Grewals (Mauritius) Ltd v Koo Seen Lin (Mauritius)
| Jurisdiction | UK Non-devolved |
| Judge | Lord Hughes |
| Judgment Date | 05 May 2016 |
| Neutral Citation | [2016] UKPC 11 |
| Docket Number | Appeals No 0037 of 2014 and 0038 of 2014 |
| Date | 05 May 2016 |
| Court | Privy Council |
[2016] UKPC 11
Privy Council
Lady Hale
Lord Kerr
Lord Hughes
Appeals No 0037 of 2014 and 0038 of 2014
Appellant
Patrice Doger de Spéville SC Ravi Bhookhun (Instructed by Blake Morgan LLP)
Respondent
Antoine Domingue SC Yasser Caunhye (Instructed by M A Law (Solicitors) LLP)
The claimant Koo Seen Lin ("KSL") brought an action against his former employers, Grewals Mauritius Ltd ("Grewals") in relation to his dismissal from his post as General Manager of their timber business. The issues which arose before the Industrial Court and subsequently on appeal before the Supreme Court were:
(i) had he been constructively dismissed during March 2002 (as he contended) or dismissed by letter of dismissal dated 22 April 2002 (as Grewals contended)?
(ii) had he been guilty of misconduct justifying dismissal? and
(iii) was he entitled to severance pay, and if so at the standard or the punitive rate, and based upon what contractual remuneration?
Both the Industrial Court magistrate and the Supreme Court answered the first question by holding that he had been constructively dismissed during March 2002, thus before the letter of dismissal dated 22 April 2002.
The Industrial Court magistrate held that of the some 20 charges of misconduct levelled by Grewals, none of them were made out. But on appeal the Supreme Court, whilst upholding many of his findings, held that some six complaints afforded Grewals justification for dismissal. It concluded that even if the full extent of Grewals' accusations were not proved, KSL had been guilty of conduct amounting to abusive use of his position as General Manager by way of favouring a separate company called Jadis Ltd which was owned by his son. In some instances that was the conclusion even on his own case.
On the findings of the Industrial Court, severance pay at the punitive rate followed. On the different conclusions of the Supreme Court, that court held that severance pay only at the standard rate was justified.
There have now been cross-appeals by the parties to the Board as follows:
(a) Grewals appeal against the finding of constructive dismissal;
(b) KSL appeals against the conclusion that his conduct justified dismissal;
(c) separately KSL challenges the conclusion that severance pay at the standard rate was all that he was entitled to;
(d) Grewals concede that if, contrary to their principal argument, there was constructive dismissal, then severance pay at the standard rate follows, but they contend that the Supreme Court miscalculated the remuneration package on which it should be based because it did not apportion the value of a company car as between private and work use.
KSL had been employed by Grewals since 1978. He had begun as an accountant but had progressed to General Manager by 1996. In 2001/2002 the newly in post Chairman of the company became concerned about a number of allegations which reached him anonymously and about what he himself saw of KSL's methods of work. He commissioned an investigation by forensic investigators. On 22 February 2002, he suspended KSL from his position. On the same day KSL was interviewed about complaints then known. The chairman set up a Disciplinary Committee chaired by Queen's Counsel, to consider the evidence. The investigators reported to him on 8 March 2002, concluding that KSL had misconducted himself in a number of ways. On 19 March some 18 complaints were formulated for KSL to answer, and two more were added on 26 March. The Disciplinary Committee began its sittings on 27 March, and on both that date and on 9 April KSL was present, legally represented, before it.
Whilst this was going on, the chairman of Grewals wrote on 14 March 2002 to a number of its suppliers with whom KSL was in the habit of dealing. The letters were some in French and some in English. The relevant part of the English language letters was in these terms:
"We hereby inform your company that Mr Georges Koo Seen Lin no longer holds a managerial position within our organisation. Any dealings he may conduct with your company will be in his own personal capacity."
The French text was to similar effect but a little more explicit:
"Nous tenons à vous informer que Monsieur G Koo Seen Lin n'occupe plus le poste de Directeur General de Grewals (Mauritius) Ltd. Toutes transactions qu'il pourrait avoir avec votre compagnie serait en son nom personnel."
Also in the meantime, Grewals had written to KSL on 6 March stopping his right to be supplied by a local garage with petrol on the firm's account. The letter told him that the firm took the view that he had been abusing the petrol account, and had used Rs.13,080 for February, when, in its contention, only Rs.4,000 per month was reasonable. A separate letter told the garage to stop supplies to the firm's vehicles, but gave no more information about the reason.
At a similar time, Grewals cancelled the credit account for the mobile telephone issued to KSL.
By 16 April 2002 KSL and his lawyers had become aware of the letters to the firm's suppliers. On that day, when a further hearing of the Disciplinary Committee was planned, his lawyers wrote to Grewals saying that it was plain that a decision had been made to dismiss him, that the Disciplinary Committee was in consequence a sham and that KSL declined to take any further part in it. Grewals responded by letter saying that there had been no dismissal, but simply a suspension.
The committee continued to sit, but without any participation by or on behalf of KSL. In due course it reported that he had been guilty of serious misconduct. On 22 April Grewals wrote to KSL a letter dismissing him for gross misconduct.
Although that letter was written on 22 April, no salary payment for April was made to KSL at the end of that month. When, sometime later at about the beginning of September, Grewals came to make a return to their pension providers they entered against KSL's name "cancelled 31/3/2002".
KSL relies upon the letters to the suppliers, the stopping of the petrol account, the mobile telephone cancellation, the failure to pay his salary for April and the pension return as demonstrating that Grewals repudiated the contract of employment.
KSL contended before the Board that the conclusions of the courts below that there had been constructive dismissal amounted to concurrent findings of fact, with which the Board ought not, in accordance with its usual practice, to interfere. That is not, however, the right approach. The primary facts were not significantly in dispute. Whether they amounted to constructive dismissal or not was a matter not of fact but of the legal consequences of the facts.
However, in the view of the Board, the conclusion of both courts below that Grewals had committed a repudiatory breach of the contract of employment was entirely justified, if not indeed inevitable. When constructive dismissal is in question, the acid test is not whether the employer intended to dismiss; it is whether he has by his conduct, objectively judged, repudiated the contract. If he has, the employee is entitled, by accepting the repudiation, to treat the conduct as constructive dismissal.
The stopping of the petrol and mobile telephone accounts were not necessarily indicative of repudiatory behaviour by Grewals. Both actions might well have been concomitants of mere suspension of KSL. Moreover, the stopping of the petrol account was in terms for over-use, rather than on the basis that his employment was thenceforth at an end.
The non-payment of salary at the end of April came after KSL had in any event been dismissed by the letter of 22 April. Likewise, the return to the pension providers in September came far too late to constitute an act of repudiation. Both, however, are of some relevance to the extent that they are capable of demonstrating that Grewals thought that KSL's employment had been ended not on 22 April but on 31 March, and thus that they had intended to dismiss him by that earlier date. Although an intention to dismiss is not a necessary part of an employer's repudiatory conduct before it can amount to constructive dismissal, if such intention exists it is plainly material to the question whether such repudiatory conduct has taken place.
But the crucial fact here lay in the letters to Grewals' trading partners. The Board entirely understands that it was necessary to tell such people, who were accustomed to treating KSL as the voice of Grewals, that he no longer had the authority he had hitherto enjoyed. That is particularly so given the manner in which, as will be seen, he had been using his position to favour Jadis Ltd. But that does not answer the question whether what was done amounted to a repudiatory breach by Grewals of the contract under which they employed KSL. It is true that the letters were not sent to KSL, but that does not matter if they demonstrate repudiatory conduct. It may be true, as Grewals submit, that the chairman was not a lawyer and that in writing he might not have expressed himself as clearly as he ought to have done. But the question is whether the ordinary non-lawyer businessman, reading these letters, would understand that KSL had been dismissed. It is not necessary to be a lawyer to understand the difference between suspension and dismissal. The letters really bear only one interpretation. That is that KSL, hitherto employed as General Manager, no longer is. The French text made it particularly clear by speaking of his no longer occupying the post to which he had previously been appointed. In other words, his contract as General...
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