____________________

Appeal No. UKEATS/0064/09/BI

EMPLOYMENT APPEAL TRIBUNAL

52 MELVILLE STREET, EDINBURGH, EH3 7HF

At the Tribunal

On 27 July 2010

Before

THE HONOURABLE LADY SMITH

MISS J GASKELL

MR P HUNTER

MR RAYMOND CHRISTIE (APPELLANT)

JOHNSTON CARMICHAEL (RESPONDENT)

Transcript of Proceedings

JUDGMENT

**APPEARANCES**

For the Appellant

MS A STOBART (Advocate)
Instructed by:
Quantum Claims
70 Carden Place
Queens Cross
Aberdeen
AB10 1UL

For the Respondent

MR D LOGAN (Advocate)
Instructed by:
Law at Work Ltd
151 St Vincent Street
Glasgow
G2 5NJ

**SUMMARY**

UNFAIR DISMISSAL – Constructive dismissal

CONTRACT OF EMPLOYMENT – Wrongful dismissal

Appellant's appeal to the effect that the Employment Tribunal should have found that he had been wrongfully dismissed as at 28 March 2008, and that the Respondent was in breach of contract in putting him on "garden leave", dismissed. The Appellant's claim did not include any case that he had been dismissed as at 28 March 2008, on the findings in fact, the Appellant had not been dismissed by the Respondent and, on the facts of the case, the Respondent had been entitled to put the Claimant on "garden leave" on 13 March 2008.

Cross-appeal that the Employment Tribunal had erred in finding that the Respondent had wrongfully dismissed the Claimant so as to disentitle them from recovering course fees, upheld. Order pronounced by the Employment Appeal Tribunal finding the Appellant liable to repay course fees to the Respondent.

**THE HONOURABLE LADY SMITH****Introduction**

1. This is an appeal by a Claimant who was employed by a firm of chartered accountants, from a judgment of an Employment Tribunal, Employment Judge Mr Raymond Williamson, sitting at Aberdeen, registered on 24 March 2009. There is also a cross appeal. We propose to continue referring to parties as Claimant and Respondent.

1. The Employment Tribunal dismissed the Claimant's claim of unfair dismissal and ordered the Respondent to pay the sum of £1,031.81 in respect of what they held to be due in respect of a claim for unpaid remuneration, holiday pay and contractual benefits.

1. The Claimant was represented by Ms Anna Christie, who designs herself "Attorney-at-Law", before the Employment Tribunal and by Ms Stobart, advocate, before us. The Respondent was represented by Mr Donald MacKinnon, solicitor, before the Tribunal and by Mr Logan, advocate, before us.

**Background**

1. The Claimant was employed by the Respondent in its Fraserburgh office as a "Senior Client Relationship Manager" in what the Employment Tribunal refer to as a "generalist tax role". Prior to the summer/autumn of 2007, he had no professional qualifications but at that time, he was successful, following study and examinations, in gaining membership of the Chartered Institute of Taxation.

1. The Claimant sought recognition of his qualification by the Respondent; he wanted a higher salary and more specialist tax work. The Respondent could not accommodate the Claimant's wishes in their Fraserburgh office, where there was no scope for him to be employed full time as a specialist tax adviser. It was, accordingly, proposed that in April 2008, he move to the Aberdeen office and various discussions ensued as to how that might be achieved.

1. At about the end of February 2008, the Claimant advised Mr McKelvie, one of the Respondent's partners based in Aberdeen, who specialises in tax work, that he had had an offer of a job from another Aberdeen firm at a higher salary than that which the Respondent was prepared to pay him. He also suggested that a move to Aberdeen should be postponed until 1 June 2008. The Claimant had in fact rejected the job offer to which he referred but did not disclose that to Mr McKelvie. Mr McKelvie thus expected that the Claimant was going to move to another firm. Mr McKelvie had also made it clear to the Claimant that, before he could be allowed, after transferring to Aberdeen, to continue servicing any of his Fraserburgh clients, he would have to make a satisfactory business case, client by client, in support of the proposition. Otherwise those clients would continue to be serviced from the Fraserburgh office, by others.

1. The matter of what was to happen to the Claimant's existing client list was an important feature of the ongoing discussions and a meeting which the Claimant himself termed as being "to discuss the allocation of my client portfolio" (by email of 11 February 2008) took place on 6 March 2008 between the Claimant and two of the Respondent's Fraserburgh based partners, Mr Pitman and Mr Smith. The Claimant had prepared, prior to that meeting, a spreadsheet which showed a list of his clients split into five columns, each of which was headed with the name of a person who worked in the Fraserburgh office other than the Claimant. That is, what was under discussion was the allocation of the Claimant's existing client list to others. He made no business case that he should continue servicing any of his clients after moving to Aberdeen. At paragraph 12, the Employment Tribunal records the following findings in fact:

"Mr Smith and Mr Pitman proposed that an appropriate letter should be sent to the clients on 20 March 2008 by the claimant advising them of the claimant's move to Aberdeen and the identity of the new service provider. The claimant did not challenge that proposal at that time. Mr Pitman indicated he would draft appropriate letters for the claimant to sign after the claimant had returned from a long weekend break on 12 March 2008. In the course of the meeting the claimant neither said or failed to say anything or did or failed to do anything which alerted or should have alerted Mr Smith or Mr Pitman that matters were not progressing smoothly to a mutually agreed transfer of the claimant to the respondent's Aberdeen office."

1. On returning from his break, on Wednesday 12 March 2008, the Claimant delivered a letter of resignation to the Respondent. It was in the following terms:

"11 March 2008

Dear Mr Smith

Resignation due to constructive dismissal

I hereby give three months notice of my resignation effective from 12 March 2008.

My grievance relates to the anticipatory breach of contract by the firm and my constructive dismissal as a result. Specifically, it relates to the firm's intention to unilaterally vary my contractual terms and indeed remove my current position in the absence of any other agreed job offer.

On 6 March 2008, it was confirmed that my client base had been reallocated and that letters would be sent to the clients informing them of the change by 20 March 2008. As a result, I would no longer deal with my current client portfolio. This is an anticipatory breach of contract as the fundamental terms of my contract as Client Relationship Manager are going to be changed and my role within the firm will effectively disappear. Having dealt with the same client base for almost 9 years at the firm, this removal of my role is extremely significant and fundamental. Moreover, as previously indicated to Mike Pitman, I was dismayed when the staff of the Fraserburgh office were advised in December that I was leaving to move to the Aberdeen office, when no formal job description had been provided to me.

Although I had expressed an interest in promotion within the firm several months ago, no such offer has been forthcoming and now my current job role is being removed without consent. I have no choice but to tender my resignation as a result of this breach of contract and claim constructive dismissal.

I am prepared to deal with this grievance in writing. If you agree, please confirm your agreement in writing that the modified procedure under the Employment Act 2002 (Dispute Resolution) Regulations 2004 should apply. I look forward to hearing from you with your explanation and response to my grievance.

Yours sincerely

Raymond Christie."

1. The Respondent replied by letter dated 12 March (which was delivered to the Claimant at a meeting on 13 March) in the following terms:

**"STRICTLY PRIVATE AND CONFIDENTIAL

**

Dear Raymond

Re: Resignation

I acknowledge receipt of your resignation dated 11 March 2008, received today (12 March 2008).

As you have stated, you are required to give three month's notice from today's date. You will not be required to work this notice and are on garden leave with immediate effect.

I note that your resignation letter raises a number of issues in relation to your employment and these will be dealt with under the firm's grievance procedure.

With reference to your request to use the modified procedure, as you are not an ex employee, it is our understanding that this does not apply and therefore we will be holding a meeting with you to discuss your grievance.

I enclose a copy of your contract and would draw your attention to the clauses relating to confidentiality, non solicitation and non competition.

I will be in touch shortly to discuss the arrangements for your grievance hearing.

Yours sincerely

Billy Smith

Partner

Enc: Copy of contract of employment."

1. The Claimant was told at the meeting on 13 March 2008, that he must not contact clients, as referred to in an email dated 14 March 2008 which was at tab 12 of the bundle provided for the appeal hearing.

1. On13 March 2008, the Claimant refused to sign the letter to clients that Mr Pitman wished him to sign, as discussed at their meeting on 6 March 2008. That same day, the Claimant was told to clear his desk and go home, which he did. Given his reference to previous better job offers, the Respondent believed he had another job to go to.

1. By Friday 14 March, the Respondent had discovered that the Claimant had, notwithstanding the instruction to the contrary (and notwithstanding the express and implied terms of the contract of employment) been contacting his clients to tell them that he had left the Respondent's firm. The obvious inference that arises from such conduct on the part of anyone in what was then the Claimant's position is that they are seeking to entice the clients to take their business away from the existing firm and follow the departing employee. Thus, by letter dated 14 March 2008, the Respondent reminded the Claimant of his obligations in the following terms:

"STRICTLY PRIVATE AND CONFIDENTIAL

Dear Raymond

Re: Contacting Clients

It has come to my attention that you have been contacting clients, albeit as a 'friend', to advise them that you have left the firm.

I must remind you that during your period of garden leave, you remain an employee of Johnston Carmichael and you must not contact clients on any basis. We are communicating with all affected clients regarding how they will be serviced going forward.

Failure to follow this instruction will be viewed as a very serious disciplinary matter.

I also take the opportunity to draw your attention again to the non solicitation and non competition clauses within your contract. An additional copy of this has already been provided to you.

Yours sincerely

Billy Smith

Partner"

1. The Claimant was reminded that he had been directed not to contact any clients of the Respondent's in a further letter dated 18 March 2008. The second paragraph of that letter stated:

" ... as previously advised, you are on garden leave. You are, under no circumstances, to contact any clients of Johnston Carmichael during this period. I note that, despite the previous instruction, you have continued to contact clients. You should note that a continued refusal by you to obey this instruction from the firm will be viewed extremely seriously and may result in disciplinary proceedings, and if proved, summary dismissal."

1. The Claimant wrote to the Respondent by letter dated 25 March 2008. In that letter, he twice referred to himself as being:

" … an ex- employee …",

he sought to invoke the modified grievance procedure (a procedure only appropriate after termination of the contract of employment), and, in the sixth and seventh paragraphs, stated:

"I am also extremely concerned about the bullying letters I have received from the Fraserburgh office, dated 14 March and 18 March instructing me not to communicate with clients and threatening me with summary dismissal. Given the way that I have already been treated by partners in the Fraserburgh office, and the fact that I have already been dismissed by the firm, I found these letters quite intimidating.

As explained in earlier letters, I was constructively dismissed by the firm following the expressed intention to remove my position within the firm, which was a fundamental breach of contract. Although I was entitled to resign without notice in response to the firm's conduct, I was reasonable and offered to work 3 months notice. However, the firm refused this offer and I was escorted from the premises. Consequently the employment contract is at an end so it is not correct to way that I am on garden leave from the firm."

1. The Claimant also, in terms of that letter, asked what the position was regarding the payment of life insurance premiums and pension contributions that the Respondent had previously paid for his benefit. He wanted to know whether he needed to make alternative arrangements.

1. The Respondent replied to that letter by letter dated 27 March in which they stated, in paragraph 2:

"I note that in your previous correspondence you indicated that you were giving the firm three months' notice. You were asked by the firm to remain on garden leave during your notice period. I now note however that you are advising that contrary to your previous indications, and in breach of your contract of employment, you are in fact not giving any notice to the firm of your resignation which, if I understand your letter correctly, took effect on 14 March."

1. In the light of those considerations the Respondent, in terms of that letter also sought repayment of salary which had been paid to the Claimant for the period 14 to 31 March ( the monthly payroll already having been processed), and repayment of costs incurred by the firm in respect of his CTA training.

**The Claimant's Form ET1**

1. The Claimant's form ET1 was drafted by his representative, Anna Christie, who in the box for "representative's organisation" stated "Anna Christie, Attorney–at–Law", gave an address in Oxford and a Harvard email address. In his judgment following the rule 3(10) hearing, Underhill P, refers to her as being a lawyer with a distinguished academic record who practises as an in-house lawyer in a business. The form ET1 does not, accordingly, fall to be approached on the basis that might be adopted if it had been prepared by a lay person. A reasonable employer could fairly be allowed to approach it on the basis that it contained a careful analysis and communication of what the claim was (and was not) about.

1. Section 5.1 of the ET1, below the heading "Unfair dismissal or constructive dismissal" begins with the assertion "I am claiming unfair constructive dismissal" and there then follows a narrative extending to 24 numbered paragraphs. The essence of the complaint is that the Respondent was in fundamental breach of contract by deciding to reallocate the Claimant's clients at the meeting of 6 March 2008 and that because of that, he resigned with notice (of three months). At paragraph 9 there is a statement that he believes the Respondent was in breach of contract by insisting that he remain at home "twiddling his thumbs" and at paragraph 24, it is stated that after he resigned due to constructive dismissal, the Respondent, on 14 March 2008, brought his contract to an end and stopped his salary and other benefits as from that date; the Claimant's case was that because he had given three months notice, he was entitled to continuing salary and benefits.

1. There is no case in the form ET1 either expressly or impliedly to the effect that the Respondent dismissed the Claimant as at 28 March 2008. Even if the Claimant's pleadings under section 5.1 can be read as a claim that he was actually rather than constructively dismissed, putting matters at their highest for him, it would be that he gave an indication of a case of dismissal at 13 or 14 March but not at any date later than that and not because of anything said by the Respondent in any letter.

1. At section 8 of the form ET1, the section headed "Other payments you are owed", the Claimant sets out calculations under headings "WRONGFUL DISMISSAL (NOTICE PERIOD)", "HOLIDAY PAY", "NOTICE PAY" and "OTHER UNPAID AMOUNTS". Despite the instruction to "explain why" these sums are sought, no explanation is given. The line for "unpaid wages" is not ticked.

**The Tribunal's Judgment and Reasons**

1. The Tribunal found that the Claimant had not established any facts from which it could be concluded that the Respondent was in breach of their implied duty of trust and confidence and rejected the claim that the Claimant had been constructively dismissed. We can readily see that they were entitled to do so in the circumstances. Similarly, they did not find that the Respondent's actions when they put him on garden leave and told him to leave the premises constituted dismissal; as the Tribunal rightly states, putting an employee on "garden leave" inevitably involves excluding the person from the premises.

1. As to whether or not the Respondent was entitled to put the Claimant on "garden leave", the Tribunal considered relevant authorities (Provident Financial Group v Hayward [1989] ICR 160, William Hill Organisation Ltd v Tucker [1999] ICR291 **and Langston v Amalgamated Union of Engineering Workers [1974] ICR 180), observed that the Claimant's role was not unique within the Respondent's organisation, explained that it was not persuaded that the Claimant would have been deskilled by not exercising his skills for a period of three months and found that, in all the circumstances, although there was no express "garden leave" clause in the contract, the Respondent was entitled to have done as it did and impose such leave on the Claimant.

1. The Tribunal decided to address the question of "how and when" did the contract come to an end. They found that it ended on 28 March 2008 because, in their view, the terms of the Respondent's letter of 27 March 2008 (communicated to the Claimant a day later) were such as to constitute dismissal of the Claimant by them. Whilst it was not altogether clear from their original judgment why, having rejected the Claimant's claim of unfair dismissal, they made these findings, an explanation is provided by their answer to the questions posed under the Burns/Barke **procedure, following the rule 3(10) hearing. In terms of their response dated 17 December 2009, they explain that they made the finding solely in relation to the Respondent's counterclaim for repayment of course fees; the Respondent was not entitled to that repayment because, in the Tribunal's view, they had wrongfully dismissed the Claimant on 28 March 2008. However, as they explain, they took the view that it was not appropriate to find that the Claimant was entitled to compensation for wrongful dismissal because the Claimant had not made a claim in respect of any dismissal taking place on 28 March 2008.

1. Parties had agreed that the Respondent would pay the Claimant's fees in connection with achieving the Chartered Institute of Taxation qualification and that if he left the Respondent's employment within two years of doing so, he would repay a proportion thereof. The sum recoverable in terms of that agreement was £2,188.

**The Appeal**

1. We would refer to the judgment of this Tribunal (Underhill P) dated 3 February 2010, following the rule 3(10) hearing which indicates the very restricted basis on which the appeal was allowed to go through to a full hearing. Essentially, two issues arise:

(i) Ought the Employment Tribunal to have made a finding that the Claimant was wrongfully dismissed as at 28 March 2008? If so, is the Claimant entitled to compensation for that wrongful dismissal?

(ii) Was the Respondent entitled to place the Claimant on "garden leave"? If not, what is the effect?

Although a ground of appeal relating to automatic unfair dismissal was also allowed through to the full hearing, Ms Stobart indicated at the outset that it was accepted that there was nothing in it.

1. For the Claimant, Ms Stobart indicated that it was recognised that both the wrongful dismissal and "garden leave" grounds would result in the same remedy, namely an entitlement to salary and benefits for the notice period between 28 March and 13 June 2008, and there could not be double counting. It was not suggested that the Claimant had any claim for damages for breach of contract regarding the "garden leave" point other than that; he did not, for instance, have a claim for handicap on the labour market, damage to his reputation, or personal injury. Nor was it satisfactorily explained how an employee who is put on "garden leave" can claim that that fact alone causes him to suffer loss and entitles him therefore to an award of damages in the form of salary and benefits for the notice period; such payments are contractually due throughout a notice period whether or not an employee is on "garden leave". Putting an employee on "garden leave" does not affect those entitlements. There appeared to be a misunderstanding that lay at the heart of the Claimant's case on "garden leave".

1. Regarding the wrongful dismissal claim, Ms Stobart submitted that it was foreshadowed by the form ET1, that on a proper construction of the correspondence, the contract was brought to an end by the Respondent's letter of 27 March, that the Claimant did not appreciate until 28 March that his salary and benefits were being stopped and that that stoppage was being backdated and that he was entitled to rely on the Tribunal's finding that he had been dismissed at that point. It was her submission that the stoppage of pay and benefits as at 28 March 2008 amounted to dismissal of the Claimant. The Respondent had not been entitled to do so.

1. As to the garden leave point, Ms Stobart referred to the above authorities and also to the case of S G & R Valuation Service Co v Boudrais [2008] IRLR 770. She submitted that the concept of the right to work had expanded and covered situations such as that of the Claimant. The Respondent had denied the Claimant his right to work but had not been entitled to do so. She did not propose any particular construction of the Claimant's contract of employment to support the existence of that right. Rather, she founded on his professional status and the continuing professional development requirements ("CPD") that were thus imposed on him, a general submission that he needed to keep active and that in three months, he would be liable to get out of practice. The suggestion seemed to be that he would be not be able to carry out CPD or any other maintenance of his professional skills and knowledge during a period of "garden leave".

1. In response to the appeal, Mr Logan, in a clear and well analysed submission, submitted that there was no merit in it; the ET1 had not contained any case of dismissal at 28 March, the free floating reference to wrongful dismissal in part 8 of the ET1 did not amount to notice of such a case being given, the Respondent had not read the ET1 as giving them notice of any such case, and they had not approached matters before the Tribunal on that basis. Further, on the facts, there had been no dismissal as at 28 March 2008.

1. He referred to the facts of the case, pointing out that the Respondent was entitled to approach matters on the basis that the Claimant was looking to take a job on better conditions elsewhere and they were entitled to do what was appropriate to protect their interests. Despite instructions not to contact clients, the Claimant had done so; that was a plain and material breach of contract on his part. When he was told that the Respondent took a serious view of the matter and that it could result in his summary dismissal, his response was to say that he was not an employee any longer and his letter of 25 March made it clear that he did not regard himself as bound by any of his former contractual obligations. It was plain that his position was that the contract of employment was at an end. The Respondent's response was to accept that. That was what their letter of 27 March was concerned with. On no view could it be seen as a letter of dismissal.

1. Mr Logan also submitted that the Claimant was not entitled to the salary and benefits which he sought because the Claimant was in material breach of contract in that he had contacted clients after being put on garden leave, despite being directed not to do so. He relied in that regard on the legal analysis regarding mutuality of contracts set out at paragraphs 94–96 of Aberdeen City Council v McNeill [2010] IRLR 374. He also referred to the discussion of the import of interdependent obligations in the case of Standard Life Health Care Ltd v Gorman and Others [2010] IRLR 233 at paragraph 20.

**Cross Appeal**

1. Mr Logan indicated that the Respondent was, on a pragmatic basis, content to leave matters so that the Claimant was entitled to salary and benefits for the period 14–28 March although their position was that he had not been dismissed on 28 March. There was a problem with the arithmetic in the sum awarded by the Tribunal, however, a matter which had been the subject of a review application. That application had been put on hold pending the outcome of the appeal and his motion was that there should a remit to the Tribunal to consider and determine it.

1. The Respondent's concern in the cross appeal was to set aside the Tribunal's finding that they were not entitled to recover part of the fees that they had paid to enable the Claimant to achieve his Chartered Institute of Taxation qualification (£2,188, as referred to above).

1. Mr Logan submitted that the Tribunal had not only erred in finding that the Claimant had been wrongfully dismissed but had erred in finding that he had been dismissed at all. The circumstances did not fall within any of the categories set out in section 95 of the Employment Rights Act 1996. What had happened in this case was that the Claimant had unilaterally brought forward the date of termination of his employment, as set out in his letter of 25 March and that had been accepted by the Respondent. It was open to parties to do so: Wedgewood v Minstergate Hull Ltd [2010] UKEAT/ 0137/10. In these circumstances, the Tribunal had no basis on which to find that the Respondent was not contractually entitled to reclaim the course fees.

1. Ms Stobart sought to resist the cross appeal by relying on the Tribunal's findings. She referred to the case of Fitzgerald v University of Kent [2004] IRLR 300 in support of her submission that the date of dismissal/termination was not a matter of what parties believed but was to be objectively determined. She submitted that there was a dismissal on 28 March because that was the date when the Respondent decided to stop paying the Claimant's salary and benefits. The contract of employment had been brought to an end by the Respondent and they could not, accordingly, rely on the agreement regarding repayment of course fees.

**Relevant Law**

Dismissal

1. Section 95 of the Employment Rights Act 1996, insofar as relevant, provides:

"(1) For the purposes of this Part an employee is dismissed by his employer if (and, subject to subsection (2)….only if) -

the contract under which he is employed is terminated by the employer (whether with or without notice),

…

the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct.

(2) An employee shall be taken to be dismissed by his employer for the purposes of this Part if –

(a) the employer gives notice to the employee to terminate his contract of employment, and

(b) at a time within the period of that notice the employee gives notice to the employer to terminate the contract of employment on a date earlier than the date on which the employer's notice is due to expire;

and the reason for the dismissal is to be taken to be the reason for which the employer's notice is given."

Accordingly, if a contract of employment is terminated by means of an employee giving notice of termination in circumstances which do not fall within section 95(1)(c), the employee is not "dismissed" within the meaning of section 95. Similarly, where the issue is whether or not there has been a wrongful dismissal, the employee requires to show that the contract of employment was terminated by the employer in breach of contract, or that there was a resignation by the employee in circumstances where there had been repudiatory conduct on the part of the employer.

"Garden Leave"

1. The expression "garden leave" is commonly used to refer to circumstances where either the employer or (more often) the employee gives notice but the employer does not want the employee to attend work during the notice period. It is also frequently the case that the employer does not want the employee to work for a competitor during that period. During the notice period, the contract of employment remains in place. The employee is, accordingly, bound by its terms which will usually include confidentiality clauses and will always include the implied duties of fidelity and trust and confidence. That means, for instance, that an employee is bound to refrain from taking any action directed towards diverting existing business away from his employer or directed towards building up clientele for a business which he either intends to start himself or to start working for once he is free to do so.

1. The fact that an employee cannot work during a period of garden leave has given rise to discussion, in some English authorities, of the extent to which an employee can be regarded as having a right to work which "trumps" a garden leave clause. In, for instance, the case of Provident Financial Group plc and anr v Hayward, the financial director of an estate agency (a chartered accountant) had accepted a job with a competitor and his employer agreed that he could leave on six months notice, which was shorter than the contractual period. After two months, the employer put the employee on "garden leave", the employee decided to start his new job shortly thereafter, before the expiry of the six month period and the employer sought an injunction to prevent him doing so. At first instance, Mantell J refused to exercise his discretion so as to grant an interlocutory injunction on the basis that he did not consider that the court ought to grant it, the circumstances being that whilst he was satisfied that the employers would suffer some damage, it was not clear exactly how that damage would arise. The Court of Appeal were satisfied that that was an appropriate exercise of discretion and refused to interfere with it. They added some observations on the matter of "garden leave". At p. 165, Dillon LJ said:

"But the case has a wider importance because these clauses are imposed on many senior executives and it may be that such executives are hardly in a position to negotiate over the terms of their contracts of service. … The practice of long periods of "garden leave" is obviously capable of abuse. It is a weapon in the hands of the employers to ensure that an ambitious and able executive will not give notice if he is going to be unable to work at all for anyone for a long period of notice. Any executive who gives notice and leaves his employment is very likely to take fresh employment with someone in the same line of business not through any desire to act unfairly or to cheat the employer but to get the best advantage of his own personal expertise."

and, at p. 168:

"But it is very common for employers to have somewhat exaggerated views of what will or may affect their business and, if the employer were to come to the court seeking to enforce the covenant, the court would be fully entitled in my view to say, if it took that view of the facts, that the proposed other employment is in truth objectively considered and despite the fears of the employer, nothing whatever to do with the employer and, therefore, it is not appropriate, as a matter of discretion to grant an injunction. It is not enough just that the employee has contracted in certain terms and will not starve if the terms are enforced against him while the employer continues to pay him in full. The employee has a concern to work and a concern to exercise his skills. That has been recognised in some circumstances concerned with artists and singers who depend on publicity, but it applies equally, I apprehend, to skilled workmen, and even to chartered accountants."

On the other hand, at pp. 169-170, Taylor LJ observed:

"The authorities show that a court will not grant an injunction to restrain an employee from taking other employment where the effect would be to force him to return to the yoke of his employer because the alternative would be idleness and starvation, to use the extreme words which have figured in the cases.

Whether idleness and starvation are to be considered conjunctively or disjunctively, I do not think a case such as that before us raises any such spectres. The defendant here is to have his full salary, together with his company car and all the other benefits, until 31 December of this year, after which he is free. No starvation. Even considering idleness per se as a separate matter, it can hardly arise in this case. The defendant's skills as an accountant or financial director are unlikely to atrophy in a period of three months. Nor is he likely to suffer severe withdrawal symptoms for loss of job satisfaction over that period…

However, as a matter of discretion, for the reasons that have been given by Dillon LJ, I do not think that this is an appropriate case for injunctive relief."

**Provident Financial Group plc** would, accordingly, appear to be authority for the proposition that where parties have agreed on a period of notice, it may not be appropriate to prevent an employee from taking up employment with a competitor during that notice period and that relevant factors to consider include whether or not the employer can present a clear case that he will suffer loss, the nature of the employee's post, whether or not he can show that his ability to maintain his particular skills is likely to be prejudiced by the period of idleness in question, and the fact that he will continue to receive salary and benefits throughout the notice period. On the face of matters, however, an employee who does so would be in breach of contract and thus vulnerable to a claim for damages by his original employer. Whether an employer in that situation will actually be able to quantify his loss or will decide to pursue such a claim is another matter.

1. In the case of William Hill Organisation Limited v Tucker, the employers of a senior dealer in a spread betting business sought an interlocutory injunction to restrain the employee from taking up employment with a competitor during a notice period; they had put him on "garden leave". The judge at first instance, Goudie QC (sitting as a deputy judge of the Queen's Bench Division) refused to grant the order sought, observing (as quoted by Morritt LJ at pp. 295-6):

"... if the employee has a concern to work and a concern to exercise his skills, then it seems to me that there is a correlative obligation on the part of the employer to provide work and to enable him to exercise his skills and that therefore in normal circumstances there is a duty on the part of the employer to provide a skilled employee such as this defendant with work and the ability to exercise his skills save in circumstances where there is an express or implied right not to provide work."

Insofar as that passage may be regarded as suggesting that employees have a free standing right to work independent of their individual contracts of employment, it was not supported in argument before the Court of Appeal and the court approached matters on the basis that the question whether there is a "right to work" is one of construction of the particular contract in the light of its surrounding circumstances.

1. In William Hill, the court **found that on its proper construction, the contract of employment imposed an obligation on the employer to permit the employee, during the period of notice, to perform the duties of the specific and unique post to which he had been appointed in circumstances where his special skills as a spread better required frequent exercise. At p. 300, Morritt LJ observed:

"First, the post of senior dealer was a specific and unique post … Mr Tucker was the only senior dealer … he was the person appointed to conduct this new and specialised business … Secondly, the skills necessary to the proper discharge of such duties did require their frequent exercise. Though it not a case comparable to a skilled musician who requires regular practice to stay at concert pitch I have little doubt that frequent and continuing experience of the spread betting market, what it will bear and the subtle changes it goes through, is necessary to the enhancement and preservation of the skills of those who work in it."

1. Accordingly, the approach of the court was to hold that by placing the employee on "garden leave" in circumstances where he was being prevented from carrying out work that he would otherwise have been able to do by taking up a lucrative job offer from a competitor, the employer was in breach of the obligation to provide his employee with work and therefore the employee was discharged from the contract.

1. In Harvey on Industrial Relations and Employment Law, the view is expressed at paragraph 144 that the effect of the William Hill decision when read together with that in the earlier case of Langston v Amalgamated Union of Engineering Workers** is that in the absence of an express or implied provision entitling an employer to withhold the provision of work, an employer must not withhold work when there is work available to be done and we can see that, on the application of normal contractual principles, that is a sensible approach in a case where the employee on whom "garden leave" has been imposed seeks to work during the notice period.

1. "Garden leave" was more recently considered in the case of SG & R Valuation Service Co v Boudrais and others where, again the issue was whether or not injunctive relief should be granted. In that case, Cranston J regarded his task as being to determine whether or not, under their contracts of employment, the employees had a right to work and found, on the facts of that case, that such a right existed. The relief sought was, accordingly, refused.

Mutuality

1. We do not propose to address the issue of law that arises from the Respondent's argument about mutuality in detail as it was not the subject of detailed argument and it is not necessary to do so, the appeal falling to be rejected on other grounds. We accordingly go no further than noting that, in principle, an employee who is himself in fundamental breach of contract is in no position to insist on his employer performing his part of the bargain. We would observe, however, that we heard no argument on the matter of how and why an employee's obligation to refrain from seeking to divert business away from his employer or to use his employer's contacts to build up his own or an competitor's business is of a type which would justify the withholding of salary. We do not say that such conduct could not be regarded as so fundamental as relieving the employer of his salary obligations but we are conscious of the fact that the matter was not explored; in particular, it was not taken up on behalf of the Claimant.

**Discussion and Decision**

1. We are persuaded that we should dismiss the appeal and allow the cross appeal to the extent it was moved. Our reasons are as follows.

Was there a dismissal?

1. First, there was no case before the Employment Tribunal that there had been a dismissal of any kind on 28 March. We reject Ms Stobart's submission that such a case is to be read into the ET1 in paragraphs 9 and 24 of part 5 and in the entries in part 8. Even if there is a case of actual dismissal as opposed to constructive dismissal, and we do not accept that there is, at its highest it amounts to a case that the Claimant was dismissed when he was put on "garden leave", an event which occurred on 13 March. Despite the relative informality of written pleadings before the Employment Tribunal, the basic requirements of fair notice apply and we cannot conclude that notice of such a case was given by the Claimant. We do not see that a reasonable employer could be expected to read the ET1 as putting him on notice that the Claimant intends to make a case of dismissal on 28 March let alone a dismissal by means of a letter dated 27 March. Nor could a reasonable Employment Tribunal have been expected so to conclude. It was thus not open to the Claimant to pursue such a case and not open to the Tribunal to hold that there had been a wrongful dismissal on 28 March 2008. They were correct to refrain from so doing.

1. We should add that we are not persuaded that the fact that it was on 28 March that the Respondent decided to backdate their stoppage of the Claimant's salary to 14 March alters matters. It does not, in particular, show that the Respondent dismissed the Claimant on that date.

1. Secondly, whilst we agree with the Tribunal that the parties' contract of employment came to an end on 28 March, we part company with them where, at paragraphs 44 and 45, they hold, for the purposes of the cross appeal, that the letter amounted to dismissal of the Claimant by the Respondent. Even less did it amount to a wrongful dismissal. We would analyse matters thus:

* The Employment Tribunal found that the Claimant was not constructively dismissed in respect that the Respondent was not in breach of contract by reallocating his client list (paragraph 40 of the Employment Tribunal's reasons). * Accordingly, there was no dismissal when the Claimant tendered his resignation on 13 March in terms of his letter of 12 March. * The Claimant was contractually entitled to resign on giving three months notice. * The Claimant's letter of 12 March gave three months notice of his intention to resign i.e. contractual notice that the contract would come to an end on 12 June. * The Respondent accepted the Claimant's notification on 13 March i.e. they accepted that he had given effective notice that their contract would come to an end on 12 June. * The respondent also, on 13 March, put the Claimant on "garden leave". * For reasons which we explain below, the Respondent was entitled to put the Claimant on "garden leave". * The Claimant at no time sought to work for another employer during the notice period. * The Claimant at no time sought to return to work in the Respondent's office during the notice period. Neither the Claimant nor the Respondent sought interim interdict* at any stage. * The Claimant was free to carry out any personal study on professional matters during the notice period. * There are no findings in fact that show that the Claimant was precluded from pursuing CPD during the notice period. * The Claimant was specifically instructed at the meeting that took place on 13 March not to contact clients during the notice period. * The Claimant was specifically instructed by letters dated 14 and 16 March not to contact clients in circumstances where the Respondent had found out that he was doing so. The letter of 16 March warned the Claimant that his doing so was not only a serious matter but that it could result in summary dismissal. * The Claimant did contact clients immediately after going on "garden leave". * The Claimant wrote his letter of 25 March (from which we quote in the "Background" section above). That letter makes it plain that he had not regarded himself as bound by his contract of employment since 14 March, that he considered that he was dismissed on 14 March, that he was not on "garden leave" and whatever had originally been the position regarding his giving three months notice, he was, in breach of contract, departing from that. That is, his letter can only be read as a unilateral repudiation of the parties' contract. We are not persuaded that the question posed in the last paragraph of the letter relating to pension and life insurance shows that he regarded himself as still bound by the contract; on the contrary, it is consistent with his position being that the contract has come to an end and him recognising that he will have to make alternative arrangements for those matters. * The Respondent's letter of 27 March accepted the Claimant's repudiation of the parties' contract. The second paragraph of their letter acknowledged and correctly analysed the position as being that the Claimant, in breach of contract, had decided not to give three months notice after all. It went on and dealt with the question of the Respondent's salary obligations in the new changed circumstances; they noted that the Claimant was saying that he ceased to be an employee on 14 March and recalculated the salary and benefits due to him on that basis. That was all consistent with them accepting the Claimant's repudiatory breach. What it did not amount to was a dismissal by them of the Claimant. The circumstances did not accord with the statutory or common law definitions of dismissal, to which we refer in the "Relevant law" section above.

Garden Leave

1. As to the matter of garden leave, we do not consider that the Claimant's contract of employment can be construed as giving him the right to work for which Ms Stobart contended. We note that he was employed as a senior client relationship manager, that on the findings in fact the duties involved in that post were not unique (he was employed as a generalist tax adviser, a job also carried out by a number of other employees and which could be carried out by an accountant without formal qualifications), and he had not yet commenced work as a specialist tax adviser. We agree with the Tribunal that there was nothing in the facts to point to a risk that the Claimant would become deskilled. We doubt whether, in any event, even in the case of qualified chartered accountant or a member of the Chartered Institute of Taxation, it necessarily follows that a period of garden leave will result in deskilling. It is not unusual for such professionals to choose to take sabbaticals and to take periods of leave in blocks of a number of weeks, practices which would not be expected if it was thought to be damaging to their skill levels (the rest from the pressure of daily work might, rather, be thought to be likely to be beneficial). Also, there is nothing to stop such a professional, through personal study or suchlike, from keeping himself up to date. In any event, in the context of this case, where a finding that the Respondent was in breach of contract by putting the Claimant on "garden leave" was sought for no practical purpose (as noted above, there was no claim for damages, only a claim for the salary and benefits to which the Claimant would have been contractually entitled during the "garden leave" period in any event), it does not appear to us to have been appropriate to ask that the Tribunal determine the issue at all. This was not a case where the employers were trying to prevent the Claimant from taking up employment with a competitor during the notice period, in which case, the matter could quite properly have been aired in any application for interim interdict before the Sheriff Court or the Court of Session.

1. Turning to the cross-appeal, since we are not persuaded that there was a wrongful dismissal by the Respondent, the Tribunal's rationale for refusing to make an award in favour of the Respondent for reimbursement of course fees paid by them for the Claimant, falls away. We will, accordingly, make such an award in the sum sought; it was not disputed that that would be the appropriate figure if the cross appeal succeeded.

**Disposal**

1. In these circumstances, we will pronounce an order, dismissing the appeal, upholding the cross appeal to the extent of ordering that the Claimant pay the sum of £2,188 to the Respondent and otherwise remitting the case to the Employment Tribunal to proceed to hear the outstanding review application regarding the sums claimed by the Claimant in respect of outstanding salary and/or benefits.