Hennessy v Craigmyle & Company Ltd
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE PARKER,LORD JUSTICE WOOLF |
| Judgment Date | 22 May 1986 |
| Judgment citation (vLex) | [1986] EWCA Civ J0522-5 |
| Docket Number | 86/0501 |
| Court | Court of Appeal (Civil Division) |
| Date | 22 May 1986 |
[1986] EWCA Civ J0522-5
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
Royal Courts of Justice,
The Master of the Rolls
(Sir John Donaldson)
Lord Justice Parker
and
Lord Justice Woolf
86/0501
Case No. EAT/424/84
and
MR ALAN TYRRELL. Q.C. and MR D. RICHARDSON (instructed by McCaws, Solicitors, Harpenden, Herts) appeared on behalf of the Appellant.
MR R. LEMON (instructed by James Collett, Esq., Solicitor, Croydon) appeared on behalf of the Respondents(First Defendants).
MR R. JAY (instructed by The Treasury Solicitor) appeared on behalf of the Respondents (Second Defendants).
Craigmyle & Company Limited are professional charity fund raisers who employed Mr Hennessy, first as an appeals director and later as a creative director, in which capacity he designed brochures. Unfortunately on 10th November 1983 they fell out, to use a neutral term. On 18th November 1983, Mr Hennessy, having been advised by his solicitor and by Mr Blyth, a Conciliation Officer of A.C.A.S., signed an agreement whereby he accepted a lump sum and the continuation of certain fringe benefits for a limited period "in full and final settlement of all claims which the applicant could bring against the respondent before an Industrial Tribunal or Writ arising out of the termination of his employment".
Mr Hennessy thereafter applied to an Industrial Tribunal, claiming compensation for unfair dismissal. His employers set up the agreement as a defence to the claim, but Mr Hennessy replied that it was void under Section 140 (1) of the Employment Protection (Consolidation) Act, 1978, and also voidable at common law as having been reached under economic duress. The employers denied that there had been any economic duress, and further said that the operation of Section 140 (1) was excluded by Section 140 (2) (d), since the agreement had been made "where in compliance with a request under Section 134 (3) a conciliation officer has taken action in accordance with that section".
The Industrial Tribunal held that Mr Hennessy was not under a sufficient degree of economic duress when he signed the agreement to enable him to avoid it, and that the effect of Section 140 (1) was excluded by Section 140 (2) (d). Mr Hennessy appealed unsuccessfully to tlie Employment Appeal Tribunal, and now appeals to this Court, by leave of this Court granted largely because of the novelty of the argument and its potentially far-reaching consequences.
The facts, as found by the Industrial Tribunal, are set out in paragraph 3 of its Reasons:
"The applicant was interviewed by the respondents' chairman and managing director on 10 November 1983 when he was told that it had been decided he would be summarily dismissed, that his pay would stop, he would lose the use of his car and he would get no reference. He was then told there was an option that he would be made redundant with a payment of £3,810 plus his salary for November and that he could retain the use of the car until the end of January 1984 and private health insurance until April 1984. This option was available provided he signed, at 10.30 a.m. the following Thursday morning a document to be prepared by A.C.A.S. following this interview an appointment was arranged by the respondents with a Conciliation Officer for that time in the respondents' office. The applicant was informed by the respondents that the Conciliation Officer who would deal with the case was Mr Blyth and he was given Mr Blyth's telephone number. The applicant took legal advice and effectively his solicitor told him that unless he was prepared to wait for three months for a claim of unfair dismissal to be heard by a tribunal he would be a fool if he did not sign the document. There were a number of conversations between the applicant and Mr Blyth who impressed the applicant with his fairness. He understood the implications of signing the document, the terms of which he fully understood although he did not see it (A3) until it was presented to him by Mr Blyth at his home on 18 November 1983. The applicant had made a number of suggestions to Mr Blyth as to the terms and these were passed on to the respondents but their response to Mr Blyth was that the applicant had to sign by 10.30 a.m. on Thursday and if he did not he would be summarily dismissed. He agreed that Mr Blyth was very fair, honest and conscientious and he had no criticism whatsoever of the way the matter was handled by Mr Blyth. He signed the document because the alternative was penury and he had no means of living unless he signed. He understood from advice that in the circumstances the agreement might not hold up in law and he might be able to take further legal action. The applicant's dismissal for 'redundancy' took effect when he signed the documents on 18 November 1983 (the document is dated 17 November 1983 but the Tribunal understood that the signing actually took place on Thursday 18 November 1983)".
The purpose of Section 140, read with Section 134 of the 1978 Act, is undoubtedly to ensure that employees shall not surrender their rights without first receiving independent advice and assistance from skilled conciliation officers of A.C.A.S. Nevertheless, it does not follow that such intervention will, in all circumstances, eliminate the possibility that duress was such as to amount to a coercion of will vitiating consent, which is the basis of economic or physical duress as a ground for avoiding a contract. It must, however, make the possibility more remote. Accordingly I agree with both the Industrial Tribunal and the Employment Appeal Tribunal that we are concerned to consider both Section 140 and economic duress.
Section 140, so far as material, is as follows:
"Restrictions on contracting out.
(1) Except as provided by the following provisions of this section, any provision in an agreement (whether a contract of employment or not) shall be void in so far as it purports—
(a) to exclude or limit the operation of any provision of this Act; or
(b) to preclude any person from presenting a complaint to, or bringing any proceedings under this Act before, an industrial tribunal.
(2) Subsection (l) shall not apply—
(d) to any agreement to refrain from presenting a complaint under section 67, where in compliance with a request under section 134 (3) a conciliation officer has taken action in accordance with that subsection".
This takes us to Sections 67 and 134 which, again so far as is material, provide as follows:
"67. Complaint to industrial tribunal.
(1) A complaint may be presented to sin industrial tribunal against an employer by any person (in this Part referred to as the complainant) that he was unfairly dismissed by the employer.
(4) An industrial tribunal shall consider a complaint under this section if, where the dismissal is with notice, the complaint is presented after the notice is given notwithstanding that it is presented before the effective date of termination and in relation to such a complaint the provisions of this Act, so far as they relate to unfair dismissal, shall have effect—
(a) as if references to a complaint by a person that he was unfairly dismissed by his employer included references to a complaint by a person that his employer has given him notice in such circumstances that he will be unfairly dismissed when the notice expires;
(b) as if references to reinstatement included references to the withdrawal of the notice by the employer;
(c) as if references to the effective date of termination included references to the date which would be the effective date of termination on the expiry of the notice; and
(d) as if references to an employee ceasing to be employed included references to an employee having been given notice of dismissal".
Then:
"134. Functions of conciliation officers on complaint under s. 67.
(1)Where a complaint has been presented to an industrial tribunal under section 67 by a person (in this section referred to as the complainant) and a copy of it has been sent to a conciliation officer, it shall be the duty of the conciliation officer—
(a) if he is requested to do so by the complainant and by the employer against whom it was presented, or
(b) if, in the absence of any such request, the conciliation officer considers that he could act under this section with a reasonable prospect of success,
to endeavour to promote a settlement of the complaint without its being determined by an industrial tribunal.
(2) For the purpose of promoting such a settlement, in a case where the complainant has ceased to be employed by the employer against whom the complaint was made—
(a) the conciliation officer shall in particular seek to promote the reinstatement or re-engagement of the complainant by the employer, or by a successor of the employer or by an associated employer, on terms appearing to the concilation officer to be equitable; but
(b) where the complainant does not wish to be reinstated or re-engaged, or where resinstatement or re-engagement is not practicable, and the parties desire the conciliation officer to act under this section, he shall seek to promote agreement between them as to a sum by way of compensation to be paid by the employer to the complainant.
(3) Where—
(a) a person claims that action has been taken in respect of which a complaint could be...
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