Appeal No. EAT/0158/03 DM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 13 August 2003

Before
HIS HONOUR JUDGE J MCMULLEN QC
MS K BILGAN
MR B V FITZGERALD

MR S G PEARSON	APPELLANT

HALESOWEN COLLEGE	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR S G PEARSON
(the Appellant in Person)	
For the Respondent	MR R M SHEPPARD
(Employee Relations Executive)
Management and Personnel Service
St James House
Frederick Road
Edgbaston
Birmingham B15 1JJ	

HIS HONOUR JUDGE J McMULLEN QC

1	This case is about compensation for unfair dismissal when a dismissal would occur fairly after a finite period of time; and the principles for breach of contract.  The judgment represents the views of all three members who have pre-read the relevant papers and additional papers presented to us today.  We will refer to the parties as Applicant and Respondent.

Introduction

2	It is an appeal by the Applicant in those proceedings against a reserved decision of an Employment Tribunal sitting on 15 days spread over 7 months in 2002 at Birmingham, Chairman Mr D W Crump.  It was registered with Extended Reasons which appear to be dated 6 July 2003, but we are told that the decision was in fact sent on 6 February 2003.  The reasons extend over 53 pages.  As before us, the Applicant represented himself and the Respondent was represented by Mr Sheppard of the EEF West Midlands.

3	The case had been remitted to it by the EAT, Judge Colin Smith QC and members, on 2 February 2002.  As will become clear, the remission was narrowly defined.  The case could not be heard by the same members but the Chairman, and Mrs Renton were at both hearings.

4	The Applicant claimed unfair dismissal and breach of contract of employment.  The Respondent denied that the Applicant had been dismissed unfairly.  It contended it operated a fair procedure and it denied the Applicant’s claims of breach of contract.

5	The essential issue, as defined by the Employment Tribunal in paragraph 87, is as follows:

87	“In general the issue between the parties is this.  The applicant says he could not be required to undertake any work in excess of 30 hours a week by way of preparation, marking, and the like.  The College says that the applicant could be expected to undertake reasonable work at home or elsewhere to perform a proper professional job as a lecturer.”

That passage has not been substantially disputed by the Applicant today.  In addition, the Tribunal had to consider the extent to which compensation should be awarded, following the finding of unfair dismissal.

The Decision

6	The Employment Tribunal decided against the Applicant on all allegations of breach of contract of employment except for his claim in respect of payment for parents’ evenings and one training day.  The unfair dismissal claim upheld by the first Employment Tribunal was not challenged by the Respondent.

7	The Applicant appeals against the decision of the second Tribunal (which is the one before us today) on two grounds.  First, it is contended that the Tribunal erred in law in its approach to the breach of contract claims, particularly in respect of the calculation of the hours to be worked and payment therefor.  Secondly, the Tribunal erred in closing down the period of compensation and reassessing the compensation on precisely the same lines as the first Tribunal.

8	Directions sending this appeal to a full hearing were given by me in 2003 including further case management directions.
The Legislation

9	The relevant legislation are section 98 (4) of the Employment Rights Act 1996 which deals with fairness:

(4)	“Where the employer has fulfilled the requirements of subsection (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) –
(a)	depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and
(b)	shall be determined in accordance with equity and the substantial merits of the case.”

and section 118 which deals with the general principles for compensation.

10	The compensatory award is provided for by section 123 (1) which is as follows:

123	(1)	“Subject to the provisions of this section and sections 124 and 126, the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer.”

11	Breach of contract claims are regulated by the Employment Tribunal Extension of Jurisdiction (England & Wales) Order 1994 which gives jurisdiction up to a maximum figure for claims of breach of contract in certain circumstances.  The Tribunal had jurisdiction in this case.

12	The Tribunal directed itself in accordance with the foregoing statutory provisions and in with the relevant authorities which we hold to be Evans v Elementa Holdings Ltd [1982] ICR 323 EAT and Polkey v A E Dayton Services Ltd [1988] ICR 142.

The Procedural Background

13	The issues raised by the Applicant were extremely complicated for, as the EAT decided, it had considerable sympathy for it by reason of the sheer number of difficult issues which it had to deal with.  The EAT on remission to the ET specifically directed certain questions to be asked and answered by the ET since the EAT had held that its reasoning, in respect of the two principal issues which remain in our case, was inadequate.  In so doing, Judge Smith made it clear that the Applicant should make his claim in a straightforward document which could be replied to in similarly straightforward terms by the Respondent.  It was made clear that the pleaded claim must remain strictly within the confines of the claim as put forward in the Originating Application.

14	The Originating Application had been made in 1995 and it must be borne in mind across the mists of time that the appeal with which we are dealing relates to matters which occurred between 1992 and August 1995.  There have been substantial changes in the legislation and in the culture of employment relations since then.

15	The first Employment Tribunal, a copy of whose decision we have not seen in full but whose relevant passages have been extracted and read into the judgment of the EAT, decided that the Respondent unfairly dismissed the Applicant but capped his compensation because in due course he would have been dismissed fairly; it dismissed all his claims for breach of contract.

16	The Applicant had been employed by the Respondent as a lecturer in computing from 1986 until he was dismissed following proper notice on 31 August 1995.  The course of the relationship between the Respondent and the Applicant is one which betrays by the Applicant a considerable amount of distrust.  So it was that he brought proceedings against the college in the County Court complaining about the requirement, as he saw it, to carry out invigilation duties in 1994.  That claim was dismissed and an appeal to the circuit judge was subsequently withdrawn.  Thus the first Tribunal held that it could not deal with any matter relating to that as it had already been the subject of a judicial decision.

17	He brought proceedings on 16 February 1995 which led to a disciplinary hearing at the conclusion of which he was dismissed with effect from 31 August 1995.  The first Employment Tribunal found that the reason for the dismissal was the presentation of the Applicant’s complaint to the Employment Tribunal.  He had an internal disciplinary appeal which was dismissed.

18	Looked at now, that may seem a strange conclusion, but it must be borne in mind that the protection of an employee who has asserted a statutory right was introduced by the Trade Union Reform and Employment Rights Act 1993, came in on 1 January 1996 and now forms section 104 of the Employment Rights Act 1996.  No point has been taken about the decision of the first Employment Tribunal on unfair dismissal.

19	That Employment Tribunal awarded the Applicant a basic award of £4,510 and a compensatory award of £4,130, giving a total of £8,640.  Thus the Applicant succeeded in his claim. At the time compensation awards were capped was £11,000.

20	The criticism which was made of that decision related to its want of reasons in respect of the forward calculation of his losses, for it was decided that his losses would not continue beyond 31 December 1995; that is, he would have been fairly dismissed at that time had he not been unfairly dismissed in August.  The other criticism which found favour in the EAT was that the Tribunal had failed to set out its reasoning in respect of its decision to dismiss the breach of contract claims, and these were all remitted to the Employment Tribunal for it to hear again.

21	Specific directions were given as to how the Tribunal should approach the problem and the EAT therefore directed the following findings to be made:

(a)	what hours per week the Applicant could lawfully be required to work under his contract;

(b)	how many hours he had in fact worked;

(c)	assuming (b) exceeded (a), at what rate he should have been paid in relation to such extra contractual work and to make a comparison with what pay he actually received; further

(d)	whether the Applicant carried out such extra work voluntarily or under protest;

(e)	even if it was carried out voluntarily, whether such conduct amounted to a waiver or any breach of the contract.

In addition, there can be found clear directions as to how the Tribunal should approach the assessment of forward losses.
22	For reasons which we do not understand there has been a very substantial delay at all stages of this case, but we have made no enquiries nor have we heard complaints about the matter.  It clearly cannot be right in 2003 for the Applicant still to be unpaid the award which was made to him in 1996.  Indeed, when this came before me for directions I made it clear (and Mr Sheppard forthrightly accepted) that his client would pay forthwith the amount of unfair dismissal compensation which had been awarded and remained undisturbed since 1996, and such elements of the claim for which the Respondent was found liable by the second Tribunal for breach of contract in 2003.

23	It was with some chasteness that Mr Sheppard reported that his firm advice to his client had not been followed; but he assures us today that that matter is in hand and we will again make it clear, in the light of the Applicant’s complaints that he is substantially out of pocket in his pursuit of this case, that he should have had in his hand the full award of the 1996 Tribunal since 1996, with interest at the statutory rate.

24	That then explains the background to the delay and to the lengthy proceedings which have come before us.

The Tribunal Decision

25	The Tribunal set out the circumstances of this case in a way which we regard as conscientious and highly diligent, paying careful attention to the narrow remit which it was given by the EAT.  The architecture of the Tribunal decision is to set out the background to the case and how it came to be heard, to set out the Applicant’s claims for breach of contract and his arguments in respect of unfair dismissal, to make findings on both of those and to answer, finally, the questions posed by the EAT.
Breach of contract

26	At the heart of this case is the Applicant’s claim relating to his contract.  The Applicant was a member of NATFHE, the appropriate union for lecturers further and higher education.  During the early 1990s considerable change was introduced into this sector of education; as a result of which, the college was incorporated and set about new terms and conditions for its employees.  There is no doubt that there was substantial pressure from above (that is, at government level) for change to occur in this sector, as was made clear before the Employment Tribunal.  Lecturers in the college were regulated by what is known as the Silver Book; that is, the agreement of the National Joint Council in this sector.

27	The principal terms of a lecturer’s engagement include the following:

7	“THE LECTURER’S JOB
…
7.2	A lecturer may be required to undertake any of the duties characterised below:
(a)	Pedagogic Work
This category embraces all forms of pedagogic work, including class room teaching tutorial work and associated outreach work, residential and open and distance learning courses and student placements and will generally entail associated organisational/administrative work preparation and marking.  It is expected that these duties would entail appropriate student welfare and academic counselling responsibilities.
(b)	Staff Development
This category refers to the specific area of conduct of, and participation in, staff appraisal and in-service training based on an assessment of individual service needs.
…
9	THE WORKING WEEK AND CLASS CONTACT HOURS
9.1	A lecturer shall not be required to attend on more than ten sessions per week.
9.2	Normally the session for a lecturer should not exceed three hours an in no circumstances shall a lecturer be required to spend more than four hours in any one session.
9.3	A lecturer shall not be required to exceed a total of thirty hours on duty in any one week except in the circumstances outlined in paragraph 8.1 or in paragraph 9.8.
…
9.10	Lecturers shall not be required to undertake in excess of 21 hours a week class contact on average when calculated over the teaching year, subject to the following exceptions and to paragraph 9.11:-
(a)	For Senior Lecturers with significant management/supervisory responsibilities, the average class contact hours when calculated over the teaching year should not exceed 18 a week and should have regard to the extent of the non-teaching duties.
(Note: there may be additional provision for Senior Lecturers without significant management/supervisory responsibilities and with duties concentrated on teaching and allied activities; such Senior Lecturers shall not be required to undertake in excess of 21 hours a week class contact on average.
(b)	In the case of staff on the management salary spine some teaching duties will generally be required but the amounts will need to be determined in each case according to the management content of the post in question.
9.11	With effect from 1 September 1990, additional class contact hours in excess of the weekly average hours specified in paragraph 9.0 above [i.e. 21 hours except for Senior Lecturers with significant management/supervisory responsibilities] may be required by management subject to a limit of 2 hours per week which in aggregate should not exceed 20 hours in any term or equivalent period.  Such additional class contact hours shall be balanced by reductions in class contact time which can be required at other times of the year, in order to ensure that the weekly average class contact time required of the postholder does not exceed the limits laid down in paragraph 9.10.
…
10	ADDITIONAL CLASS CONTACT
10.1	Paragraphs 10.2 and 10.3 outline two broad categories within which a lecturer may voluntarily undertake additional duties.”

In addition, by local agreement, the provision at Clause 9.10 was changed from 21 to 20 hours.

28	The provision for averaging, as it is described in 9.10 was the subject of resistance by the Applicant at various stages but as we pointed out to him today as he repeatedly raised it, this has been the subject of a final judgment in the County Court and is the subject of a record by the Tribunal of his own acceptance of averaging in the Tribunal’s decision and therefore takes the matter no further.

29	The Tribunal set out the basis of the Applicant’s claims and they are aptly, and we think not too simply, described as a claim that he was not required to work more than 30 hours without additional pay.  However, that central claim was capable of being buried under about 22 separate claims, each of which required the Tribunal’s adjudication and each of those claims was broadly speaking made over a period of two or three years.

30	The Tribunal’s approach to what the EAT had described as a very difficult problem and had tried to simplify was to take each year and examine each of the claims.  

(a)	As to the year 1992/1993 the Tribunal found that neither the Applicant nor the college was able to produce the timetable and the Tribunal made no findings about that matter.  We think that is properly to be regarded as a decision that in respect of a breach of contract claim, the onus being on the Applicant to prove his case, he had failed to do so.

(b)	As to, 1993/1994, the Tribunal considered six separate breach of contact claims and upheld only one of them – that relates to parents evenings – and adjudicated that the Applicant was entitled to be paid 8 hours in respect of attending those meetings.  All other claims were dismissed.

(c)	As to 1994/1995 the Tribunal was here required to adjudicate on 16 separate claims, all of which were dismissed except for a claim, again in relation to parents evenings, which was upheld and a claim relating to one training day at Staffordshire College which too was upheld.

31	Those claims had been made in the most trenchant terms, as has characterised all of the oral and written submissions made by the Applicant against his employer; that is, a criticism of the employer for being deceitful, fraudulent, guilty of conning (as he put it) the leaders and members of the trade unions which it recognised, two Employment Tribunals, a district judge, a circuit judge and now us. The college has been guilty of a deliberate design to take money from its workers, imposing slavery upon them and causing them to be required to work 100 hours a week without extra pay.  He includes himself in that category

32	Those claims failed. When quantified by the Employment Tribunal following his detailed submissions, the claim amounted to £324,000 odd plus interest at 7% since March 1995.  As we have pointed out, he succeeded on only two aspects of the breach of contract claim and the calculation of those figures is in the hundreds of pounds.  Thus, the Applicant’s approach to the evaluation of his claims and his categorisation of the action of the employer should be seen in that context.

33	We have not been addressed separately on any of the particular claims made and dropped apart from the issue relating to the additional hours and that is the subject of what we hold to be, as did the Tribunal, the essential issue in this case. The Tribunal recalled the substantial economic pressure for changes in conditions brought upon this college and its organisation, the Colleges Employers Forum.  Those changes were driven through and resulted in implementation on 1 June 1995 and the abandonment of the Silver Book which contained elaborate terms and conditions.  It was achieved by agreement of NATFHE.  It required acceptance individually which was given in respect of 149 out of the 150 lecturers, the Applicant being the exception.

34	There can be no doubt that the new terms and conditions were adverse to the Applicant.  Indeed, Mr Sheppard prepared a schedule indicating 8 items by which individual employees such as the Applicant would be disadvantaged by the new conditions and yet acceptance was made on the basis of change which had to occur at the college and in the sector in general.  The union advised acceptance of them. The central claim about the hours of work derives from the contention that the Applicant was required to do additional work by way of marking and preparation over and above those for which the contract specifically stipulated.

35	The Tribunal heard substantial evidence about the way in which lecturers worked, for evidence was given by three senior managers and lecturers of the college which it accepted.  The Tribunal acknowledged that the written terms did not solve the problem and therefore was concerned with the implication of terms.  It said this:

90	“The Tribunal is satisfied, from the evidence which it has heard, that from time-to-time all lecturers in colleges of further education who discharged their duties in a professional manner were likely to have exceeded 30 hours a week in doing so.  The Tribunal is further satisfied that, although it is not expressly provided in the contract, there was implied into it an obligation on the lecturer to undertake his or her work in a professional manner.  This is because an “officious bystander” would have concluded that the parties to the Silver Book must have intended such a clause to be implied in it.  The officious bystander would reach this conclusion because the implied term is necessary to give business efficacy to the contract and, also, the term represents the obvious, but unexpressed, intention of the parties.  For the lecturer to undertake his or her work in a professional manner it would be necessary for him or her to work over and above 30 hours a week to a reasonable extent when necessary to discharge the functions of a lecturer.  Thus, the Tribunal is satisfied that the Silver Book Terms and Conditions did require the lecturer to work over and above 30 hours a week to a reasonable extent when necessary to discharge the functions of a lecturer.  The lecturer could not be required to be present on College premises for more than 30 hours a week and so he or she could undertake work of preparation and/or marking wherever it suited him or her.  It is to be noted that apparently until Halesowen College ceased to be operated by the Local Education Authority the Applicant was prepared to undertake preparation and marking without additional payment.”

36	It is clear that it made that decision relating to the implication of a term on the basis of the evidence presented to it by the Respondent’s witnesses.  Not only that, the implication corresponded to what the Tribunal in its own experience would have decided would be a term for a person in a professional position of a lecturer in order to carry out his or her professional duties.

37	Thus, the Tribunal concluded that the Applicant was required to do additional hours without remuneration in respect of those limited matters such as marking and preparation but only for a reasonable amount of time.  When it refused to pay him more than that it was not in breach of contract.

38	It does require to be underlined that this was not an open-ended unilateral obligation imposed unfairly upon the teaching staff, for the Tribunal’s finding is that they were required to do no more than was reasonable by way of preparation and marking. The Tribunal concluded that in addition to the express terms of the Silver Book there was to be implied the term of additional reasonable marking and preparation time; and so it rejected the Applicant’s claim.

39	In each of the other respects upon which the Tribunal made an adjudication, we have not been addressed in terms, and we think rightly since the Applicant is most concerned about the hours of work issue.

Unfair dismissal compensation

40	Turning to the decision relating to unfair dismissal, the Tribunal decided that the Applicant would have been fairly dismissed at the end of December.  The reason why it did this was because of the relationship between the Respondent and the Applicant at the time, it being recalled that all others had accepted the contract and the evidence which the Tribunal accepted was that the Principal would not allow one person to have separate conditions.

41	The Tribunal, in what it described as an unusual case requiring a prediction, was able to give an unusually high degree of certainty to its conclusion that the Applicant would not have survived beyond the end of the year, when he would have been dismissed fairly because the relationship of trust and confidence had broken down between them and because the terms had been accepted by everybody else and it was reasonable to dismiss a person who had not accepted them.

The Applicant’s Case

42	The Applicant’s case on the contract is that the Tribunal erred in law in its approach to that implication contending that it relied upon hearsay. In relation to unfair dismissal, that it is unfair on an employee for him to have to accept terms which are disadvantageous to him and that the Tribunal could not say with any degree of certainty that he would have been fairly dismissed at any stage.

The Respondent’s Case

43	On behalf of the Respondent Mr Sheppard contended that the Tribunal made clear findings of fact and applied the law correctly on the two topics with which it was seized.

The Legal Principles

44	The legal principles to be applied in this case appear to be as follows:

(1)	Whether the new terms and conditions offered by an employer were those which a reasonable employer could offer is only one element in the test for whether the dismissal of an employee for refusing to accept substantial changes in terms and conditions is reasonable.  It is wrong to look at the employer’s offer alone because that necessarily excludes from consideration everything that happened between the time the offer was made and the dismissal, including the potentially significant factor of whether other employees accepted the offer: see St. John of God Care Services Ltd v Brookes & Others [1992] IRLR 546.

(2)	In considering, for the purposes of section 98 (4) whether employers had acted reasonably in treating an employee’s refusal to accept a new contract as a sufficient reason for dismissal, an Employment Tribunal has to consider whether the employee was acting reasonably in refusing proposed terms and must consider whether the terms were objectionable and oppressive: see Evans v Elemeta Holdings Ltd [1982] ICR 323 EAT, Mr Justice Browne-Wilkinson P at 327.

(3)	In the assessment of compensation, where a Tribunal is of the view that a dismissal might or would have taken place, compensation is to be limited by the percentage figure which the Tribunal puts upon it.  If it is certain that the employee would have been dismissed fairly at some later date, the Tribunal may assess the percentage at 100%: see Polkey (above).

Conclusions

45	At the heart of this case is the unchallenged fact that the Applicant attended at work at 8.00 am and stayed until about 5.00 pm without having much of a lunch break.  But the Tribunal found that he did it “because it suited him personally to do so”.  That means that he was not required to be there and could not demand payment for it. We cannot fault the approach of the Tribunal to the collection of the evidence and the conclusion it drew from it.  We are unable to see that the Applicant’s claim for breach of the contract of employment, for breach of Magna Carta and for violation of his human rights can be sustained.

46	We have seen no error in the approach of the Employment Tribunal to the breach of contract claims and to the implication of the term relating to what is reasonably required of a professional person. 

47	As to the unfair dismissal claim, we reject the contention that the Tribunal erred in its calculations.  The Tribunal was acutely aware that in its second decision it reached the same arithmetical conclusion as in the first which had been criticised by the Employment Appeal Tribunal.  Nevertheless, the basis upon which it decided that the Applicant would not have survived beyond 1995 displays, in our judgment, cogent reasons on the basis of evidence.  There was substantial hardening of attitude by the Applicant against his employer and the relationship cannot be described as anything other than venomous.

48	The evidence which the Tribunal accepted that the Principal would not accept anyone standing out of line indicated the proportions involved of those accepting and those resisting.  The Tribunal looked at the adverse nature of the new conditions.  It rejected the Applicant’s claim that others had been conned by forged documents. It directed itself correctly to Polkey and expressly to the passage in which the House of Lords per Lord Bridge adopts the judgment of Browne-Wilkinson P in Sillifant v Powell Duffryn Timber Ltd [1983] IRLR 91. The Tribunal acknowledged that the facts were unusual and recounted in full the difficulties between the Applicant and the Respondent and his trenchant criticisms of them.

49	In our judgment, therefore, the Tribunal made sufficient findings of fact and did not repeat its earlier deficiency. It argued carefully for the conclusion which it drew from those facts having applied, correctly, the judgment of the House of Lords and the EAT in the two cases which we have cited.

50	The appeal is dismissed.