McDONALD v PARISH of ST. HELIER

JurisdictionJersey
CourtRoyal Court
JudgeBirt, Deputy Bailiff and Jurats Allo and Newcombe
Date03 June 2005
ROYAL COURT
Birt, Deputy Bailiff and Jurats Allo and Newcombe

D.F. Le Quesne for the plaintiff;

M.J. Thompson for the defendant.

Cases cited:

(1) Addis v. Gramophone Co. Ltd., [1909] A.C. 488, referred to.

(2) Boyo v. Lambeth L.B.C., [1994] I.C.R. 727; [1995] I.R.L.R. 50, referred to.

(3) Eastwood v. Magnox Electric Plc., [2005] 1 A.C. 503; [2004] 3 All E.R. 991; [2004] I.C.R. 1064, followed.

(4) Focsa Servs. (UK) Ltd. v. Birkett, [1996] I.R.L.R. 325, referred to.

(5) Gunton v. Richmond-upon-Thames L.B.C., [1981] Ch. 448; [1980] 3 All E.R. 577; [1980] I.C.R. 755; [1980] I.R.L.R. 321, applied.

(6) Janciuk v. Winerite Ltd., [1998] I.R.L.R. 63, considered.

(7) Johnson v. Unisys Ltd., [2003] 1 A.C. 518; [2001] 2 All E.R. 801; [2001] I.C.R. 480; [2001] I.R.L.R. 279, followed.

(8) Malik v. Bank of Credit & Comm. Intl. S.A., [1998] A.C. 20; [1997] 3 All E.R. 1; [1997] I.C.R. 606, referred to.

(9) Malloch v. Aberdeen Corp., [1971] 1 W.L.R. 1578; [1971] 2 All E.R. 1278; (1971), 115 Sol. Jo. 756, referred to.

(10) Reda v. Flag Ltd., [2002] I.R.L.R. 747, applied.

(11) Ridge v. Baldwin, [1964] A.C. 40; [1963] 2 All E.R. 66; (1963), 107 Sol. Jo. 313, referred to.

Employment—termination—unfair dismissal—damages—employee dismissed unfairly and in breach of contract only entitled to damages for wages during contractual notice period—if dismissal breached contractual disciplinary procedure, damages also to cover wages earned had procedure been followed—assumed would have been dismissed on notice immediately after disciplinary procedure concluded

Employment—termination—unfair dismissal—no remedy at common law—inappropriate to create common law remedy as statutory remedy provided in Employment (Jersey) Law 2003, though not yet in force—co-existence of different remedies would cause confusion

The plaintiff brought an action for damages against the defendant for dismissal in breach of his contract of employment.

The plaintiff had been employed by the Parish and his contract of employment incorporated conditions which provided inter alia that the contract was terminable by the Parish on eight weeks' notice. They also provided for a disciplinary procedure to be followed if misconduct were alleged, with an appeal to the Disputes Committee, the decision of which was stated to be final and binding on the parties.

Before his dismissal, the plaintiff was employed by the Parish as a supervisor, which he acknowledged to be a position of trust. He took unauthorized absences from that employment, however, and at a disciplinary hearing the Parish resolved to dismiss him summarily and without notice, on the ground of gross misconduct. The Disputes Committee upheld his appeal and decided that he should instead be given a final written warning. The Parish ignored this decision and dismissed him with eight weeks' pay in lieu of notice. It admitted that the dismissal was a breach of the contract of employment and that the plaintiff was therefore entitled to damages.

There was no statute in force in the Island concerning unfair dismissal, but the States had passed the Employment (Jersey) Law 2003 which had still not been brought into effect. That Law established a statutory remedy for unfair dismissal, to be administered by an employment tribunal. The statute limited the complainants and the compensation to be awarded.

After his dismissal by the Parish, the plaintiff had a number of short periods of employment, the termination of several of which was probably the result of further unauthorized absences. He also withdrew his accumulated Parish pension contributions. He instituted the present proceedings claiming damages from the Parish for his dismissal in breach of the disciplinary procedure provided for in the contract.

The plaintiff submitted that (a) although, under the established common law, damages for dismissal in breach of contract were limited to the wages for the period of notice required to terminate the contract, the court should develop the common law to enable him also to recover his losses arising from the dismissal, namely, his loss of wages until the age of 65 and his loss of a full pension; and (b) the common law should be so developed despite the Employment (Jersey) Law 2003, as that Law was not yet in force and it would be unjust that he should be denied a remedy merely because a statutory remedy for unfair dismissal was to be introduced in the future.

The Parish submitted in reply that (a) although it had dismissed the plaintiff in breach of contract, he was only entitled to damages representing the period of notice which would have been required to dismiss him, which he had already received; (b) the development of the law of unfair dismissal was a matter for the legislature, which had passed the Employment (Jersey) Law 2003, and the courts should not develop the common law inconsistently; and (c) if additional damages were to be awarded, it was highly probable that, had it given the plaintiff a written warning, it would have dismissed him within a year and, additionally, it should not be liable for the plaintiff's withdrawal of his pension contributions, which had been unreasonable.

Held, dismissing the claim:

(1) As the plaintiff had received eight weeks' pay in lieu of notice, his claim for further damages for the Parish's admitted breach of contract in failing to comply with the disciplinary procedure would be dismissed. Damages for dismissal in breach of contract were limited to the amount the employee would have earned had the contractual notice period been given, as an employer is expressly entitled to dismiss on notice, with or without giving reasons. When an employee was dismissed in breach of a requirement to follow a disciplinary procedure, damages would also be awarded to include the time for which, had the procedure been followed, the employment would have continued—it being assumed that he would be dismissed on notice after the disciplinary procedure was concluded. As the plaintiff was in fact employed during the disciplinary procedure, the outcome of which was disregarded by the Parish, he was only entitled to damages for the eight-week notice period, which he had already received ( paras. 15-17; para. 22).

(2) It would not be appropriate to develop the common law as suggested by the plaintiff so that he could also recover additional losses arising from the dismissal, namely, his continuing loss of income until he reached retirement age and the loss of his full pension. Whilst it might have been appropriate to develop the common law in the absence of legislation, the States had already passed the Employment (Jersey) Law 2003, which created a statutory remedy for unfair dismissal. It would not, therefore, be appropriate for the common law to be developed inconsistently with the States' declared policy as, when that Law would be brought into force, the co-existence of two overlapping but different systems would cause incoherency and chaos. It was irrelevant that the Law was not yet in force, as the legislature had set out its policy, which was ready to be implemented, though had it not yet been passed and had the States merely been at the consultation stage, the suggested development of the common law might have been appropriate. Any development could then have been considered by the States. No injustice would, however, be caused to the plaintiff by the refusal to develop the common law in light of the Employment (Jersey) Law 2003, as his claim would be dismissed according to the existing law ( paras. 46-47).

(3) Had the plaintiff's submission that damages should not be restricted to earnings during the eight-week notice period been accepted, the award for loss of earnings would in any case have been limited to one additional year's employment, as it was highly probable that within that period the plaintiff would have taken further unauthorized absences for which he would have been dismissed. His actual loss would have been the difference between the salary he would have received from the Parish and his actual earnings during that period. Moreover, he had acted unreasonably in withdrawing his pension contributions and the damages for his loss of pension would therefore have been calculated on the assumption that he had not done so. Had it been found that the plaintiff would have been employed by the Parish until 65, the damages awarded in respect of his lost pension would have been the amount required to purchase a pension (payable when he reached 65) which would have replaced that lost by reason of his dismissal ( paras. 65-66; para. 68; paras. 73-75).

1 BIRT, DEPUTY BAILIFF: In this case, Advocate Le Quesne submits that the court should take the opportunity of effecting a significant change in the law relating to damages for wrongful termination of employment. Mr. Thompson argues that that is a matter for the legislature.

The factual background

2 The plaintiff was employed as a driver/labourer by the Parish of St. Helier with effect from March 22nd, 1990. His letter of employment incorporated by reference the conditions of employment laid down by the States of Jersey Manual Workers' Joint Council ("the Council"). The conditions provided that the contract was terminable on a period of notice by the Parish varying with the length of service: on the facts of this case, eight weeks. The conditions also provided that where misconduct was alleged there was a disciplinary procedure.

3 This procedure provided that, in cases of gross misconduct, there was to be an initial disciplinary hearing by officers of the Parish. An employee had a right of appeal, in accordance with the procedure for the settlement of differences contained in the Council's handbook, to the relevant committee of the Parish. A further appeal then lay to the Disputes Committee of the Council. This was an outside body the members of which would not be officers or employees of the...

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