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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Street v East Midlands Electricity Plc [1998] UKEAT 163_98_0510 (5 October 1998) URL: http://www.bailii.org/uk/cases/UKEAT/1998/163_98_0510.html Cite as: [1998] UKEAT 163_98_0510, [1998] UKEAT 163_98_510

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APPEARANCES

 

For the Appellant	Mr P Todd Messrs Hopkin & Sons Solicitor Eden Court Crow Hill Drive Mansfield NG19 7AE
For the Respondent	Mr J Cavanagh (of Counsel) Freeth Cartwright Hunt Dickins Solicitors Willoughby House 20 Low Pavement Nottingham BG1 7EA


 


JUDGE H J BYRT QC: This is an appeal of a decision promulgated on the 10 November 1997 of the Employment Tribunal sitting in Nottingham. By that decision the Tribunal held that the employee Mr Street was neither dismissed for redundancy nor constructively dismissed, and therefore there was no question of an unfair dismissal.

Mr Street appeals only on the redundancy issue. The facts can be stated quite shortly. He was employed by the Respondent company for something like thirty-eight years, up until the 31 January of 1997. By that stage he had achieved a position known as the Revenue Protection Officer. In May 1991 he moved to Nottingham and worked from there under the supervision of a Mr Saville. It is fair to say that he did not always see eye to eye with Mr Saville about the way in which he should undertake his work. In January 1996 he was called up for jury service and somewhat unusually, that took him away from his job until July of that year.

However, Mr Saville kept in contact with Mr Street and in the March intimated to him that he proposed a restructuring of the management of his side of the business. It is the Employment Tribunal's finding that the restructuring talked about, was merely emphasising the administrative side of Mr Street's role, rather than anything amounting to a repudiation of a contractual term.

In August, Mr Street finished his jury work and came back to resume his employment. During the next fortnight, there was some desultory discussion about the restructuring. I think this was with somebody more senior than Mr Saville. Mr Street made it known he was unhappy about the situation.

He then went away on holiday for two weeks. Shortly, thereafter he took off on sick leave. His general practitioner diagnosed him as suffering from anxiety and depression. He was away for a prolonged period, and during that time his managers kept in touch with him and did what they could to make suggestions as to how his anxiety might be relieved. They suggested he might consider taking on different roles or perhaps move to a job which was nearer where he lived.

In the December of 1996, he was seen by the Respondent's medical advisers who reported that Mr Street's depression was improving, and that the future prognosis was good.

On 11 December he had a meeting with Mr Moore, who I think was a man in senior management. On that occasion, Mr Street asked him what were the chances of his getting selective voluntary severance. At that stage Mr Moore expressed doubts as to whether he would be able to arrange that for him. He said that it was not usually offered to people who were away sick and especially so, when, if Mr Street left, he, Mr Moore, would have to find a replacement for his position. Again, to help him, he offered Mr Street some change in the job he did. Mr Street said he would think about Mr Moore's proposal over Christmas and let him know.

In early January 1997 Mr Street made plain to the Respondents he still wanted selective voluntary severance, and indeed during that month, on two occasions, he rang up the Respondents and made enquiries about the possibility of his being granted this. Mr Moore eventually agreed to put the proposition to higher management for approval, if that was what Mr Street really wanted. In due course, management offered Mr Street selective voluntary severance as of the date of 31 January 1997. The offer was made to Mr Street in a letter, delivered by hand. He was told he should consider the contents with great care, and if at the end of the day he chose to accept those terms, he should return the form signed. It was a finding of the Employment Tribunal that during this time the Respondents had acted most reasonably, and, in the context of Mr Street's ill health, anxiety and depression, had dealt with him sympathetically throughout. The Tribunal found that they applied no pressure to him at any stage, and had reiterated at all times his job was safe and secure.

In any event, following receipt of the letter dated 30 January from the Respondents, Mr Street signed and returned the letter of acceptance, and presumably in due course was paid the sum of £28,000 which was referred to in that letter. Before the Employment Tribunal, and indeed before us today Mr Todd advanced the submission, that the letter of 30 January and Mr Street's letter of acceptance, form an agreement which has to be construed in accordance with common law principles of construction. He submits one has to ascertain the proper and natural meaning of the agreement from within the four corners of those two documents. He says that, in construing it in that way, the Court has to exclude all extrinsic evidence, such evidence being inadmissible.

First, he refers to the letter of 30 January for its context as set out in its heading,

"Termination of employment by reason of redundancy"

I think it is fair to say that that is the only time "redundancy" is mentioned, save for a passage in the computation of the amounts to be paid to Mr Street. Mr Todd's argument is that, whether or not there was a redundancy situation existing in the company at the time is an irrelevance because the letter itself makes plain that the termination is to take place as a result of redundancy. He then says that the letter shows that part of the payment to be made to Mr Street includes a statutory payment for redundancy. He submits that such payment betokens a dismissal and that his leaving is because of such a dismissal. A fortiori, he says, the Employment Tribunal had jurisdiction to entertain Mr Street's claim for unfair dismissal.

The employers case, as submitted by Mr Cavanagh, is that the agreement cannot satisfactorily or properly be seen in the context of those two letters alone. They are merely evidence of what had been previously discussed and agreed between the parties. Reference to redundancies has to be taken into account but against the background of what was being sought to achieve, namely the dressing up of the selective voluntary severance payment Mr Street wanted. It was all being done at his initiative as was noted by the Tribunal. Mr Cavanagh further remarked that the Employment Tribunal had underlined the difficulties Mr Moore had in advancing the suggestion that Mr Street should be entitled to such severance payment by reason of there being no redundancy situation. He says the Employment Tribunal took note of the fact that the employers actually wanted Mr Street to return to work; furthermore that there was no pressure on Mr Street to do anything else other than what he wanted himself, that he was free to accept or reject whatever was put forward by the employers.

Mr Cavanagh submitted we should apply the case of Birch -v- University of Liverpool [1985] ICR 470 CA which stresses that in construing a matter of this sort, and looking at the overall situation which arises on a termination the court should look at the realities of the situation and ask themselves who in fact terminated the contract. Was it the employer, was it the employee or was it a termination by mutual agreement? Mr Cavanagh submits that clearly the Tribunal decided rightly that this was a consensual termination, right in the context of the facts of the case and in the context of the law they had to apply. And so we come to a decision of this Tribunal.

We accept the submissions of Mr Cavanagh that the letters to which Mr Todd attaches such importance, are merely evidence of the previous discussions. In fact, the letter of 30 January states as much in the first paragraph, and we do not think that this letter and the letter of acceptance ought to be treated as a watertight exposition of any agreement between the parties. Accordingly, the strict rules of construction upon which Mr Todd has relied should not be applied to the construction of these two particular letters in isolation. Those documents have to be set in the context, advanced by Mr Cavanagh.

We take note of the findings of fact by the Employment Tribunal, that the whole process of discussion about Mr Street's termination was initiated by him. It arose as a result of his needs and his requirements, not that of the employers. The Employment Tribunal further noted that no redundancy situation applied. There was a job available for him which in no way transgressed the terms of his contract. He was invited by the employers to stay and again whether or not he accepted the proposed settlement was a matter entirely for him; he was free to accept or reject it. All these factors contest the suggestion he was dismssed for redundancy.

There is of course references in the letter, both of the 30 January and in Mr Street's reply, to redundancy, but we think such use of that term was misplaced. The Court has to look at the substance of what was agreed, rather than the form. Those of us who on this Tribunal have experience in industrial matters, far greater than me, have advised that letters of this sort all too frequently get sent out by Personnel Departments without being adapted to suit the needs of the particular communication. One takes note of the fact that the letter of 30 January sets out in detail the way in which the payment of £28,000 is computed. There is a reference to a statutory payment. There is a reference to a pay in lieu of notice. These, as Mr Todd submits, are all suggestive of a dismissal by the employer, but equally, as Mr Cavanagh suggests, they can be seen as but an illustration of the way in which the amount of money being paid to Mr Street has been computed. It provides a rational basis for the voluntary settlement which enables Mr Street to assess for himself the appropriateness of the payment.

In our view, the Employment Tribunal asked itself the right questions and applied the law correctly to the facts as they found them. This Tribunal is not able in the absence of any plea of perversity to challenge the Employment Tribunal's findings of fact.

In all the circumstances, we think that this appeal must be dismissed.