suspension from work, pending investigation. Where, after due consideration, the allegations against you are substantiated, you will be dismissed either with or without notice unless there are any mitigating circumstances. Examples of gross misconduct relating to all employees include: (i) unauthorised removal, possession or theft of property belonging to the Council..."
It is unnecessary to refer to the remaining provisions which describe other heads of gross misconduct and what is called "other misconduct".
The Council did not, in my judgment, by those terms undertake never to dismiss an employee, against whom charges have been made by the police of wrong doing which amounts to gross misconduct, until completion of disciplinary charges. The contract provided that "any breach of the disciplinary rules will render the employee liable to disciplinary action" as there set out. The Council, however, commits no breach of the contract, express or implied, in my judgment if, in good faith and on reasonable grounds, it decides not to initiate disciplinary action against an employee. As I have already said, it is not open to the plaintiff to contend that the Council acted otherwise than in good faith and on reasonable grounds.
In such circumstances, it is, in my view, unreal to allow for the purposes of assessment of damages any period for the carrying out of disciplinary procedures. The Council, however, invited the judge to do so and, properly, do not seek to escape now from that concession. The plaintiff's appeal, therefore, insofar as he seeks increased damages cannot, in my judgment, succeed.
There remains the Council's cross appeal. It is contended that assessment of the period of five months as the reasonable period for the carrying out of disciplinary procedures was excessive and not supported by the evidence. I do not accept that the judge was bound to adopt as applicable the reference of the witness Ms Jocelyn Fisher, who was called by the plaintiff, to "two to three weeks for straightforward charges". The judge was entitled to regard this case as not straightforward. Next, it was said that the judge was not entitled to act upon "his experience of the defendant Council's sitting in this court" in other cases and that, if the judge was to have regard to such matters, he should have raised them with Miss Williams, who appeared for the Council, in the course of the hearing and the judge had not done so. I agree that the judge should not rely upon the actions of Lambeth Council as litigant in other cases without, by raising the matter in due time, providing full opportunity to the Council to deal with them. In most cases it will not be a proper course, as I think, to rely upon such extraneous matters because of the difficulty of ensuring that the Council's representative is able properly to deal with them. I would not, however, interfere with the judge's assessment of damages. It is obviously very generous indeed, and probably in excess of the plaintiff's precise entitlement at law. The money must come out of the funds provided by the charge payers of Lambeth. I have these matters much in mind. The judge, however, had ample material before him from the facts of this one case which justified his view that the Council by their officers and legal staff could not be assumed to have been able and willing to deal so efficiently and swiftly with the preparation and conduct of disciplinary proceedings in this case, as to require time less than that fixed by him, on the assumption, which the judge was invited to make, that such proceedings were carried out following 1st November 1991. I would dismiss the cross appeal.
LORD JUSTICE STAUGHTON: The principal conclusions of Judge James in this case were as follows:
(1) The Council's letter of 29th October 1991 was a repudiation of the contract of employment.
(2) Unilateral termination by the Council was ineffective until accepted by Mr Boyo.
(3) It was accepted by Mr Boyo being ready for trial and obtaining a hearing date. (This occurred on some day between May and December 1992).
(4) Nevertheless Mr Boyo could not recover his salary up to that date, or for any period after October 1991, since he had not done any work.
(5) He could recover damages for a period starting at the end of October 1991.
(6) That period should be the sum of one month (the minimum notice required) and the time that disciplinary procedures could be expected to take.
(7) Disciplinary procedures would have taken 5 months.
I agree with the judge's conclusions on points (1) and (7). As to point (1), the Council's letter of 29th October 1991 was a forthright repudiation of the contract of employment. It said in so many words that Mr Boyo would no longer be employed, and no longer paid. The excuse given (frustration) could not be supported, as is now accepted.
On point (7), I can readily accept the judge's conclusion, contrary to the evidence of Miss Fisher, that it would have taken five months for disciplinary proceedings to be completed. As with arbitrators, I consider that a judge ought to inform the parties during the hearing if he has relevant knowledge which he proposes to take into account: See Navrom v. Callitsis Ship Management SA (1988) 2 Ll R 416. But if Judge James did err in that respect, as the Council asserts, I would still accept his finding.
I now turn to points (2) to (6) of the judge's reasoning. In my opinion -
(a) those points are established by the authority of this court (through a majority) in Gunton v. Richmond-Upon-Thames LBC (1981) Ch.448; and
(b) the judge was obliged to follow that decision, as we are; but
(c) I would otherwise have reached the opposite conclusions.
Not only are we bound to follow the majority view in Gunton's case. Miss Williams for the Council disclaims any wish for us to depart from it. Perhaps the Council take the view that, for good or ill, the claim of Mr Boyo should be finally determined in this court; and have no desire to achieve immortality as the defendants who took the point to the House of Lords. What is more the monetary result which the judge reached was much nearer to the sum which I would have reached if Gunton's case had not been binding upon us, than that which Mr Boyo contends for.
Unconstrained by authority, my conclusions on points (2) to (6) would have been as follows:
(2) A direct repudiation, whether by employer or employee, determines a contract of employment. Such a contract is in that respect in a class on its own. An employee cannot be compelled to work if he declines to do so, nor can be restrained from working for anybody else. So the employer too should not be compelled to treat the contract as still in existence against his will.
(3) I see no ground for treating something as acceptance of repudiation in an employment case, if it would not be an acceptance in the general law of contract. It must demonstrate to the guilty party that the contract is accepted as at an end. Mr Boyo was not doing that when he pursued his claim for arrears of salary.
(4) Although there is powerful authority to the contrary, I do not accept that an employee has no right to salary if he has done no work. Interestingly enough, it seems that Lambeth Council pays its employees on the 15th of the month, although only half their work has then been done.
(5) If, as Gunton's case and Judge James held, a contract of employment is not terminated by repudiation, I would have awarded Mr Boyo his salary up to the date of trial. However, I consider (as stated in point (2) above) that it is terminated; so I would agree that Mr Boyo is entitled only to damages calculated as at 1st November 1991.
(6) Those damages, in accordance with the ordinary law, should be assessed on the basis that the council would otherwise have brought Mr Boyo's employment to an end as soon as they lawfully could. For the period thus ascertained Mr Boyo should be awarded a sum equal to his salary less what he earns, or should have earned, elsewhere in mitigation. I rather think that, in agreement with Shaw LJ and for the reasons which he gave, I would have taken that period as one month, and not included the time which would have been taken by disciplinary proceedings. But the point is not easy. As it is, Gunton's case decides that the disciplinary period should be included.
There remains the point that disciplinary action would or might have been postponed until after the completion of criminal proceedings. Like Ralph Gibson LJ, I would not on that ground increase the total period of six months for which damages are awarded. In the first place, the allowance of a period for disciplinary proceedings is artificial, notional, hypothetical: On the facts admitted or proved Mr Boyo was guilty of no misconduct and no crime; so proceedings, whether disciplinary or criminal can, with hindsight, be assumed to have ended as soon as they were begun. Secondly, I only allow a five- month period for disciplinary proceedings because Gunton's case says that I must. It requires no more than that.
It is unusual, and perhaps improper, for this court to be so critical of a decision by which we are bound. But we have been somewhat critical of the administrative conduct of the council in this case. It is only fair to confess that the law cannot stand in a white sheet, and in this area is distinctly lacking in rhyme and reason. I would dismiss the appeal and the cross-appeal.
SIR FRANCIS PURCHAS: The circumstances and authorities relevant to this appeal have been fully set out in the judgment of Ralph Gibson LJ and need not be repeated here. The issues with which His Honour Judge James was concerned arose out of a contractual engagement entered into by the parties for the provision of personal services as an accountant by the Appellant Mr Boyo to the Respondent Council -- the London Borough of Lambeth ("The Council").
The contract included the National Scheme of Conditions of Service and was subject to any standing orders and resolutions of the Council that might from time to time apply. It is however only relevant to notice two terms of the contract. The duration of the contract was indeterminate. The contract could however be brought to an end unilaterally by either party serving a Notice of Termination of Service upon the other. The minimum period of such notice was, at the material time, one month. The other term of relevance is one that empowered the Council to determine the contract on the grounds of gross misconduct; but this was subject to Disciplinary Rules a copy of which was appended to the contract of service. The Rules provided inter alia for an inquiry at which the Appellant was entitled to appear and be represented.
It is against this background that the actions of the Council and of the Appellant must be judged applying the ordinary rules of construction. The first question which falls to be considered is: what was the true effect of the letter written by the Council to the Plaintiff dated 29th October 1991? Whatever may have been the subjective intention for the Council as disclosed in the minutes of the meeting at which the sending of the letters was authorised, the true effect of the letter must be determined by construing its terms in the existing factual matrix. These have been described in the judgments already delivered. The letter disclosed on the part of the Council a firm and settled intention, albeit possibly for the wrong reason, to cease paying the Appellant his salary as an employee under suspension and thenceforth to treat the contract of service as determined. The point made in the letter that the contract had been frustrated by the imposition of conditions on the bail upon which the appellant had been released from custody pending criminal proceeding against him is no longer relied upon by Miss Williams who has appeared for the Council. The point has therefore not been fully argued. Whether the point was a good or false one is, however, nothing to the point of this appeal. The Council now accept that by their letter of the 29th October 1991 they were in breach of the terms of the contract of service -- that is they were guilty of an act of wrongful dismissal. They accept that accordingly they are liable to pay appropriate damages in these circumstances.
The Appellant however contends that the letter of the 29th October 1991 was not effective to bring the contract to an end, although he accepted that he had received the letter. He says that the basis of the letter, namely frustration, was misconceived. He continued to make himself available to discharge his obligations under the contract. He had arranged for the condition of bail to be varied to provide that the Council could permit him to contact former fellow employees and to visit the Council's premises. He claims that accordingly the contract of employment was not brought to an end by the letter of the 29th October and that therefore he is entitled to his salary to the time that he accepted the Council's repudiation of the contract. This he states took place at the trial before Judge James. Notwithstanding this the Appellant now claims damages for wrongful dismissal on the basis that he would have continued in employment more or less for the rest of his working life. (See the summary of his claims in the judgment of Ralph Gibson LJ). A claim of this magnitude offends against common sense and reason, when it is to be remembered that the whole engagement could be brought to a conclusion on one month's notice on either side. How does the Appellant's claim square with the damages reasonably to be expected to flow from the breach?
I agree that we are bound, as was the judge, by the rationes decidendi in the majority judgments in Gunton v. Richmond-upon-Thames London Borough Council (1981) Ch.448. In the particular circumstances of this case, I should have reached very much the same conclusion in any event. Starting from the principle that contracts for the provision of personal services, whether in the normal master and servant sense or for the provision of professional expertise in the context of personal employment, should normally be subject to the ordinary rules of contract, it is clearly desirable that exceptions should be limited as strictly as possible so long as the result accords with convenience and common sense. The central question which arises in this appeal is whether an exception should be recognised in cases of wrongful dismissal of the employee by the employer. Immediately it should be noted that there is already in existence an important exception well embedded in the common law, namely that the Courts will not grant a decree of specific performance in the case of contract for personal service. If the Courts were to recognise for the purposes of permitting an employee whose contract of service has been wrongfully repudiated by the employer to sue in debt for the wages which he would have earned more or less ad infinitum, this would be little different to achieving a decree of specific employment by the back door without the obligation of having to provide the service. With respect to the approach of Lord Oliver of Aylmerton in the case of Rigby v. Ferodo Ltd (1988) ICR 29, I would not find it necessary to rely on a fiction of assent by the wronged employee in order to dispense with the contract to pay wages. I would prefer to rely on an exception in those cases where the employer by unequivocal and unilateral action, repudiates his obligations under the contract in a manner in which his decision is brought to the attention of the servant, then the exception should apply and it would not be open to the employee to reject the repudiation. His duty to mitigate his loss would involve of necessity the immediate recognition of the employer's repudiation. In this I would respectively not merely not follow that, but also agree with the judgment of Buckley LJ in Gunton's case. In other circumstances this would involve interfering with the order of the Judge below; but as has already been explained by Ralph Gibson LJ, the Council do not rely on this argument on this appeal because of a concession already made.
Apart from this, for the reasons given in the Judgment of Ralph Gibson LJ, I would dismiss the cross-appeal and also dismiss the appeal.
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No order as to costs.
