Appeal No.UKEAT/0544/04/SM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 7 January 2005
Handed down on 10 February 2005

Before
HIS HONOUR JUDGE MCMULLEN QC
MRS J M MATTHIAS
DR K MOHANTY JP

LONDON PROBATION BOARD	APPELLANT

MR I KIRKPATRICK	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR DAMIAN BROWN
(of Counsel)
Instructed by:
Messrs Beachcroft Wansbroughs Solicitors
100 Fetter Lane
London
EC4A 1BN	
For the Respondent	MR SCOTT PEARMAN
(of Counsel)
Instructed by:
Messrs Coomber Rich Solicitors
Yard House
May Place
Basingstoke
Hants
RG21 7NX	

SUMMARY

Unfair Dismissal

When an employee is dismissed and then reinstated on an internal appeal it is open to the parties to agree reinstatement as a matter of contract and such an arrangement albeit made after the gap in the continuity of employment, fills in the gap for the purposes of section 212 of the Employment Rights Act 1996.  Ingram v Foxon [1984] ICR 685 EAT followed; Murphy v A Birrell & Sons [1978] IRLR 458 EAT not followed.

HIS HONOUR JUDGE MCMULLEN QC

1.	This appeal concerns the jurisdiction of an Employment Tribunal to hear a claim of unfair dismissal in unusual circumstances.  The employer decided to dismiss the employee, two months later decided to uphold his appeal and reinstate him, and a month later to renege on that promise and restore the original dismissal.  He was out of time to bring a claim based on the first dismissal.  The employer contended that if the employee was reinstated, his continuity of employment was broken and he did not have one year’s necessary continuous employment.  

2.	We will refer to the parties as Claimant and Respondent in the language of the 2004 Regulations.  The judgment represents the views of all three members.

Introduction

3.	It is an appeal by the Respondent in those proceedings against the Decision of an Employment Tribunal sitting at London South, registered with Extended Reasons on 11 May 2004, Chairman Mr G Self.  The Claimant was represented there and here by Mr Scott Pearman of Counsel, and the Respondent here by Mr Damian Brown and there by different Counsel.  A witness statement by the Claimant was from Ms Polly Higgins of Counsel, who had represented him at the internal appeal.  The Claimant claimed unfair dismissal.  The Respondent took the two jurisdiction points mentioned above, and defended the case on the merits.  A preliminary hearing was conducted by the Employment Tribunal at which the issues were as follows:

“1.	By an application lodged at the Employment Tribunal on 28 November 2003, the Applicant claims that he was unfairly dismissed by his former employer, London Probation Board on 4 September 2003.
2.	In the Notice of Appearance, the Respondent accepts that the Applicant was dismissed but disputes the date claiming that the employment terminated on 10 June 2003.  That dispute over the effective date of termination means that there was an issue as to whether the claim has been presented in time pursuant to section 111 of the Employment Rights Act 1996.”

The Tribunal upheld the Claimant’s right to proceed.  The Respondent appealed.  Rimer J ordered a preliminary hearing so that the Claimant’s submissions could be heard.  At a preliminary hearing Cox J and members ordered a full hearing on the following questions in the judge’s summary:

“Was employee reinstated? If he was not, the claim was presented out of time.  If he was, the Respondent argues there was no continuity of employment.  There are potential policy considerations – interface of statute and breach of contract – employer’s failed to activate appeal board “recommendation” to reinstate employee.”

At the preliminary hearing the Claimant provided written submissions contending that there was no merit in the appeal which was against factual findings and if the Respondent were correct it would have an impact on all internal disciplinary appeals.

The legislation

4.	An unfair dismissal claim must be presented with three months of the effective date of termination: section 111 Employment Rights Act 1996.  No discretionary extension was sought.  The Claimant in this, an ordinary unfair dismissal case, must have one year’s continuous employment: section 108.  Continuous employment is defined in Part XIV Chapter 1 and the following provisions are relevant:

“210 (1) References in any provision of this Act to a period of continuous employment are (unless provision is expressly made to the contrary) to a period computed in accordance with this Chapter.
…
(4) Subject to sections 215 to 217, a week which does not count in computing the length of a period of continuous employment breaks continuity of employment.
      (5) A person's employment during any period shall, unless the contrary is shown, be presumed to have been continuous.
211 (1) An employee's period of continuous employment for the purposes of any provision of this Act- 
(a)	(subject to subsections (2) and (3)) begins with the day on which the employee starts work, and 
(b)	ends with the day by reference to which the length of the employee's period of continuous employment is to be ascertained for the purposes of the provision. 
…
(3) If an employee's period of continuous employment includes one or more periods which (by virtue of section 215, 216 or 217) while not counting in computing the length of the period do not break continuity of employment, the beginning of the period shall be treated as postponed by the number of days falling within that intervening period, or the aggregate number of days falling within those periods, calculated in accordance with the section in question.

212 (1) Any week during the whole or part of which an employee's relations with his employer are governed by a contract of employment counts in computing the employee's period of employment.
…
(3) …  any week (not within subsection (1)) during the whole or part of which an employee is- 
…
(c)	absent from work in circumstances such that, by arrangement or custom, he is regarded as continuing in the employment of his employer for any purpose…”
counts in computing the employee’s period of employment.”

5.	The relationship between continuity of employment and reinstatement is provided by section 219:

“219 (1) Regulations made by the Secretary of State may make provision- 
(a)	for preserving the continuity of a person's period of employment for the purposes of this Chapter or for the purposes of this Chapter as applied by or under any other enactment specified in the regulations, or 
(b)	for modifying or excluding the operation of section 214 subject to the recovery of any such payment as is mentioned in that section, 
in cases where… a dismissed employee is reinstated re-engaged or otherwise re-employed by his employer or by a successor or associated employer of that employer in any circumstances prescribed by the regulations.”

6.	The current Regulations are found in the Employment Protection (Continuity of Employment) Regulations 1996 which include the following:

“3 (1)  The provisions of this regulation shall have effect to preserve the continuity of a person's period of employment for the purposes of—
(a)	Chapter I of Part XIV of the Employment Rights Act 1996 (continuous employment)
…
(2)  If in consequence of any action to which these Regulations apply a dismissed employee is reinstated or re-employed by his employer or by a successor or associated employer of the employer—
(a)	the continuity of that employee's period of employment shall be preserved, and
(b)	the period beginning with the date on which the dismissal takes effect and ending with the date of reinstatement or re-engagement shall count in the computation of the employee's period of continuous employment.”

7.	The application of the Regulations is defined by regulation 2, which covers six situations and which, so far as is relevant to the present appeal, includes: “the presentation by him of a relevant complaint of dismissal” (regulation 2(b))

8.	The Tribunal was referred to these Regulations but decided to “look at this matter in a straightforward way”.

The facts

9.	The Tribunal made the following findings:

“3.	The matter has come before us today on a preliminary hearing to determine whether or not the Tribunal has jurisdiction to hear this claim.  We have heard oral evidence from the Applicant and from Ms Moorman on behalf of the Respondent.  We have read such documents as we have been taken to in the bundle and considered the closing submissions of both parties’ advocates. 
4.  The Applicant was a Process Finance Manager with the Respondent.  Allegations were made against him that led to investigations and a disciplinary hearing on 10 June 2003. Following that hearing the Applicant was dismissed effective from 10 June 2003 and received one month’s pay in lieu of notice subsequently extended to 12 week’s Day in lieu of notice.  He was given the right of appeal which he exercised, that hearing took place on 11 August 2003. 
5.  We have in the bundle the notes of that appeal hearing. Part of the decision reads as follows: 
“We do not find that his behaviour was such as to lead the LPA to conclude that it cannot place its trust and confidence in him. Accordingly we find that this was not a disciplinary offence and therefore he is reinstated with the extant final written warning.”
6. We have seen evidence which we accept that there was a conversation following the hearing between counsel then representing Mr Kirkpatrick and Ms Moorman to the effect that it was confirmed that pay would be reinstated to the Applicant and indeed would be backdated to the original date of dismissal.  On 13 August 2003 just after the appeal, a letter purportedly sent by Ms Moorman stated: 
“We are currently reviewing our various options stemming from the above (namely the appeal hearing) and will be in contact with you regarding this in the near future.”
7. There then followed letters from the Applicant on 15 August 2003 and 1 September 2003.  Both had reinstatement dealing with matters of pension and other payment issues.  Unbeknown to the Applicant there was a meeting of the London Probation Board on 4 September where Mr Methley tabled a report wherein he recommended that the board should agree that the Applicant should not be reinstated and that the dismissal should stand notwithstanding the decision of the appeal panel.  At that meeting Carol Markham one of the appeal panel said that she discussed the matter with the colleagues on the appeal panel but she felt confident that the colleagues would support the decision on the basis of a full picture set out in the paper.  Those matters being said on 5 September 2003, a letter again was sent by Ms Moorman saying that “The board had decided not to reinstate you because the trust and confidence initially that exists between and employer and employee no longer exists in your case.” 
8. In his skeleton argument the Respondent’s counsel sets forward an impressive array of matters that he contends assists his case.  We look at this matter in a straightforward way.  The Applicant was dismissed.  He was then reinstated by the appeal panel.  It was readily apparent that the intention at the end of the appeal hearing was to place the Applicant back in the position he would have been but for his erroneous dismissal.  That would have meant that his arrears of pay would have to be met and recompense for the rest of his benefits.  Importantly his continuity of employment would have been retained.  There was no novation of the contract.  The dictionary definition of reinstatement is “to restore or to re-establish in a former station or condition”.  We find that the appeal panel had the power to reinstate and did so.  The dismissal was wiped from the record at that juncture as was any break in the Applicant’s service.  We find that the Applicant was then dismissed when on 5 September the employer’s about turn was made known to him.  In those circumstances the claim was filed in time and this matter should proceed to a full merits hearing.”

10.	The letters referred to in internal paragraph 7 in the quoted material above show the Claimant seeking to enforce the promise of reinstatement, querying what happened to his and his employer’s pension contributions during the absence, and suggesting that the payment of his contractual notice pay of 12 weeks, which had been made without deduction of tax and national insurance, should be treated as wages and he would repay the difference.

The Respondent’s case

11.	On behalf of the Respondent Mr Brown contends that there never was reinstatement because as a matter of fact the Claimant was not returned to the payroll, his benefits and pension entitlement ceased and he never returned to work.  Even if he were reinstated, the gap between 10 June and 11 August 2003 affected statutory continuous employment and deprived the Tribunal of jurisdiction to hear the claim.  Continuity is a statutory construct which may not be the subject of an agreement between parties.  There was no scope to imply into the contractual relationship between the parties a term that when an internal appeal succeeded the employee was to be regarded as continuing in employment.  An arrangement for the purposes of section 212(3)(c) cannot be entered into retrospectively but must be in place prior to the beginning of the relevant gap, for otherwise there would be no need for section 219 and for the Regulations.  The Regulations only applied where there had been the presentation of a claim to an employment tribunal.

The Claimant’s case

12.	On behalf of the Claimant Mr Pearman as his primary argument contends that the matter can be resolved without reference to the statute.  Reinstatement is a contractual matter.  As a matter of fact he had been reinstated by the promise of the appeal board.  He was dismissed when he received notice of the rescission of the decision on 5 September 2003.  From 10 June to 5 September he had been covered by a payment in lieu of notice pursuant to his contract.  The whole of the employment contract was not extinguished by the dismissal on 10 June 2003, for all that happened was that the obligation to work and to provide work ceased.  The Respondent honoured its obligation to make payment in lieu of notice and indeed corrected its initial error by increasing that from four to twelve weeks.  Pension entitlement continued, as did the contractual right to appeal.  The correct approach to the finding by the appeal board that there were no grounds to dismiss the Claimant is that, by reason of the appeal procedure itself, or in its application to this specific case, the Claimant waived that breach ie dismissal when there were no grounds for dismissal, on the promise that he would be reinstated.

13.	
If the matter does require an analysis of the statute Mr Pearman contended that section 210(5) contains a rebuttable presumption. There is, as a matter of construction, no requirement that the arrangement in section 212(3)(c) must be made in advance of the gap.

Discussion of the legal principles
(1) The reinstatement issue
14.	It seems to us that whether or not there was reinstatement is a question of fact for the Employment Tribunal.  It here had the documents, it had live evidence from the Claimant and the Respondent, and written evidence from the Claimant’s then Counsel to whom it was confirmed that reinstatement would be effected.  The procedure in place at the relevant time was highly sophisticated, had been agreed with the relevant trade union and provided for, as here, representation by counsel and attendance by an officer of ACAS.  It must also be recalled that the Respondent is engaged in the enforcement of justice and the Claimant was engaged in a senior position of trust within its establishment.  Nevertheless, it is not clear that the appeal board was applying the definition of reinstatement contained in section 114(1) which concerns an order made by a tribunal and which has the effect that “the employer shall treat the complainant in all respects as if he had not been dismissed”.  Rather, it seems the appeal board was using reinstatement in its ordinary sense as found by the Tribunal (paragraph 8 of its Reasons).

15.	We have looked in detail at the procedure which was “drawn up having regard to the principles and standards contained in the ACAS Code of Practice on disciplinary practice and procedures in employment”.  It is to ensure that “any disciplinary action is administered fairly”.  An employee has “a right of appeal”.  A specific and detailed procedure must be followed at appeal hearings at the end of which the board “should announce the decision whether the appeal has been upheld or dismissed” and it should be confirmed in writing.  In addition a protocol applies to these appeals which describes the role of the ACAS officer who is there as the custodian of best practice and may provide advice which the appeal board should note.

16.	From this it is clear that the appeal board had all the powers of the Respondent.  In our judgment, prior to any disciplinary incident occurring, the Claimant had an enforceable contractual right, if subjected to disciplinary action, to appeal to the appeal board which would treat his case dispassionately, be guided by the ACAS officer as to best practice, and if the finding was that there were no grounds for his dismissal he should go back to work in every respect as if the original decision had not been made.  That is what occurred in this case.  It was a breach of contract for the Respondent to dismiss him on 10 June 2003 for, as the appeal board made clear, there were no grounds for doing so.  The Respondent made up for that breach by its decision to uphold his appeal and reinstate him.  We accept Mr Pearman’s analysis that the Claimant thereby waived the breach, or in any event accepted the reinstatement as an appropriate remedy for it.  Contrary to the submission of Mr Brown, we hold that there was a contractual provision which entitled the Claimant to an independent hearing and implementation of any decision made in his favour.  Conversely, it would not be a breach of contract for a decision to dismiss to be upheld following a properly constituted appeal board.  It follows that a decision to reinstate the Claimant was binding as a matter of contract either by operation of the above procedure, or as a matter of direct promise made by the appeal board itself.  This is put beyond doubt by the acceptance in Mr Brown’s written Skeleton Argument of this:

“The correct analysis is that the Appellant is in breach of contract.  That cannot be disputed.”

That will also be of assistance to the Claimant if he wishes to pursue a claim in the civil courts.  The breach of contract is in dismissing the Claimant on 5 September 2003 following its promise to reinstate him.
17.	In any event, we consider this is a matter of fact and the Tribunal had ample material upon which to base its Decision.  

18.	That analysis corresponds with the approach to appeals and reinstatement set out by Lord Bridge in West Midlands Co-operative Society v Tipton [1986] ICR 192 at 198 E-H and 202 A-E:

“My noble and learned friend, Lord Brightman (then Brightman L.J.), quoted at p111 with approval the following passage from the judgment of the Employment Appeal Tribunal:
“In our view, when a notice of immediate dismissal is given, the dismissal takes immediate effect.  The provisions of this contract as to the appeal procedure continue to apply. If an appeal is entered, then the dismissed employee is to be treated as being “suspended” without pay during the determination of his appeal, in the sense that if the appeal is successful then he is reinstated and he will receive full back pay for the period of the suspension.  If the appeal is not successful and it is decided that the original decision of instant dismissal was right and is affirmed, then the dismissal takes effect on the original date. In our view, that is the date on which the termination takes effect for the purposes of the Act.”
I entirely agree with this reasoning in the absence of an express contractual provision to the contrary effect.
…
But there is nothing to mitigate the injustice to an employee which would result if he were unable to complain that his employer, though acting reasonably on the facts known to him when he summarily dismissed the employee, acted quite unreasonably in maintaining his decision to dismiss in the face of mitigating circumstances established in the course of the domestic appeal procedure which a reasonable employer would have treated as sufficient to excuse the employee’s offence on which the employer’s real reason for the dismissal depended. Adopting the analysis which found favour in J. Sainsbury Ltd. v. Savage [1980] IRLR 109, if the domestic appeal succeeds the employee is reinstated with retrospective effect; if it fails the summary dismissal takes effect from the original date.  Thus, in so far as the original dismissal and the decision on the domestic appeal are governed by the same consideration, the real reason for dismissal, there is no reason to treat the effective date of termination as a watershed which separates the one process from the other.  Both the original and the appellate decision by the employer, in any case where the contract of employment provides for an appeal and the right of appeal is invoked by the employee, are necessary elements in the overall process of terminating the contract of employment.  To separate them and to consider only one half of the process in determining whether the employer acted reasonably or unreasonably in treating his real reason for dismissal as sufficient is to introduce an unnecessary artificiality into proceedings on a claim of unfair dismissal calculated to defeat, rather than accord with, the ‘equity and the substantial merits of the case’ and for which the language of the statute affords no warrant.”

19.	The first citation plainly deals with the contractual provision in that case itself but the adoption of the analysis in J Sainsbury Ltd v Savage (above) shows that the point is one of general application without reference to its statutory context.  It represents what the lay members on this Tribunal consider to be absolutely standard employment relations practice since the whole point of internal appeals is to allow for bad or unfair decisions to be put right.

20.	The consequence of the decision to reinstate the Claimant as a matter of contract was that he was not regarded as having been dismissed, he was entitled to his ordinary wages, he must repay the element of his pay in lieu of notice which represented tax and national insurance not deducted therefrom, and he was entitled to restoration to the rights as a serving employee in the pension fund.  During the gap he was entitled to pay in lieu of notice and to exercise his contractual rights of appeal.  Thus during the gap his contract lived on for certain purposes and after the gap his contract was fully restored.

(2) The continuity of employment issue
21.	We turn then to the statutory continuity point.  As a matter of construction of section 212(3)(c) there is no temporal qualification to the “arrangement”.  An arrangement can be in place without it ever being put into operation in any specific case. An arrangement can be made and applied in a specific case. Logically the “custom” should exist prior to the gap but we see no reason to add words to this statute to mean “arrangement made prior to the break in continuity”.  The only reason advanced in the authorities for that construction, to which we will turn in a moment, is to avoid fraud.  But the ability of an employer to acknowledge it has made a bad or unfair decision and to put it right by reinstatement without troubling an employment tribunal or an ACAS officer seems to us to be a consideration more in tune with reality. 

22.	What do the authorities say?  We have been referred to three EAT authorities supporting the Respondent and one the Claimant.  In Murphy v A Birrell & Sons [1978] IRLR 458 Lord MacDonald and members in the EAT in Glasgow held that a custom must exist at the time the gap began.  That is common ground.  It went on to hold “simply as a matter of construction... we see no reason why the same should not apply to an arrangement” (paragraph 6).  It was held that the arrangement in question must be in the minds of the employer and the employee before the gap.  For if “the arrangement can be made retrospectively it would open the way to calculated fraud which presumably was never intended by the legislature” (paragraph 9).

23.	In Ingram v Foxon [1984] ICR 685 Balcombe J and members in the EAT distinguished Murphy and also appealed to the minds of the legislature as follows:

“The ratio for that decision appears to depend, at least in part, on the argument that if an arrangement could be made retrospectively it could open the way to calculated fraud which presumably was never intended by the legislature: see p. 459, para 9.  No such argument could be adduced in the present case: indeed we believe, as we have already said, that it can never have been intended by the legislature that an employee who has been unfairly dismissed, and whose employer recognises that fact and is prepared to reinstate him, must nevertheless present a complaint to the industrial tribunal if his continuity of service is to be preserved.”

The reference to tribunal proceedings is to what is now Regulation 2. In other words, an employer and employee can make an arrangement in the wake of presentation of a complaint, or without one.  A dispute arose on our appeal as to whether these words referred to the presentation of a complaint to an employment tribunal or simply to the employer.  We uphold Mr Brown’s submission that the Regulations contemplate the formal presentation of a claim to an Employment Tribunal pursuant to the 2004 Employment Tribunal Regulations.  There is no reason to give an informal context to this phrase in the Regulations made pursuant to the power given in the Employment Rights Act, which itself deals with the presentation of an unfair dismissal claim and the formalities attaching to it.

24.	In Morris v Walsh Western (UK) Ltd [1997] IRLR 562 HH Judge Peter Clark and members held that the judgment of the EAT in Ingram was “not permissible” (paragraph 13).  However the judgment in Morris notes that there were merely written representations from the employee himself and there is no reference to representations by the employer.  The short summary of the written representations does not address this legal point.  In paragraph 12, the EAT in Morris holds that Ingram was decided without the benefit of full argument as both parties were unrepresented.  But that was true of the Morris case itself.  In any event, in Ingram both parties appeared in person and argued their points.  With respect, there is no analysis of why the view of Balcombe J’s EAT was “not permissible”.  

25.	In Joseph Ltd v Heath EAT/881/97 HH Judge C Smith QC and members, having heard submissions by legally represented parties and considered the authorities, said this:

“For the reasons we have already given, we do not strictly have to decide whether a retrospective arrangement, designed to preserve continuity, falls within s.212(3)(c) of the 1996 Act.  However, we should state our opinion that, as a matter of construction, the approach of the EAT in Morris based upon the reasoning of Murphy should be preferred.  Whilst we accept that in looking to see whether there is continuity, the Industrial Tribunal does necessarily have to look backwards, in our judgement it does not follow at all from that that a retrospective arrangement is within the subsection.
We respectfully agree with the reasoning of the EAT in Morris at paras 11-13 of that decision, which in turn followed the reasoning in Murphy particularly at para 7.6.10 of that decision.  In our judgment the preferred construction is that the arrangement must be in place at the time when the absence begins to be within s.212(3)(c).  Had this been the only point, we would have been obliged to allow the appeal….”

The other ground obliquely referred to there relates to estoppel, which Mr Pearman in our case sought permission to argue, it not having been raised by him below.  On objection by Mr Brown, we refuse to allow the point to be taken since it would require further investigation by the Employment Tribunal as to matters relied on by the Claimant and other factual circumstances.  We apply the jurisprudence of the EAT reported in Glennie v Independent Newspaper [1999] IRLR 119 (CA).

26.	In our judgment it is correct to follow Ingram.  Purely as a matter of construction there is no qualification on “arrangement”.  Thus, free of authority we would hold that an arrangement can be made retrospectively.  This also fits the policy of dispute resolution at the workplace.  As Balcombe J’s EAT put it, why should it matter that a Claimant has presented a claim to a tribunal in order for an arrangement to take effect.  If parties agree on the sort of arrangement made in this case, and the Claimant goes back to work without the original dismissal taking effect as a dismissal (as occurred in Roberts v West Coast Trains Ltd [2004] EWCA (Civ) 900) it could rightly be described as an abuse of process for a claim form to be presented complaining of unfair dismissal.  Yet on the application of the Murphy principle this artifice would be a requirement. We are, of course, concerned that the EAT in Murphy and again in Joseph (albeit not necessary for its judgment) decided the point as one of construction. Given that a custom must be in place before the gap, neither EAT shows us why it is necessary to add words to the statute so as to limit arrangements to those made in advance of the gap. No judgment except Balcombe J’s deals with the policy reasons. The need to exclude fraud did not arise in any of these authorities nor in our case, so it seems odd to base a construction on that premise. What is the fraud envisaged? An employer and a dismissed employee agree to reinstatement. He has continuity of employment so can complain if dismissed a second time and his employer is exposed when, without the arrangement, it would not be. There is no public finance aspect to this as redundancy pay, based on continuity of employment, is paid by the employer. Furthermore, as Mr Pearman argues, an employer facing large redundancy costs could dismiss the employees, reinstate them after a week but without continuity of employment, and then declare redundancies to a workforce who have no entitlement to claim unfair dismissal, redundancy pay or notice. Besides, committed fraudsters and genuine conciliators alike need only present a claim form, and can then make any arrangement they wish. 

27.	If we are wrong on this, we reach the same result by the Murphy route.  The existence of a highly sophisticated discipline and appeal procedure could aptly be described as an arrangement in existence before the gap in the Claimant’s employment.  We have analysed the effect of such an arrangement as being that the Claimant had a contractual right to have an appeal heard by an independent body which had the power to uphold an appeal against a wrong or unfair decision and to put it right.  This therefore constituted an arrangement in place prior to the relevant circumstances of this case.  For the purposes of section 212, it has an effect on continuity of employment for statutory purposes if the Claimant “is regarded as continuing in the employment of his employer for any purpose…”.  Express contractual terms could be made to this end eg by acknowledging that the gap was covered by a period of suspension with or without pay.  Under this contract, the Claimant had sufficient contractual rights to be regarded as still being in the employment for the purposes of receipt of pay in lieu of notice, negotiating an increase in that in accordance with the entitlement under the contract, and enforcing the contractual right to appeal. That arrangement pre-dated the gap.

28.	Mr Pearman also argued that it was the custom in this employment to implement reinstatement following a successful internal appeal against dismissal. No evidence was led on this matter and evidence would be required to substantiate it. We reject it for that reason. As we say above, an arrangement does not require evidence of its operation, but custom does. 

Conclusion

29.	Our primary conclusion is that the arrangement made in this case was not required by statute to have been made in advance of the gap.  That is sufficient for us to dismiss the appeal.  We uphold the argument of Mr Pearman on this point.  Alternatively, he was regarded as being in the employment of the Respondent for at least the purposes of an appeal, pursuant to established discipline and appeal procedures which constitutes an arrangement made prior to the gap. Following the decision to reinstate the Claimant on 11 August 2003 he had continuity of employment of more than one year on 5 September 2003 which is the date which he fixed as the effective date of termination.  This case will now be heard by any Employment Tribunal.  The parties will exchange Witness Statements directed to the substantive issues in this case and lodge those at the Employment Tribunal within 14 days of this judgment.  At the same time the parties should notify the Tribunal of their available dates and the Tribunal should, in the light of the passage of time, endeavour to fix an expedited hearing.  

Appeal

30.	Both Counsel at the oral hearing invited us to consider, should the judgment be against their client, an application for permission to appeal to the Court of Appeal.  They preferred to do that rather than to await the judgment or the reasons.  We will refuse permission.  Notwithstanding the divergence of opinion at EAT level, we consider the correct approach to be one of statutory construction, backed up as Cox J’s EAT held at the preliminary hearing by policy considerations, and as a matter of construction there is no scope for applying a temporal limitation on the arrangement between an employer and an employee.  Our alternative analysis leads to the same result. We would very much like to thank both Counsel for their succinct arguments in writing and orally.