Garratt v Mirror Group Newspapers
| Jurisdiction | England & Wales |
| Judge | Lord Justice Leveson,Lord Justice Pitchford,Lord Justice Ward |
| Judgment Date | 13 April 2011 |
| Neutral Citation | [2011] EWCA Civ 425 |
| Date | 13 April 2011 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: B2/2010/1695 |
[2011] EWCA Civ 425
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE MAYORS AND CITY OF LONDON COUNTY COURT
His Honour Judge Birtles
9MY00170
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Ward
Lord Justice Leveson
and
Lord Justice Pitchford
Case No: B2/2010/1695
Andrew Short QC and Naomi Ling (instructed by Leigh Day & Co, London) for the Appellant
Clive Freedman QC and Daniel Northall (instructed by DLA Piper UK LLP, Manchester) for the Respondent
Hearing dates: 24 March 2011
On 1 January 1989, Geoffrey Garratt commenced employment with Mirror Group Newspapers Ltd ("MGN") as a photographer working on the Sunday Mirror, having previously been engaged on a casual basis. With effect from 4 February 2006, he was dismissed by reason of redundancy and became entitled to an appropriate redundancy payment. He claimed what has been described as an enhanced redundancy payment of two weeks' pay for each year of service (in contradistinction to the statutory entitlement calculated in accordance with the Employment Rights Act 1996). He contended that he was entitled to such a payment as a consequence of a Collective Agreement dated 22 August 2002 reached between the British Association of Journalists ("BAJ"), being the union of which he was a member, and MGN and which was incorporated into his current individual contract of employment (dated 21 October 2005).
MGN was prepared to offer Mr Garratt an enhanced redundancy payment but only on the basis that he signed a termination or compromise agreement (to which I shall refer only as a "compromise agreement") to the effect that he accepted the payment in full and final settlement of all claims against MGN and its employees "howsoever arising, in connection with [his] employment and/or its termination" except for claims arising out of the agreement itself, or in respect of accrued pension rights or personal injury claims (subject to a warranty that he was not aware of any personal injury claims). Because of issues outstanding between Mr Garratt and MGN, Mr Garratt was not prepared to sign that agreement with the result that MGN was only prepared to pay the statutory entitlement. This amounted to a sum of £30,192 (before tax) less than he would have received under the Collective Agreement. These proceedings are his attempt to recover that sum by way of damages for breach of contract.
Having heard evidence over three days at the Mayors and City of London Court, in a reserved judgment, His Honour Judge Birtles held that the entitlement to an enhanced redundancy payment was subject to an implied condition that it was payable only on receipt of a signed compromise agreement and, thus, he dismissed the claim. With the leave of Sir Richard Buxton, Mr Garratt now appeals to this court. MGN contends that the appeal is misconceived but, additionally, has served a respondent's notice in relation to the legal analysis which forms part of the judgment.
The Facts
The judge heard evidence from Mr Garratt, Mr Arnold Slater (another photographer employed by MGN), and from the General Secretary of the BAJ (Mr Steve Turner). For MGN, the relevant Human Resources Director, Mr Nick Budd, and the Human Resources Manager, Ms Jill Harrison, (neither of whom continued to be employed by MGN) also gave evidence. For comprehensive and well explained reasons (which are not challenged), the judge accepted the evidence of the latter two witnesses and rejected (where inconsistent) that were called on behalf of Mr Garratt.
The history can be shortly summarised. Over the years, as MGN has declared employees redundant, it has offered to pay more than the statutory entitlement on the basis that the total package is accepted in full and final settlement: this approach was not included within any contract of employment. Thus, following the commencement of his employment, Mr Garratt received fresh contracts of employment (which contained nothing about selection for redundancy or redundancy payments) on 18 August 1997 and 21 October 2005. Meanwhile, on 10 January 2002, BAJ was recognised by MGN and negotiated on behalf of its members (including Mr Garratt). Following that recognition, an agreement was negotiated in relation to collective bargaining which included the term:
"The union has the sole bargaining right to negotiate the pay, hours and holidays for the above bargaining group and for no other areas of the relationship between the company and its employees."
The employment contract of 21 October 2005 contained a reference to this recognition agreement.
On the face of it, there was nothing in the collective agreement which gave the BAJ any bargaining rights over the terms and conditions of any redundancy payment but, from the outset, both BAJ and MGN entered into discussions in relation to this issue and, for his part, there is no suggestion that Mr Garratt was not entirely content that they did so: he said that he relied on the union to advise him about his employment rights "95% if not 100%".
There were notes of the discussions between Mr Turner and Mr Budd on this issue running from 16 January 2002 to 10 April 2002 and beyond which included the following:
i) On 6 February 2002, it was recorded in the minutes of a meeting that:
"current redundancy formula is difficult to understand. BAJ not averse to linking the issue of notice periods with redundancy. Seeking reasonable redundancy terms. Prior consultation with FOCs regarding redundancy would help to build the union/company relationship."
ii) On 25 February 2002, in a written response to the claim made by BAJ, MGN observed that "as for redundancy payments the present terms are a direct result of the long notice periods offered to staff employed prior to December 1992" but expressed a wish for "a simplified system".
iii) On 7 March 2002, an action point was noted to the effect "Review Redundancy Formula and [Mr Budd] to put a proposal forward" which he did because, on 10 April 2002, Mr Turner welcomed the proposal to simplify the formula, but expressed concern about a weakness in the system, suggesting an alternative.
The resulting Collective Agreement was dated 22 August 2002 and constituted an agreement to "changes to the terms and conditions of employment". It contained the following provisions as to redundancy:
"In the event that it is necessary to make compulsory redundancies within the recognised bargaining group, the following payments will be made.
For every completed year of service, on the day the contract ceases a payment of two weeks' basic pay will be made. This will include all the entitlements to statutory payment.
The minimum payment will be one month's salary.
The total amount of money that can be paid will be capped at 18 months money; this will include any pay in lieu of notice monies, where this is paid.
In most cases, the first £30,000 (at the time of signing) will be tax-free, however it is recognised that this is subject to approval by the Company's Tax Department and the Inland Revenue. The Company will not compensate for any tax that is deemed payable on the first £30,000.
Those individuals who are in receipt of two years' notice periods will in the event of redundancy continue to receive the redundancy terms that were in force prior to this agreement."
Although there is no reference in the minutes or any of the documents to the need to sign a compromise agreement accepting payment in full and final settlement, the evidence of Mr Budd and Ms Harrison on this topic, which was unshaken in cross-examination, was clear. Thus, Mr Budd accepted that he did not recall discussing the mechanics of redundancy or the compromise agreement but said:
"I am certain that there was no reason to as the company had always made clear that it required the signing of a compromise agreement. The BAJ was fully aware of this from past practice and general discussions and therefore this was not an issue. The practice of requiring a compromise agreement was so well established that there was no need to discuss this….
The BAJ at no time queried the use of compromise agreements either during the discussions regarding redundancy payment levels or following the 2002 agreement when the payments were applied. The purpose of using a compromise agreement is to bring matters out onto the table and ensure that they are resolved in exchange for an enhanced redundancy package and therefore the company would never have agreed to enhanced payments without a compromise agreement."
When he was cross examined, it was suggested to Mr Budd that his evidence that the fact that there was a requirement to sign a compromise agreement was an assumption only. He said that it was "very well known among the journalist population and, in fact, the wider MGN population". He went on:
"They knew they had to sign a compromise agreement. That was generally talked about, you know between members of the journalist community"
To the proposition that this had been denied by Mr Garratt and his witnesses he added:
"Sorry, you are talking about journalists here. That is just not believable. They talk to each other all the time. That's what they do. It's their stock in trade."
Mr Budd also made the point that it was common for BAJ members to use BAJ solicitors (at the expense of MGN) to provide advice on compromise agreements and that at no time did the solicitors, BAJ or any employee query the requirement for a compromise agreement. He went on:
"[T]here were existing arrangements in relation to the mechanics of redundancies and the signing of a compromise agreement as a matter of standard practice and universal application. This did not change the signing of the recognition agreement nor was it intended...
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