Judge v Crown Leisure Ltd

JurisdictionEngland & Wales
JudgeLADY JUSTICE SMITH,SIR MARTIN NOURSE,LORD JUSTICE MUMMERY
Judgment Date21 April 2005
Neutral Citation[2005] EWCA Civ 571
Docket NumberA2/2004/2192
CourtCourt of Appeal (Civil Division)
Date21 April 2005

[2005] EWCA Civ 571

IN THE SUPREME COURT OF JUDICATURE

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT

CIVIL DIVISION

(LORD JUSTICE PETER GIBSON)

Royal Courts of Justice

Strand

London, WC2

Before

Lord Justice Mummery

Lady Justice Smith and

Sir Martin Nourse

A2/2004/2192

Thomas Judge
Appellant
and
Crown Leisure Limited
Respondent

MICHAEL MULHOLLAND (instructed by Messrs Linder Myers) appeared on behalf of the Appellant

MR R CLEEVE appeared on behalf of the Respondent

Thursday, 21st April 2005

LADY JUSTICE SMITH
1

This is an appeal by Mr Thomas Judge from the decision of the Employment Appeal Tribunal (EAT) dismissing his appeal against the decision of an employment tribunal (ET) sitting in Manchester on 26th March 2004. The ET dismissed Mr Judge's claim that he had been constructively dismissed by his employers, Crown Leisure Limited, the respondent to this appeal.

2

The appellant was employed by the respondent as a Special Operations Manager. The respondent operates gaming and amusement machines in arcades and caravan sites in the north-west of England and North Wales. The appellant resigned from his position in June 2003 and alleged that he had done so because his employers had been in fundamental breach of his contract of employment by failing to honour a contractual promise to increase his salary to parity with another Special Operations Manager named Mr Mills. Mr Mills joined the respondent company in June 2001, on a transfer from a related company at a salary of £35,000 per annum plus bonus. This was considerably more than the salaries of the appellant or either of the other two Special Operations Managers. It was common ground before the ET that, soon after Mr Mills' arrival, Mr Fannon, the respondent's Special Operations Director, told the three long-established Special Operations Managers that it was the company's intention, in due course, to bring the remuneration of all four Special Operations Managers roughly into line. What was not common ground was the appellant's contention that, at the respondent's Christmas party, held for staff and their spouses and partners at the Savoy Hotel, Blackpool in December 2001, Mr Fannon had explicitly promised the appellant that he would put him onto the same salary scale as Mr Mills within two years. Mr Fannon denied that any such conversation had taken place. He also said that he would never enter into a contractual discussion at a social event when there were others present and alcoholic drink had been consumed. The ET had to resolve that conflict of evidence.

3

Other evidence before the ET showed that, in April 2002, the appellant had been told that his salary would be increased by 1.5% and that he would receive a bonus of £5,000. That increase would not bring him into parity with Mr Mills. The appellant tendered his resignation on 30th May 2002, but, following discussions with Mr Fannon in which he was offered a further £5,000 bonus, bringing his total remuneration for that year to about £34,000, he agreed to stay on.

4

On 31st May 2002 Mr Fannon wrote a letter to the appellant, in which he said:

"As regards the verbal promises, you are right that they are as meaningful as written ones. They certainly are to me and I feel deeply embarrassed that I cannot keep them as promptly as I would like."

5

The ET expressed the view that the use of the word "promises" in that letter did not mean that Mr Fannon was acknowledging a legally binding contractual commitment, but was merely reiterating his intention to bring the appellant roughly into parity with Mr Mills in due course.

6

The appellant then worked on until June 2003, when he learned that, in that year's pay round, his salary would be increased by 2.5%. Even with bonuses, his remuneration would still be well short of Mr Mills' pay package, which, by this time, was worth about £43,000. The appellant told Mr Fannon that he intended to resign. The two men met and Mr Fannon explained that, with this increase and the substantial bonuses the appellant received, he had done as much as he then could towards the overall objective of eventual parity with Mr Mills. This time the appellant did not withdraw his resignation but left and commenced proceedings alleging constructive dismissal.

7

At paragraph 9 of its decision, the ET referred to the appellant's contention that Mr Fannon had entered into a legally binding agreement to ensure that the appellant would be placed on the same salary as Mr Mills. They then set out the proposition of law upon which they were to base their eventual decision. They said this:

"As a matter of general contract law, in order for there to be a legally binding and enforceable contractual commitment, there must be certainty as to the contractual commitment entered into, or alternatively facts from which certainty can be established. Otherwise, a 'promise' amounts to nothing more than a statement of intention."

8

Then, also in paragraph 9, they observed that, in support of his case, the appellant relied on the words allegedly spoken by Mr Fannon at the Christmas party in December 2001. It was apparent that unless the appellant's version of that event was substantially accepted, the appellant could not succeed. Mr Fannon's other utterances, including the content of his letter of 31st May 2002, did not amount to contractual promises and were no more than statements of intention.

9

In the event, the ET did not accept the account of the Christmas party given by either the appellant or Mr Fannon. They rejected Mr Fannon's denial that nothing at all had been said about remuneration, but they also rejected the appellant's claim that Mr Fannon had given him an explicit promise of parity within two years. They said:

"However, on the balance of probabilities, the Tribunal found that there may well have been some casual conversation in which Mr Fannon, in the convivial spirit of the evening, gave the applicant words of comfort and assurance that he would eventually fulfil his commitment to have all Operations Managers, including the applicant, on roughly the same level of remuneration. The Tribunal was not, however, satisfied that Mr Fannon, particularly in an environment such as that described above, either would have or indeed did enter into any legally binding contractual commitment to the applicant whatsoever."

10

In the light of that finding, the ET concluded that there had never been a legally binding commitment by Mr Fannon on behalf of the respondent to bring about parity with Mr Mills within any particular time scale. Accordingly, the respondent had not been in fundamental breach of contract in failing to bring about parity by June 2003. The appellant had not been constructively dismissed; he had resigned and his claim for compensation failed.

11

Before the EAT, the appellant submitted first that the ET's finding of fact about what was said at the Christmas party was perverse. The ET, it was said, had not been entitled to find facts for which neither party had contended. They were bound to accept the account of one or other of the two witnesses. Second, the appellant contended that there had been a procedural irregularity, rendering the conduct of the hearing...

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