Appeal No.	EAT/1098/00

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 12 March 2001

Before
MISS RECORDER SLADE QC
MR T C THOMAS CBE
MR R THOMSON

PENDRAGON PLC T/A GRANTHAM FORD	APPELLANT

MS V BRYANT	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR G PRICHARD
(of Counsel)
Instructed By:
Retail Motor Industry Federation
Legal Dept
201 Great Portland Street
London W1N 6AB	
For the Respondent	NO APPEARANCE OR
REPRESENTATION
BY OR ON BEHALF OF
THE RESPONDENT	

MISS RECORDER SLADE QC:	

1	This is an appeal from the decision of an Employment Tribunal on a preliminary point.  The Employment Tribunal held that a complaint for unfair dismissal had been presented in time.  

2	The issue before the Employment Tribunal was this.  The Originating Application was presented on 23 February 2000.  The Applicant before the Tribunal, the Respondent before us, stated that her employment came to an end on 3 February 2000 and therefore her application was in time.

3	The Respondent before the Tribunal, the Appellant before us, contended that the effective date of termination of her employment was 8 November 1999 and therefore her Originating Application was presented out of time.

4	It was not contended before the Employment Tribunal that if the application was presented out of time, time should be extended because it was not reasonably practicable to present it within time.

5	Mr Guy Prichard of Counsel appears on behalf of the Appellant.  There is no appearance on behalf of Ms Bryant, the Respondent to this appeal, her instructing Solicitors having indicated they are content for the matter to be decided on the information we have on the papers before us.  The relevant facts may be briefly stated as follows.

6	Mrs Bryant was employed as a service manager by her employers who operate a network of car dealerships.  Her contract provided that her contractual entitlement to notice was the statutory minimum period of notice and it was also stated in her contract that:

“The company reserves its right to pay a sum in lieu of notice”

7	Mrs Bryant was dismissed by a letter dated 8 November 2000.  In that letter her employers wrote:

“It is with regret that we must terminate your employment with immediate effect on the grounds of redundancy.
You are entitled to 12 weeks notice, for which payment will be made at the relevant net rate in lieu of your working.”

8	Mrs Bryant was then sent a P45 showing her leaving date as being 8 November 1999.  She was allowed to continue to use the car which she had been provided by her employers and that was retained by her until she returned it on 8 February 2000.

9	The Employment Tribunal referred to the Employment Rights Act 1996, Section 111(2) which contains the requirement that a complaint of unfair dismissal must be presented to the Tribunal “before the end of the period of three months beginning with the effective date of termination”.  The Tribunal also directed itself to Section 97 of the Employment Rights Act which defines the effective date of termination as:

“(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.

The Tribunal also referred to Section 86(3) of the Employment Rights Act which provides that:

“(3)		Any provision for shorter notice in any contract of employment with a person who has been continuously employed for one month or more has effect [subject to the statutory minimum periods of notice]; but this section [86] does not prevent either party from waiving his right to notice on any occasion or from accepting a payment in lieu of notice.”

10	In coming to its decision the Employment Tribunal found that there was no waiver of the entitlement to statutory minimum period of notice by Ms Bryant.  The Tribunal also referred to “our experience” in which:

“terminations in circumstances such as this may operate in either of two ways:
(1) Termination with immediate effect and payment of a sum of money in lieu of notice in which the contract comes to an end typically on the last day of working or
(2) ‘Garden leave’ where the employment is terminated but that date is set ahead and in the meantime the employee is not required to work but nevertheless technically remains an employee until that future date.”

11	The Tribunal in paragraph 18 of its decision considered that the letter of 8 November 1999 had an element of confusion about it.  In the context, bearing in mind “that the burden is upon the employer to establish its meaning” it concluded that “in lieu of your working” carried the interpretation of garden leave.  Accordingly it held that the effective date of termination was 12 weeks from 8 November which it concluded was 3 February 2000.

12	In our view the Employment Tribunal fell into an error in its construction of the letter of termination, which is the primary point taken by Mr Prichard on behalf of the Appellant.  Mr Prichard contends that the Employment Tribunal erred in law in its construction of the letter.  Further, he contends that the Employment Tribunal erred in concluding that there was no waiver of the entitlement to statutory minimum period of notice by Ms Bryant.  Further, he contends that the Tribunal’s conclusion that the result of the letter was to place Ms Bryant on garden leave was perverse, but his arguments were primarily directed to the error of law in the construction of the letter of 8 November 1999.

13	Turning first to the construction of the letter of 8 November 1999, the plain and ordinary meaning of the phrase in the letter “We must terminate your employment with immediate effect” is that employment is to come to an end immediately.  That proposition is simple and does not require authority or elaboration.  However, our attention has been drawn to the case of T & K Home Improvements Ltd v Skilton [2000] IRLR 595.  That case in the Court of Appeal was concerned with the meaning of the term “dismissed with immediate effect” for rather different purposes than that with which we are concerned.  However, Pill LJ at page 597, paragraph 19 of the expression “dismissed with immediate effect” observed:

“It of course means that the contract terminates as of that moment.”

14	We agree and make the same observations in relation to the use of that term in the context of this appeal.  In our view the sentence which followed, namely that which states:

“You are entitled to 12 weeks notice, for which payment will be made at the relevant net rate in lieu of your working” 

does not detract from the plain statement that the employment was to terminate with immediate effect.  Whilst the phrase “in lieu of your working” is perhaps somewhat less usual than the phrase “in lieu of notice” nonetheless, in our view the meaning is plain.

15	So far as the attack on the Tribunal’s conclusion that there was no waiver by Ms Bryant of her entitlement to receive the statutory minimum period of notice, in the light of the terms of the contract of employment that the company reserves its right to pay a sum in lieu of notice, the observation of the Tribunal cannot stand and is perverse.

16	So far as the Tribunal’s finding that from 8 November until 3 February 2000 Ms Bryant was on garden leave is concerned, our attention has been drawn by Mr Prichard to the well known case of Delaney v Staples [1992] ICR 483 and also to Cerberus Software Ltd v Rowley in the Employment Appeal Tribunal [1999] IRLR 690, which we are told was overturned on appeal but not in respect of the passage upon which Mr Prichard relies.  That passage appears at page 692, in which Morison P observed at paragraph 13:

“It is our experience that no employer would want to make a one-off payment in advance of garden leave; on the contrary, the employer will wish to make monthly payments of wages in exactly the same way as when, and as if, the employee was working.  We find it difficult to understand, in any event, how a payment would be expressed to be ‘in lieu of notice’ when notice was given and the employee was still employed.”

17	We respectfully agree with the observations there made by Morison P.  In this case it is plain that the Applicant (the Respondent before us) was to be made a payment in lieu of her working.  For the reasons which we have expressed earlier in this judgment, the plain intention of the letter of 8 November was to terminate her employment with effect from that date.  There was no basis for concluding that that date marked the beginning of a period of garden leave.

18	Accordingly, we allow this appeal.  Since we conclude that on the material before the Tribunal and, particularly on the proper construction of the letter of 8 November 1999, no Employment Tribunal, properly directing itself, could come to a conclusion other than that the effective date of termination was 8 November 1999, we substitute a decision that the effective date of termination was indeed 8 November 1999.

19	Since it was not contended on behalf of Ms Bryant that it was not reasonably practicable to present her claim within three months of that date, the consequence of that conclusion is that her Originating Application claiming unfair dismissal was presented out of the time limited for doing so and accordingly must be dismissed.