Silvey v Pendragon Plc
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE CLARKE,MR. JUSTICE BELL,LORD JUSTICE THORPE |
| Judgment Date | 09 May 2001 |
| Neutral Citation | [2001] EWCA Civ 784 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | A1/002615 |
| Date | 09 May 2001 |
[2001] EWCA Civ 784
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
Royal Courts of Justice
Strand
London WC2
Lord Justice Thorpe
Lord Justice Clarke
Mr. Justice Bell
A1/002615
MR. D. TATTON-BROWN (instructed by Messrs Fynn & Partners, Bournemouth, Dorset) appeared on behalf of the Appellant.
MR. G. PRICHARD (instructed by the Legal Department, Retail Motor Industry Federation) appeared on behalf of the Respondent.
1. The appellant is Maurice Silvey. By November 1997 he had some 38 years of service with the respondent or its predecessors who were motor dealers in Dorset. On 6th November 1997 a Ms Beverley Packwood, who is described in the letter as a dealer principal, wrote to him on behalf of English Ford. It is common ground that the letter was written on behalf of his employer who at that time was the respondent. The letter included the following:
“Further to our recent discussions, we write to confirm the following.
It is with great regret that we must terminate your employment with immediate effect on the grounds of redundancy. In pursuance of the 1978 Employment Protection (Consolidation) Act you are entitled to 12 weeks notice, for which payment will be made in lieu of your working. This equates to £3668.71.”
2. The letter added that he was entitled to redundancy pay of £5565.00 based on his age and experience. He was born on 18th November 1942 and was thus 54 years of age. His employment had begun on 8th June 1959. Those facts were said to entitle him to 26.5 weeks redundancy pay. The letter concluded:
“You are also owed 13 days holiday pay which equates to £945.00 (less deductions). There are no details in your personnel file concerning any holiday pay owing from your initial year's employment. If you have any details in writing regarding this, please provide us with a copy in order that we may calculate the necessary payment.
The payment that the company would make in lieu of your having use of a company car during the notice period would be £282.75. The management are extremely regretful that your employment had to be terminated in this manner, considering the contribution you have made to our company during your valued service .”
3. The only response to the letter which we have seen is a note dated 10th November 1997 signed by the appellant, which refers only to the paragraph in the letter of 6th November about the car and simply says:
“I confirm that I do not accept the above offer and choose to keep the use of the company car during my notice period.”
It appears that the respondent subsequently paid the sums referred to in the letter which the appellant retained.
4. The appellant was 55 on 18th November 1997 which was only 12 days after the date of the letter. If he had remained in the respondent's employment until then, he would have been entitled to accrued pension rights which it is agreed amounted or would have amounted to £5788.57 more than he in fact received. He subsequently made a number of claims against the respondent in an Employment Tribunal. The only one with which we are directly concerned is a claim for the sum of £5788.57 in respect of lost pension rights which were claimed by way of damages for breach of contract. The appellant did not return to work after receiving the letter which was handed to him on the same day, namely 6th November. As indicated in the letter, he thereafter received £5565 by way of redundancy payment, £3668.71 by way of pay in lieu of notice and £945 by way of holiday pay less statutory deductions.
5. The Employment Tribunal first made a decision on 11th August 1998, after a four day hearing, in which it considered the claims of a number of applicants. It conducted a review and issued a further decision dated 12th April 1999. It is only that decision with which the subsequent appeal to the Employment Appeal Tribunal and this appeal are concerned. The Employment Tribunal held that the sum of £3668.71 had been miscalculated. It held that the basic calculation of the appellant's pay was wrong by some £27 and that it failed to take account of his right to a bonus. In the result, it held that his pay, including his bonus, in lieu of the 12 weeks' notice, should have been £950.51 or, say, £950 more. It also held that he should have received a further £105 by way of redundancy payment. As a result, it ordered the respondent to pay both those further sums to the appellant.
6. The Employment Tribunal, however, rejected his claim in respect of his pension rights, although it held that the respondent was in breach of contract. The Employment Tribunal expressed its conclusions in this way in paragraphs 9 and 10:
“9. The respondents do not dispute that there was a transfer of an undertaking from Lex to them so as to preserve the continuity of Mr Silvey's contract of employment. We find that they were in breach of that contract by failing to give Mr Silvey his notice entitlement or make payment in lieu of such entitlement to him when they dismissed him on 6 November 1997. They made him a payment in lieu of notice and miscalculated it. Had they made a correctly calculated payment, Mr Silvey would still have been dismissed on 6 November and their breach of contract has no effect upon that termination date.
10. We have sympathy with Mr Silvey who was dismissed just 12 days short of his 55th birthday, with adverse effects to him in respect of his statutory redundancy payment and his rights under the pension scheme. Those adverse effects stem from the date of the termination of Mr Silvey's employment, not from a miscalculation by the respondents of what his payment in lieu of notice should be. We are unanimous in finding that the adverse effects of which Mr Silvey complains rose from the selection of the termination date and not from the breach of contract claim. The applicant's case fails.”
The Employment Tribunal thus seems to have thought that the cause of the appellant's loss was the choice of termination date and not the respondent's breach of contract. I shall return to this analysis in a moment.
7. The appellant appealed to the Employment Appeal Tribunal. The Employment Appeal Tribunal dismissed the appeal. The judgment was given by the President, Lindsay J. The Employment Appeal Tribunal concluded that the point raised in the appeal was determined by the decision of the National Industrial Relations Court in Dixon v Stenor Ltd [1973] IRLR 28. The reasoning of the Employment Appeal Tribunal can be seen from paragraphs 4 to 6 of the judgment which are in these terms:
“4. The case is slightly distorted because Pendragon had, by a relatively small amount, miscalculated the payment in lieu of notice; the arithmetic was wrong. They underpaid by £27 and also it was later realised that Mr Silvey had a claim based on bonus for £950. But it cannot be denied, and Mr Tatton-Brown does not seek to deny, that Mr Silvey did indeed accept the offer of payment in lieu of notice and received the payment to which he thereby became entitled. What then is the consequence of accepting an offer in respect of payment in lieu of notice?This, as it seems to us, is regulated by a case J.T. Dixon v Stenor Ltd [1973] IRLR 28 per Sir John Donaldson, as he then was. At paragraph 3 of that case, one finds this:
‘Both the Industrial Relations Act 1971, in relation to dismissal, and the Redundancy Payments Act 1965 count the time of employment as being from the moment when a man starts in employment until the moment when his employment ceases. If a man is dismissed without notice but with money in lieu, what he receives is, as a matter of law, damages for breach of contract. During the period to which the money in lieu of notice relates he is not employed by his employer.’
5. Sir John Donaldson continued with an exposition of the reasoning that lay behind the conclusion that during the period to which money in lieu of notice relates, the man is not employed by his employer. It follows, as far as we can see, that as Mr Silvey accepted the payment in lieu of notice his employment ceased as at 6 November 1997. He cannot simultaneously receive money in lieu of notice and claim the benefit of the continuing employment which would have occurred had he not accepted money in lieu of notice.
6. The Employment Tribunal's reasoning is, everyone agrees, not entirely clear but they were of the view that the employment ended on 6 November 1997 and, in our judgment, they were right in that view. Had Mr Silvey wished to claim that employment had continued down to the expiry of the 12 weeks of the notice, as he was entitled to, he would have had either to refuse the offer of payment in lieu or make it abundantly clear that his acceptance of it was without prejudice to his employment continuing for the remaining 12 weeks. It is an odd factor that occurs in this case that, if only he had done that, the likelihood is that Pendragon might well have said ‘By all means continue to be employed’ because they had no particular reason to oppose that, but that was not done. This Dixon v Stenor point seems to us to be an answer to the appeal. Mr Tatton-Brown has sought to avoid the point but we find no way of escaping it. The employer was undoubtedly in breach, and that is not denied by Mr Pritchard, but the case is therefore that on his accepting the offer of payment in lieu of notice the right of the employee to assert that he continued to be employed ceased at the beginning of the period to which the payment in lieu of notice related, namely on 6 November 1997. That date was, of course,...
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...at the time of his dismissal or during the notice period, he is not entitled to such payment. 51 InMaurice Silvey v Pendragon PLC [2001] EWCA Civ 78411 the appellant's employment was terminated on the grounds of redundancy by letter dated 6 November 1997. His termination letter also indicat......
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