Appeal No.	 EAT/567/99

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 31 January 2000

Before
HIS HONOUR JUDGE PETER CLARK
MRS D M PALMER
MR S M SPRINGER MBE

MRS J THEODOSOPOULOU	APPELLANT

BANK OF CYPRUS (LONDON) LTD	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR G MORTON
(OF COUNSEL)
INSTRUCTED BY:
MR R H CRUDINGTON
MESSRS GRANT SAW & SONS
SOLICITORS
181-183 TRAFALGAR ROAD
GREENWICH
LONDON  
SE10 9EH	
For the Respondent	MR I ROGERS
(OF COUNSEL)
INSTRUCTED BY:
MR I A ANGELIDES
SOLICITOR
BANK OF CYPRUS (LONDON) LTD
LEGAL DEPT
87/93 CHASE SIDE
LONDON
N14 5BU	

	JUDGE CLARK:

1.	By an Originating Application presented to the Employment Tribunal on the 9th December 1998, the Appellant, Mrs Theodosopoulou, complained of unfair dismissal and direct unlawful sex discrimination by the Respondent Bank by whom she had been employed.  

2.	The matter came before a Tribunal sitting at London South under the Chairmanship of Mr D Booth on 24th February 1999.  By a reserved decision with Extended Reasons promulgated on 17th March 1999 that Tribunal upheld her complaint of unlawful sex discrimination but dismissed the complaint of unfair dismissal on the ground that she had not been dismissed from her employment by the Respondent.  It is against that latter finding, that this appeal is brought.  

3.	At a preliminary hearing held before a division of the EAT presided over by Judge Levy QC on 15th July 1999, the appeal was permitted to proceed to this full inter-partes hearing on a single ground, namely whether the Employment Tribunal misapplied the principles to be found in the judgment of Kilner-Brown J given on behalf of the Employment Appeal Tribunal in Martin v Yeoman Aggregates Limited (1983) ICR 314 to the facts as found in this case so as to reach a flawed conclusion on the question of dismissal.

5.	The Facts

These appear to be uncontroversial and are, so far as is material, as follows.  The Appellant commenced employment in the Respondent Bank’s Birmingham Branch on 1st October 1996.  She later transferred to the Camberwell Branch.  In early 1998 she became pregnant and on 29th April she completed the form MAT B1 and notified the Respondent that she was pregnant and that her child was expected during the week concluding the 20th July 1998.  She completed a Bank pro forma notifying her intention to stop work on 10th July.  In fact, her last day of work was 3rd July but the Tribunal found that nothing turned on that date.  Her baby was born on 5th August.  She was due to return to work on 12th October, however, she requested and was granted a further 3 weeks annual leave which took her actual date of return to the 2nd November 1998.  

6.	In these circumstances the Employment Tribunal found that she had the statutory right to maternity leave, that her date of return was 12th October and that she had a contractual right to 3 weeks leave thereafter.  

7.	In early September she telephoned her supervisor and was advised that she had to give 3 weeks notice before returning to work.  Taking her date of return as 2nd November she sent off her notice on 25th September.  It arrived on 28th September, that is, less than 3 weeks before the 12th October. 

8.	On the 1st October 1998, the Bank’s personnel officer, Mrs Pantelides, wrote to the Appellant in these terms:

“Dear Joanna

I am in receipt of your letter dated 25th September which arrived in my office on 29th September advising me that you wished to return to work on 12th October 1998 after your maternity leave.  I must advise you that under the Employment Rights Act 1996 it is required that you give 21 days notice in writing of your date of return.  This requirement has not been met.  The date on which the Bank should have received confirmation of your return to work was 21st September 1998.  I therefore regret advise to advise you that I am unable to accept you back on to the permanent staff.”

9.	That, as the Tribunal observed, was incorrect.  The statutory obligation to give notice of intention to return applies to women with more than 2 years continuous service; it does not apply to a woman such as the Appellant who has less than 2 years service and is exercising her right to return to work after 14 weeks of statutory maternity leave.

10.	Having been told clearly and unequivocally by Mrs Pantelides that she could not return to work for the Bank, the Appellant consulted solicitors who wrote to Mrs Pantelides on 11th November pointing out her mistake, referring to “the dismissal of our …client on or about 1st October 1998” and informing her that the papers were to be put before counsel with a view to preparing a claim for unfair dismissal and/or sex discrimination.  They enquired about the possibility of early settlement of her claim.

11.	On 17 November the Bank replied through Mr Kirkland, the Human Resources Manager.  He acknowledged the error; the Appellant had been wrongly coded as having more than 2 years continuous service.  He indicated that a revised letter would be issued, indicating the Appellant’s date of commencement of work as 12th October 1998, her salary would be backdated to 12th October and her legal costs paid.  

12.	That solution was not acceptable to the Appellants solicitors, who wrote on 23rd November rejecting what they described as the Bank’s offer to reinstate the Appellant and stating that she considered the reason given for her dismissal was a “pretext”.  The Bank’s good faith was questioned.  These proceedings then followed on 9th December 1998.

13.	E T Decision

The Tribunal was much taken by the approach of the Employment Appeal Tribunal in Martin.  There, the Appellant was orally dismissed following an argument with a director of the Respondent Company, Mr Hammond.  Within 5 minutes Mr Hammond realised that he had said things in temper which he was not authorised to do.  He sought instead to suspend the Applicant for 2 days without pay.  The Applicant refused to accept that decision and left.  The IT found that there was no dismissal because the original words of dismissal were used in the heat of the moment and almost immediately withdrawn before any decisive action could be taken.  The Applicant’s appeal against that decision was dismissed.

14.	The Employment Tribunal purported to apply that decision to the facts of this case.  However, the Employment Tribunal, having raised the case of Woodar v Wimpy (1980) 1 AER 571 (House of Lords), during argument below, further affirmed their conclusion that there was here no dismissal on the grounds that the Respondent operated under a genuine mistake of fact namely that the Appellant had completed more than 2 years continuous service and that when it was brought to their attention they immediately reinstated the contract.  

15.	The Appeal.

Although strictly the sole ground on which the appeal was allowed forward at the preliminary hearing concerned the Employment Tribunal’s application of the principle in Martin, we recognise that it would be unfair to the Appellant not to deal also with the Employment Tribunal’s reasoning based on the case of Woodar.  In these circumstances we have received submissions from Counsel on both points.

16.	So far as Martin is concerned, we are not prepared to uphold the Tribunal’s decision on that ground.  It seems to us, as we think was the approach of Mr Justice Wood in Kwik Fit GB Limited v Lineham (1992) IRLR 156, paragraph 33 to which case Mr Morton referred us, that the principle in Martin should, at most, be confined to its own facts.  The delay between the Respondent’s letters of 1st October and 19th November is too long to amount to a “heat of the moment” recantation.  The principle ought not in our judgment to be extended as this Employment Tribunal sought to do on the facts of this case.

16.	However, we think that the more substantial basis for the Tribunal’s decision stems from the principle in Woodar and other cases as to the true meaning of repudiatory breach of contract.

17.	It was and is the Appellant’s case that by their letter of 1st October the Respondent had dismissed the Appellant within the meaning of section 95(1)(a) of the 1996 Act, either under the doctrine of automatic termination or by a repudiatory breach of the contract of employment which was accepted by the Appellant by her solicitor’s letter dated 11th November.

18.	To that Mr Rogers contends that for there to be a termination by the Respondent, the letter of 1st October must amount to a repudiatory breach of the contract, there being no termination on contractual notice.  Thus the question arises, was the Tribunal entitled to conclude that there was here no repudiatory breach by the Respondent?

19.	It is clear from the majority speeches in Woodar that to be repudiatory the breach or threatened breach must go to the root of the contract.  The guilty party must, by acts words or conduct have evinced an intention no longer to be bound by the contract.  Woodar was a case of alleged anticipatory breach of contract in circumstances where the party said to be in breach had acted in accordance with his own erroneous interpretation of the contract. However, the principle applies also in circumstances where that party is labouring under a mistake of fact or law.  

20.	That statement of the law, now to be found in the 28th edition of Chitty on Contracts, paragraph 25-018 was cited from an earlier addition with approval by Mr Justice Waterhouse in the employment case of Frank Wright & Co (Holdings) Limited v Punch (1980) IRLR 217, paragraph 8.  It is right to say that some doubt was cast on the correctness of the Employment Appeal Tribunal’s approach in Punch in the minority opinion of Lord Justice Templeman in Financial Techniques (Planning Services) Limited v Hughes (1981) IRLR 32, paragraph 29.  However, in the later case of Bridgen v Lancashire County Council (1987) IRLR 58, Sir John Donaldson MR observed.

“The mere fact that a party to a contract takes a view of its construction which is ultimately shown to be wrong does not of itself constitute repudiatory conduct, it has to be shown that he did not intend to be bound by the contract as properly construed.”

What emerges clearly from the cases is that it will be a question of fact for the first instance court to determine whether or not the party said to be in breach has evinced an intention no longer to be bound by the terms of the contract. 

21.	With that guidance in mind we return to the facts of this case.   At first blush Mr Morton makes a strong submission.  By the letter of 1st October the Respondent was denying the Appellant her undoubted right to return to work after maternity leave (we pause to observe that this is not a section 96(1) case, as counsel agree).  There can, he submits, be no clearer example of an actual dismissal under section 95(1)(a) of 1996 Act.

22.	However, we are persuaded by Mr Rogers that when properly analysed the letter of 1st October gives no indication of an intention of the part of the Respondent no longer to be bound by the contract.  On the contrary, it indicates an intention to apply the strict terms of the rights grafted onto contract by statute, based on a mistaken view of the facts, namely that the Appellant had completed more than 2 years continuous service for the purposes of the rights granted by section 79 of the 1996 Act.  The Appellants solicitors immediately saw the error and pointed it out to the Respondent, which in turn promptly recognised its mistake and sought, as it had always intended to on the Tribunal’s findings of fact, to give full effect to the Appellant’s contractual rights in accordance with statute.

23.	In these circumstances we are satisfied that it was open to the Tribunal to conclude that there was here no repudiatory breach of contract by the Respondent amounting to a dismissal under section 95(1)(a) (or indeed section 95(1)(c), had the point arisen below) and thus to dismiss the unfair dismissal application.

24.	Accordingly, we must dismiss this appeal.