Appeal No. EAT/1384/01/MAA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 18 November 2002

Before
THE HONOURABLE MR JUSTICE ELIAS
MR N D WILLIS
MISS S M WILSON

MISS L K SHELTON	APPELLANT

FULL HOUSE RESTAURANTS LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR R O’DAIR
Free Representation Unit
Peer House
4th Floor
8-14 Verulam Street
London
WC1X 8LZ	
For the Respondent	MR M WEST
(Advocacy Manager)
Instructed by:
Peninsula Business Services Ltd
Riverside
New Bailey Street
Manchester
M3 5PB	

MR JUSTICE ELIAS

1.	The Appellant took proceedings for unfair dismissal and breach of contract.  It is a relatively unusual case in that she was claiming that she had been dismissed notwithstanding that she in fact was still employed by the Respondent when she initiated her Tribunal claim.  However, she relied upon the case of Hogg v Dover College [1990] ICR 39 and other later authorities following that decision to support a contention that she had been dismissed by her employer.

2.	It was necessary to establish a dismissal in order to give the Tribunal jurisdiction over the unfair dismissal and breach of contract claims.  In order to substantiate her claim it was necessary to show that the employers had been in breach of contract.  In this case she alleged that they were in breach by unilaterally reducing her hours of work from that which she was contractedly entitled to receive.  She alleged that the employer was contractually bound to provide her with an average of thirty hours work per week, that being an implied term of the contract.  It is common ground that there is no express term to that effect.

3.	The employer denied that this was a term of the contract.  The Tribunal found in the employer’s favour and dismissed her claims.  She now appeals to this Tribunal.  The question we have to determine is whether the Tribunal erred in law in refusing to imply the term relied upon.  We focussed on that question but we add that even if it were established that there was this contractual term and a breach of that term, it is far from clear on the facts of this case that the principle in Hogg v Dover College would apply.  However, if the term does exist then that would be a matter which would have to be argued on another occasion.  

The Facts
4.	We summarise the facts as found by the Industrial Tribunal.  The Respondent operates a number of pizza restaurants.  The Applicant commenced employment in November 1998 at the Leatherhead restaurant.  She filled in an application form stating the number of hours per week that she would like to work and which days she wished to work.  Her job was Delivery Driver.  She received no written contract or statement of terms and conditions of employment.

5.	Prior to the Applicant’s sickness absence in August/September 2000, she worked an average of thirty hours a week.  The hours worked were stated on a weekly rota, drawn-up by the Manager after considering the availability of all staff who carried out this particular work.  In about August 2000 the Applicant began to experience stomach pains and she was away intermittently for various periods between 21 August and 28 September.  On each occasion she notified the Respondent of her illness.  She was then off work for two weeks from 9 October and received statutory sick pay.  When she returned to work she was only given one shift that week having been told that the rota had already been done.  In the subsequent weeks she was only given work for periods which were significantly lower than the thirty hours average that she had been allocated prior to her illness.  She was offered forty hours at the Respondent’s restaurant in Weybridge but rejected that because it was too far to travel.

6.	Over the period from her return to work until the beginning of the new year, her hours gradually increased and by the beginning of 2001 she was again working an average of thirty hours a week.  On 22 January 2001 she commenced proceedings in the Employment Tribunal.  In March 2001 she was in fact issued with written terms and conditions of employment.  That particular document does not identify any specific hours of work because the relevant paragraph was left blank, but it is perhaps pertinent to note that the paragraph in the standard statement of main terms and conditions is as follows:

“HOURS OF WORK
Your hours of work are an average of       per week, business hours are from 12.00 pm to 1.00 am Monday to Sunday and you are required to work shifts as rostered according to the needs of the business.  This will involve working day and evenings and at weekends.”

7.	The Tribunal also found that the Applicant had been reluctant to work late evenings because of a previous blackout, and that when she returned in late October it was at least the Respondent’s understanding that she only wanted to work reduced hours ‘in the first instance’.  On the basis of these facts the Applicant contended that she was entitled to be given an average of thirty hours work per week.  The Tribunal rejected this submission.  They concluded as follows:

“The Applicant was an employee and the Tribunal is of the view that she was given work as and when it was available.  She was a reliable employee able and willing to do at least thirty hours per week, and accordingly that is the work that she was given to do.  The Tribunal does not find that it is necessary to imply a term that she was entitled to work a minimum of thirty hours on average each week, or sixty hours on average each two weeks.  The Tribunal in coming to that decision considered what had been agreed at the outset, looked at how the relationship operated in practice and had difficulty considering over what period any average should be calculated.”

8.	Having rejected implication of such a term, the Tribunal concluded that the Applicant was not dismissed at the end of October when her hours were reduced following her return to work.  On the same basis they concluded that there was no breach of contract.

9.	Mr O’Dair, who represented the Applicant below and made submissions on her behalf before us, contended that the Tribunal had erred and that they ought to have found that there was a contractual obligation to provide on average thirty hours per week.  He relied in particular on the fact that the Appellant did in fact work for thirty hours per week, save in respect of the period in which she alleges the employer was in breach of contract.  He also relied upon the statement of main terms to which we have made reference and submitted that although the hours of work in that particular document were left blank, it does demonstrate that the employers were in principle willing to agree a contractual terms with an average number of hours per week as the required contractual obligation.  

10.	Before examining Mr O’Dair’s submissions in more detail it is necessary, we think, to identify certain problems which arise if the employer’s obligation is of this nature.  The figure of thirty hours was, as Mr O’Dair says, chosen because as we have indicated, that was indeed the average hours worked both, prior to the absence and when there was re-continuation of the prior position from the beginning of 2001.  However, the fact that an employee works on average a certain number of hours cannot of itself demonstrate that the employer is obliged to provide her with work for that number of hours.  Ever since the philosopher David Hume, it has been clear that one cannot derive an “ought” from an “is”.  The average hours will vary in circumstances where, as here, there is a variation of work done week by week.  At the end of one period, say after twenty six weeks, it may be that the average is twenty-nine hours, at the end of, say, a year it may be thirty-one hours.  The logic of the argument is that the specific term varies depending upon what happens in practice so that the duty would be to provide, in the example we have given, twenty-nine weeks up to one period and thirty up to the later period.  

11.	Mr O’Dair submits that you must look at the average as at the time when the contract is in fact alleged to have been terminated.  But in truth this is a case, it seems to us, of the employee seeking to pull herself up by her own boots’ straps.  The employee has always necessarily worked the hours actually worked and the average of those hours.  But in order to demonstrate that the employer is obliged to provide those hours, it is necessary to point to a source of these obligations independently of what happens in practice.  We accept that the evidence of what happens in practice might in an appropriate case be some confirmation of a contractual term which can be derived from other considerations, but in our view it is not possible to derive the obligation in this case to work thirty hours per week simply from the fact that that was the average hours worked in practice.  

12.	What in truth has been done here is to say that ignoring the weeks in respect of which there is a dispute as to whether the employer comply with a contract or not, the contractual term is that the employer is obliged to provide the work on average which he has actually provided.  But to say that he is obliged in law to do something because that is what he has in fact done is meaningless.  We also note that it is extremely difficult to identify a breach whenever a term is to provide so many hours week on average without identifying the relevant period.  For example, assume that the term is to provide an average of 30 hours a week.  It may be that after six months the employee has on average worked twenty-nine hours a week.  Could it then be said by the employee that there is a breach of contract or could the employer say that in any event he is intending to increase the number of hours over the next few months so as to ensure that it would come back up to an average of thirty hours?  No doubt there may be circumstances where it would be wholly unreal for one reason or another to believe that the employer could do that.  But short of that, it seems to us very difficult to identify when there will have been a breach of contract by the employer in such a case.  So in our view there are various difficulties about the formulation of the term of the kind relied upon by Mr O’Dair.

13.	We now look more specifically at the way in which he puts his case.  First, he submits that the parties accepted that there was a contract of employment in existence and that is not disputed by Mr West for the Respondent.  He then says, following the decision of the House of Lords in Carmichael v National Power Plc [1999] ICR 1226, that it is plain that in order for a contract to be in existence there has to be a mutuality of obligations.  That requires that the employee must have an obligation to work and the employer must be under an obligation to provide work.  That obligation to provide work must, he submits, be an obligation to provide a minimum number of hours.  In this particular case the only number that could fairly be selected was that which reflected how the parties actually performed the contract.  

13.	In our view the error in this analysis is to presuppose that the obligation must be to provide some minimum number of hours of work as such.  We think in fact in this case - although it is right to say that we have heard no argument specifically on the point - that a court will have no difficulty in finding consistently with the general duty of trust and confidence in the employment relationship that in allocating work as between the employees, the employer had to act in good faith and fairly at least in the sense that there should be no capricious or arbitrary allocation of work or no refusal to allocate work for a discriminatory or unjust reason.

14.	The duty to allocate such work as exists fairly would of course satisfy the obligation.  The requirement to provide mutuality is set out in the Carmichael case.  It may be that on the facts of this case the employer would be held to have acted in breach of a term of that nature.  We do not suggest for a moment that he would, but simply that we have no evidence to indicate one way or the another.  There may have been good reasons for the reduction in the hours.  It may be that it was because there had been some variation of contract reflecting the fact that following her illness the Applicant did not want to work late at night, and for a period wished to have her hours reduced.  

15.	Then Mr O’Dair submitted that we ought to imply the term of an average of thirty hours on this alternative basis.  He submitted that there had to be a term about the hours of work that would be performed and that there is authority to the effect that in those circumstances, where some term has to be implied, the courts will infer such term as would reasonably have been agreed between the parties.  He referred us to the case of Courtaulds Ltd v Sibson [1988] ICR 451.  In that case the question was the scope of a mobility clause in the contract of employment.  In the course of giving judgment Slade LJ said this at page 460 G-H:

“Thus in cases such as at present where it is essential to imply some terms of the contract of employment to the place of work the court does not have to be satisfied that the parties if asked would in fact have agreed the term before entering into the contract. 

The court nearly has to be satisfied that the implied term is one which the parties would probably have agreed if there were being reasonable.  See also Hammond and Son v Blythe [1983] ICR 416-420 per Browne-Wilkinson J.”

16.	We accept that there would need to be some understanding of some term relating to the hours of work which would need to be provided by the employer, but we are not able to say that those hours would necessarily be thirty.  Why not twenty-eight or thirty-two?  In truth again we consider that if one were testing what would reasonably have been agreed between the parties in the absence of some expressed stipulation of specific hours, it would be along the lines we have already indicated, namely that there would be an allocation of such work as is available to be divided between those workers doing such work on a fair and equitable basis.  That would more neatly reflect the likely undertaking of an employer, at least in circumstances where there may be a fluctuating workload and perhaps where the number of employees available to do the work will vary from time to time.

17.	Thirdly, Mr O’Dair says the Tribunal has failed to make a material finding of fact.  He referred us to a number of cases where the courts have emphasised the importance of Tribunals being obliged to make determinations on significant matters of fact such as Levy v Marrable Ltd [1984] ICR 583 and High Table Ltd v Horst [1997] IRLR 513 at para 24 per Peter Gibson LJ.  He refers to the fact that in the evidence before the Tribunal the employee had said this:

“I was not given the written contract of employment until much later but I understood that I was expected to be available to work thirty hours that I would in turn be given on average thirty hours a week.”

18.	Mr O’Dair submits that this shows that one of the contentions of the employee was that she would need to be available to work for thirty hours but the Tribunal made no finding about it.  He then says that it would be a reasonable implication that the employer would likewise be obliged to provide her with thirty hours a week in those circumstances.  

19.	In our view if one looks at that short passage in her witness statement, it in truth appears to be saying no more than that she understood that there was a term of the contract that she would be provided on average with thirty hours a week.  She was contending that would be available to do the work and the employer ought to be obliged to give it, and that is the very issue the Tribunal considered.  If and in so far as she was saying something different, namely that she would be available to work thirty hours but that it was not clear how much work the employer would have to provide, and that would be something to be determined, then if anything it is a fact against her.  If a point is being made that she should be available to work thirty hours rather than be given thirty hours of work, then the implication would normally be that that is because her obligation to be available is not correlative with the obligation of the employer to provide her with the same number of hours.  But be that as it may, we are satisfied that in the circumstance of this case it cannot fairly be said that the Tribunal was required reasonably to reach a conclusion about that in order to answer the particular question with which they were faced.

20.	Accordingly, notwithstanding Mr O’Dair’s careful submissions, we consider that there is no basis for saying the Tribunal erred in law in this case.  We would, however, simply record the fact that, like the Industrial Tribunal, we have with some reluctance reached this conclusion.  The employers were in breach of their obligation to provide a statement of terms and conditions of employment and it may be that had they done so it would have resolved the matter, and possibly the term at that stage would have been one closer to that on which the employee now relies.  We simply cannot tell one way or another.  But as we have indicated, the absence of an obligation to provide thirty hours a week does not in our view mean that there was no obligation on the employer at all.  There would in our view have been an obligation on the employer not to act capriciously and in good faith in the allocation of work and in that sense to have acted fairly.  Indeed we understand that it was principally the employee’s grievance that she had been deprived of work for an unfair and discriminatory reason.  Whether that was capable of being sustained on the evidence we are not in a position to say, and it would be wrong for us to pass any comment on it.