British Broadcasting Corporation v Kelly-Phillips
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE PETER GIBSON,LORD JUSTICE THORPE,LORD JUSTICE EVANS |
| Judgment Date | 08 April 1998 |
| Judgment citation (vLex) | [1998] EWCA Civ J0408-3 |
| Docket Number | EATRF 97/1051 CMS3 |
| Court | Court of Appeal (Civil Division) |
| Date | 08 April 1998 |
[1998] EWCA Civ J0408-3
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
Royal Courts of Justice
The Strand
London WC2
Lord Justice Evans
Lord Justice Peter Gibson
Lord Justice Thorpe
EATRF 97/1051 CMS3
MR P ELIAS QC and MR J BOWERS ( MR A SENDALL 8.4.98)(Instructed by BBC Litigation Department, London, W12 7TS) appeared on behalf of the Appellant
MR J HENDY QC and MISS J EADY (Instructed by Thomsons, London, WC1B 2LW) appeared on behalf of the Respondent
Wednesday 8th April, 1998
This appeal gives rise to a short but important point on the true construction of s.197(1) of the Employment Rights Act 1996 ("the 1996 Act"). In strictness, because of the dates at which the relevant events occurred, the point arises on the antecedent statutory provision, s.142(1) of the Employment Protection (Consolidation) Act 1978. But the parties' Counsel have sensibly agreed that as the minor differences between the language used in that and other relevant provisions of the 1996 Act and the language used in the earlier legislation do not amount to any change in substance, we can confine our attention to the 1996 Act.
Under Part X of the 1996 Act an employee has the right not to be unfairly dismissed and if so dismissed to bring a complaint to an industrial tribunal and to obtain remedies for such dismissal. Those rights are protected by s.203(1), which provides that any provision in an agreement (whether a contract of employment or not) is void in so far as it purports to exclude or limit the operation of any provision of the 1996 Act or to preclude a person from bringing any proceedings under that Act before an industrial tribunal. That subsection is, however, made inapplicable by s.203(2)(d) to any provision of an agreement relating to dismissal from employment such as is mentioned in s.197( 1) or (3). S.197(1) allows an employer and an employee to contract out of the application of Part X where there is a dismissal from employment under a contract for a fixed term of one year or more if the dismissal consists only of the expiry of that term without it being renewed.
Unhappily there have been inconsistent interpretations of the statutory provisions in question, the Employment Appeal Tribunal in Housing Services Agency v Cragg [1997] I.C.R. 1050 at p.1055 rightly describing the state of the authorities as confused. The point has also divided commentators (compare Harvey on Industrial Relations D[126] with [1997] I.R.L.R. 657). The problem arises over extensions by agreement of the fixed term of a contract, the dismissal occurring on the expiry of the extended term. Is the contract governing the employment from which the employee is dismissed the varied contract and is it one for the extended fixed term? Or is the contract governing that employment the agreement by which the original fixed term is extended, the term of which is the extension only?
The facts can be stated shortly. The Respondent, Linda Kelly- Phillips, on 23 August 1993 agreed in writing to work for the Appellant, the BBC, as a temporary assistant in the Community Programme Unit. By clause 3 of the agreement the term was from 6 September 1993 to 5 March 1994 unless previously determined by a month's written notice on either side. The agreement provided:
"In so far as it is permitted by current employment legislation, non-renewal or non-extension of this engagement when its term expires shall not constitute grounds either for a claim of unfair dismissal or for any redundancy payment."
I shall call such a provision a "waiver clause".
Miss Kelly- Phillips took up that employment on 6 September 1993. On 10 January 1994 she was asked to agree to extend her fixed term contract beyond 5 March 1994 to 3 September 1994. She was asked to sign a copy of what the BBC called "a variant letter", by which clause 3 of the earlier contract was amended so that the term of her employment expired on 3 September 1994. She was told that the other provisions of her contract would continue in force, including her agreement to a waiver clause. On 17 January 1994 she signed an acceptance of that variation.
By a letter of 5 September 1994 the BBC offered her "a new fixed term contract of employment" as Assistant in the Disability Programme Unit from 4 September 1994 to 5 September 1995 inclusive. It was explained to her that she was being sent a new contract rather than extending her old contract because on the new contract she was eligible to join the Group Personal Pension scheme, and she was also eligible for severance payments after a qualifying period of 2 years' service. The terms again included a waiver clause. Miss Kelly- Phillips signed the contract on 20 September 1994. On 14 November 1994 she was told that her designation was to change to "Facilitator DPU" from that date and she signed an acceptance of that variation of her contract on 28 November 1994. Neither side regards that variation as significant.
On 23 August 1995 the BBC wrote to her, offering to "extend your fixed term contract beyond 5th September 1995 until 31st December 1995." In a second letter of the same date the Personnel & Training Manager said:
"I write to confirm that we would like to vary the provisions of your fixed term contract dated 4th September 1994 as follows:
"The term of your engagement shall now expire on 31st December 1995; clause 3 of your contract being amended to that effect.
The other provisions of your contract will continue in force, including your agreement that, in so far as it is permitted by current employment legislation, non-renewal of this engagement when its term expires shall not constitute grounds either for a claim of unfair dismissal or for any redundancy payment. I must emphasise that this variation does not imply that there is any prospect of your employment continuing beyond the expiry date of your fixed term contract or of your transfer to a pensionable staff contract."
Miss Kelly- Phillips on 30 August signed a form of acceptance: "On the terms and conditions set out above, I accept the variation of my fixed term contract dated 4th September 1994."
By letter dated 22 December 1995 the BBC wrote to Miss Kelly- Phillips to tell her that her contract would come to an end on 31 December 1995 and was not being renewed "because the question arose of the appropriateness of your approach to your position". Accordingly her dismissal took effect on the expiry of the term.
On 27 March 1996 Miss Kelly- Phillips applied to an Industrial Tribunal complaining of unfair dismissal. The BBC opposed that claim, relying on the fact that she had contracted out of claiming for unfair dismissal. The Industrial Tribunal in London (North) held a preliminary hearing on the issue, which it determined in favour of Miss Kelly- Phillips. It held that (1) at the time of her dismissal she was not engaged on a fixed term contract, (2) if wrong on that point, she was at the date of her dismissal engaged on a fixed term contract for a period of a little less than 4 months and so s.197(1) did not apply, and (3) the dismissal did not consist only of the expiry of the term of a fixed term contract without its being renewed. Accordingly her complaint of unfair dismissal could proceed.
The BBC appealed. The Employment Appeal Tribunal held that the Industrial Tribunal was wrong in the first and third of its holdings but right in its second holding and so dismissed the appeal. The BBC now appeals to this court.
It is convenient at this point to set out the relevant statutory provisions. S.197 (so far as material) is in the following form:
"(1) Part X does not apply to dismissal from employment under a contract for a fixed term of one year or more if—
(a) the dismissal consists only of the expiry of that term without its being renewed, and
(b) before the term expires the employee has agreed in writing to exclude any claim in respect of rights under that Part in relation to the contract.
….
(3) An employee employed under a contract of employment for a fixed term of two years or more is not entitled to a redundancy payment in respect of the expiry of that term without its being renewed (whether by the employer or by an associated employer of his) if, before that term expires, the employee has agreed in writing to exclude any right to a redundancy payment in that event.
(4) An agreement such as is mentioned in subsection ( 1) or (3) may be contained—
(a) in the contract itself, or
(b) in a separate agreement.
(5) Where—
(a) an agreement such as is mentioned in subsection (3) is made during the currency of a fixed term, and
(b) the term is renewed,
the agreement shall not be construed as applying to the term as renewed; but this subsection is without prejudice to the making of a further agreement in relation to the renewed term."
Two other provisions in the 1996 Act should be noted. One is that by s.235(1) "renewal", except in so far as the context otherwise requires, includes extension and any reference to renewing a contract or a fixed term is to be construed accordingly. The other is s.95(1)(b) by which for the purposes of Part X an employee is dismissed by his employer if, amongst other things,
"he is employed under a contract for a fixed term and that term expires without being renewed under the same contract".
It may be noted that the last 4 words are not to be found in s.197(1)(a). But it is not suggested that there is any difference in meaning between the reference in s.95(1)(b) to the expiry of the fixed term without being renewed under the same...
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