Appeal No.	 EAT/943/98

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On  1 May 1999

Before
HIS HONOUR JUDGE PETER CLARK
MR D A C LAMBERT
MRS R A VICKERS

MMD (SHIPPING SERVICES) LTD	APPELLANTS

MR D L PHILPOTT	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellants	MRS G LEACH
(SOLICITOR)
Messrs Blake Lapthorn
1 Barnes Wallis Road
Segensworth
Fareham
Hampshire PO15 5UA	
For the Respondent	MR G WATSON
(OF COUNSEL)
(Instructed by)
Messrs Warner Goodman & Street
Commercial Chambers
1 Portland Street
Fareham
Hampshire
PO16 0UJ	

	JUDGE PETER CLARK:	This is an appeal by the Respondent’s Employer before the Southampton Employment Tribunal against the decision of the Chairman, Mr D N Cowling, sitting alone on 1st June 1998, that the Applicant’s claims of unfair dismissal and disability discrimination were brought in time.  That decision with extended reasons was promulgated on 5th June 1998.

	Background
	The Applicant was a long-standing employee who had commenced a period of continuous service with the Respondent on 10th December 1960.  He held a position of Foreman Stevedore.  During 1997 he was off work following an operation on his left elbow.  Medical opinion was taken on his fitness for work.  Matters came to a head at a meeting held on 3rd December 1997 attended by the Applicant and on the management side, by Mr Nicolas Gibson, the General Manager and Mrs Janet Martin.  It was common ground that the Applicant was orally dismissed at that meeting.  

	On 8th December 1997 Mr Gibson wrote a letter to the Applicant which the Applicant said he did not receive.  It purported to confirm what was discussed at the meeting.  The relevant paragraph of the letter read:

“It was regrettably therefore agreed that we should terminate your employment with MMD on the grounds of ill health with effect from December 3rd 1997, with a payment of 12 weeks lieu of notice.”

	The Applicant appealed against the decision to dismiss him.  That appeal was heard on 16th January 1998 and the dismissal was upheld.  However, the Respondent agreed to commission an expert report to explore the possibility of the Applicant returning to work.  A copy of the report once received was sent to the Applicant in April and a further meeting followed.  On 17th April 1998, he presented his Originating Application to the Employment Tribunal.  On 5th May the Respondent wrote to the Applicant expressing the view that the report confirmed the Respondent’s decision that a return to work as a manual foreman/supervisor would put his well-being at risk.

	Limitation
	Section 111(2) of the Employment Rights Act 1996 provides that a complaint of unfair dismissal must be presented to an Employment Tribunal before the end of a period of 3 months beginning with the effective date of termination (EDT) subject to the reasonable practicability proviso.  By Schedule 3 para 3 to the Disability Discrimination Act 1995, a complaint under that Act must be presented before the end of a period of 3 months beginning when the act complained of was done, subject to an extension of time where it is just inequitable to do so.  

	EDT.  Section 97(1) of the 1996 Act provides:

“1.	Subject to the following provisions of this Section, in this part the effective date of termination
	(a)	In relation to an employee whose contract of employment is terminated by notice, whether given by his employer or by the employee, means the date on which the notice expires;
	(b)	In relation to an employee whose contract of employment is terminated without notice, means the date on which the termination takes effect.

	Difficulty has arisen over the effect of a payment in lieu of notice.  As the Chairman observed at para 10 of his Reasons, two possibilities may arise.  The first is where the employment is summarily terminated with a payment in lieu of notice.  Here the EDT is the date of summary dismissal.  See Dedman -v- British Building & Engineering Appliances Ltd [1974] ICR 53; Robert Cort & Son Ltd -v- Charman [1981] ICR 816.  The second is where the employee is dismissed on notice but is not required to work out that notice.  Here, even although the notice period payment is paid in a lump sum the EDT will be the end of the notice period, not the date on which notice is given.  See Adams -v- GKN Sankey Ltd [1980] IRLR 416; Chapman -v- Letherby & Christopher Ltd [1981] IRLR 440.

	However, in each of those cases dismissal was effected by letter received by the employee.  The task for the Tribunal in those cases was one of construction of the words of the letter of dismissal.  That construction in the event of ambiguity being resolved in favour of the employee and against the employer.  See Chapman. 

	On the facts of the present case we draw particular attention to Leech -v- Preston Borough Council [1985] ICR 193.  There, the applicant was orally dismissed following a disciplinary hearing held on 3rd March 1983.  On 4th March the Respondent wrote confirming the dismissal and stating that the applicant was entitled to 7 weeks notice, but that arrangements were being made for him to be “paid in lieu of notice”.  The applicant presented his complaint of unfair dismissal on 11th July 1983.  The issues was whether his complaint was in time.  If the EDT was 7 weeks after 3rd March it was; if the 3rd March it was not.  The Employment Tribunal decided that question solely on a construction of the letter of 4th March, without reference to what was said and understood at the disciplinary hearing on 3rd March, when the oral dismissal took place.  The Employment Tribunal found that on the basis of the letter the dismissal took immediate effect and the complaint was out of time.  It was dismissed.

	On the applicant’s appeal the Employment Appeal Tribunal (Mr Justice Waite presiding) allowed the appeal and remitted the case for rehearing so that the Employment Tribunal could make findings of fact as to what happened at the disciplinary hearing and then considered the overall picture presented by the words spoken at the meeting and the confirmatory language of the letter of 4th March.

	The act complained of
	We respectfully agree with the Chairman, by reference to similar wording in the earlier sex and race discrimination legislation, that where the act of discrimination complained of is dismissal by reason of here disability, time runs from the date on which the applicant finds himself out of a job, not when the notice is given.  Lupetti -v- Wrens Old House Ltd [1984] ICR 348.  Thus, the question is the same as under the 1996 Act; what was the effective date of termination of the contract?

	The Chairman’s approach
	The Respondent did not call any oral evidence below, particularly as to the meeting held on 3rd December 1997.  The only oral evidence came from the Applicant, who said he was unwell and had difficulty recalling the detail of that meeting.  The Chairman’s findings of fact relating to that meeting are set out at para 5 of his Reasons thus:

“5.	The Applicant was employed by the Respondent as a Foreman Stevedore.  During 1997 the Applicant was absent from work for an extended period following an operation on his left elbow.  On 3rd December 1997 the Applicant was called to a meeting.  The Respondent company was represented by Mrs Janet Martin and Mr Nicolas Gibson, the General Manager.  The Applicant was not represented.  He was unwell at the time, suffering from a cold or ‘flu which may have been pleurisy.  As a result the Applicant has difficulties in recalling the full details of the meeting.  
	The Responded was aware that the Applicant was feeling unwell at the meeting.  The Applicant does recall a discussion concerning his medical condition and the prospects of him returning to work in the light of medical reports.  He recalls the Company expressing concern that the Applicant would be exposing himself to risk of injury were he to return to work and the decision by the Respondent not to take that chance.  He was given a cheque for 12 weeks’ pay in lieu of notice.”

	Next, the Chairman recorded the fact that he was given a cheque for 12 weeks’ pay in lieu of notice.  Next, the Chairman recorded the fact that the Applicant denied having received the letter of 8th December, but made no express finding as to whether or not he accepted that denial.  We are told by Mrs Leach that it was not suggested on behalf of the Respondent below that the Applicant had received the letter.  

	Finally, the Chairman appears to have resolved the issue before him solely by reference to the wording of the 8th December letter.  He concluded that the wording, which we have earlier set out, amounted to dismissal on 12 weeks notice effective on 25th February 1998, without requiring the Applicant’s attendance at work.  His reasoning for reaching that conclusion is set out at paragraph 12 of his Reasons.  It followed, applying the principle in Lupetti, that both the claim of unfair dismissal and disability discrimination were made within the 3 month primary limitation period and the matter was allowed to proceed.

	The Appeal
	Mrs Leach, on behalf of the Respondent Employer, takes two points.  First, she submits that the cases of Adams, Chapman and Leach are inconsistent with the Court of Appeal decision in Dedman.  She argues that whenever payment in lieu of notice is made that involves instant dismissal.  We think that proposition is too broad and we reject it.  On the facts of Chapman and Adams the wording of the dismissal letter was capable of being the meaning that dismissal was on notice, but with no requirement to work out the notice period.  There is no particular magic in those circumstances, of the notice period pay being paid in a lump sum.  As Mr Justice Waite pointed our in  Leech, the expression “payment in lieu of notice” is grammatically inaccurate if describing a lump sum payment of wages due during the notice period.  (Leech 196 E-G).

	Her second point has greater force.  She submits that on a proper construction of the letter of 8th December 1997, the words connote instant dismissal with 12 weeks pay in lieu of notice in the correct sense of the expression, that is, liquidated damages for breach of contract where no notice is given.  

	Mr Watson contends that the Chairman’s construction is correct.  We make no ruling on that issue for this reason.  Mr Watson advances an alternative argument by way of cross-appeal.  He submits that even if the Chairman’s construction of the letter is correct, he has asked himself the wrong question.  The position in this case is that the letter of 8th December 1997 is not a letter of dismissal.  It is the Employer’s version of what transpire at the meeting of 3rd December at which the dismissal took place.  Further, the Applicant said, and this was not challenged, that he did not receive the letter.  Yet further, we observe, the Respondent did not call Mr Gibson, we are told following an indication by the Chairman, to say what happened at the meeting on 3rd December, or that the letter confirmed what had then been said.

	We find the point raised in the cross-appeal compelling.  Following Leech, it is necessary for the Employment Tribunal to determine not only what was said at the meeting, but what was the Applicant’s understanding of the position, bearing in mind his illness at the time and the fact, apparently accepted, that he did not receive the letter of 8th December.  The fact that that letter was sent by Mr Gibson may be of evidential value when considering (a) what was actually said at the meeting; and (b) the credibility of the Respondent’s evidence as to what was there said.  However, it cannot of itself determine the question of what was the Applicant’s understand as to his position at the end of that meeting.

	These are all evidential questions which we cannot resolve.  In these circumstances, we have concluded that the proper course is to make no order on the appeal, but to allow the cross-appeal and direct that the matter be remitted to a fresh Employment Tribunal for rehearing.  That Tribunal should consist of a full panel of three members.  It will be for the next Employment Tribunal to determine what the Applicant understood to be his position, instant dismissal or dismissal on 12 weeks notice, following the meeting, in the light of the facts made known to him at the time.  If it be found that he was instantly dismissed, it will be necessary to consider the “escape clauses” of reasonable practicability and of the just and equitable ground.  If it is found to have been a dismissal on notice, the matter will then proceed to a full merits hearing.