Gothard v Mirror Group Newspapers Ltd
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE GLIDEWELL,LORD JUSTICE STAUGHTON |
| Judgment Date | 30 June 1988 |
| Judgment citation (vLex) | [1988] EWCA Civ J0630-2 |
| Docket Number | 88/0566 |
| Court | Court of Appeal (Civil Division) |
| Date | 30 June 1988 |
[1988] EWCA Civ J0630-2
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CLERKENWELL COUNTY COURT
(ASSISTANT RECORDER PROFESSOR BRENDA HOGGETT)
Royal Courts of Justice
The Master of the Rolls
(Lord Donaldson)
Lord Justice Glidewell
Lord Justice Staughton
88/0566
MR PATRICK ELIAS, instructed by Messrs Nicholson Graham & Jones, appeared for the Appellants (Defendants)
THE RESPONDENT (PLAINTIFF) appeared in Person.
In November 1985 Mr Robert Maxwell, the publisher, came to the conclusion that the defendants, Mirror Group Newspapers ("M.G.N."), were overmanned and prescribed drastic remedies. Either the work force was reduced by 2,000 before the end of the year or M.G.N. would perish. In particular his diagnosis pointed to gross overmanning in the managerial sector, to which the plaintiff, Mr Frank Gothard, belonged—500 managers, or one manager for each 12 employees.
Mr Maxwell's prescription contemplated that the slimming target would in the main be achieved by voluntary early retirements. In a circular letter dated 12th November 1985 he explained his policy and gave examples of the financial arrangements available, which he described, possibly correctly, as being "generous and fair". The letter invited the addressees to apply for details of the benefits available in their individual cases, but the response was said to have been so overwhelming that it was decided instead to dispense with applications and to give every employee the information relevant to his own circumstances. So it came about that by a letter dated 28th November 1985 Mr Gothard was offered a choice of three different pensions (two of them taking effect "from the day after you leave the company" and one from his "normal retirement date") and a "tax free lump sum payment" said to be twice the Government's statutory rate for someone of his age and service. The letter added "Your period of notice is 6 months (+ 7 weeks). A payment in lieu will be made for any unworked notice at the date of termination." The parenthetical addition was made in manuscript.
The dispute between the parties concerns this "payment in lieu". What Mr Gothard was in fact paid was a sum equal to half his gross annual salary, i.e. it was based upon a six months' period of notice rather than six months + seven weeks. Mr Gothard contended that what he had been offered and what he had accepted was a lump sum calculated by reference to the longer peiod. As will appear, this comparatively simple and straightforward dispute was to become much less simple and straightforward.
Failing satisfaction of his claim, Mr Gothard started proceedings in the Clerkenwell County Court against M.G.N. for £3,109.33, being the difference between what he had been paid and that to which, in his view, he was entitled, together with interest, which he quantified at £659.33 from the date of his retirement (1st January 1986) until 31st May 1987, a total of £3,768.66. Initially M.G.N. denied liability solely upon the grounds that the seven week extension was referable to ah agreement made on or about 1st March 1978 between M.G.N. and the T.A. & E. Management Chapel of SOGAT, that the plaintiff was not a party to the agreement, that the agreement was not intended to be contractually enforceable by Mr Gothard or his union and that its provisions were not incorporated into Mr Gothard's contract of employment which provided for six months' notice and no more. M.G.N. added that Mr Gothard was not dismissed, but volunteered for redundancy and that the agreement did not apply to voluntary redundancy.
So far as it goes, this defence might well have succeeded, because, as is well known, collective agreements with trade unions are usually "binding in honour only", although I have to say that "honour" usually constrains employers as effectively as does the law. However, the defence did not address itself to the true basis of Mr Gothard's claim, which was an allegation of a distinct offer made by M.G.N. to him personally, whose origin was quite immaterial.
This point must have occurred to someone on the M.G.N. side, for later the defence was withdrawn and a second wholly different defence substituted by amendment. It was a lengthy and highly technical document involving such somewhat unlikely concepts, in an industrial relations context, as that an offer to an employee of terms for voluntary redundancy is an offer to treat, that his "acceptance" is to be viewed in a similar light and that it is only when money or money's worth actually changes hands that there is a legally binding agreement, such agreement being in terms consistent with whatever the employer has in fact provided. Hidden away was an allegation which allowed the real issue to be raised, namely, whether the offer contained in the letter of 28th November 1985 had been withdrawn or varied, substituting a period of six months for that of six months + seven weeks before it had been accepted by Mr Gothard. The amended defence also, for the first time, raised the question of whether the "payment in lieu" was to be calculated by reference to gross pay or, as M.G.N. now claimed, by reference to gross pay less tax and national insurance contributions or alternatively gross pay less tax, no deduction being made for national insurance.
The action was heard on 25th November 1987 by Assistant Recorder Professor Brenda Hoggett who found in favour of the plaintiff and gave judgment for £3,768.66 plus interest from 1st January 1986. No point was taken either here or below as to whether this was the right figure, but it seems to me likely that, by a slip, Mr Gothard has been awarded interest on interest and that the date should have been 1st June 1987. We will, if necessary, hear the parties on this aspect.
In concluding that Mr Gothard was entitled to a "payment in lieu" calculated by reference to six months + seven weeks, the learned judge found as a fact that the variation of the offer reducing the period to six months never came to Mr Gothard's attention before he accepted the original offer contained in the letter of 28th November 1985. That...
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...accords with basic principle, and with enunciations of that principle made in cases such as Gothard v. Mirror Group Newspapers Ltd. [1988] I.C.R. 729, 733, per Lord Donaldson of Lymington M.R. To avoid confusion I shall refer to this type of claim as a claim for damages for wrongful 21The t......
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