Lloyd v BCQ Ltd UKEAT/0148/12/KN

Appeal against the dismissal of the claimant’s claims of a golden handshake, money under a personal health insurance policy and money in lieu of holiday pay whilst off sick, after his dismissal due to ill health. Holiday pay issue remitted to a different Tribunal in light of the decision of the CoA in Leeds v Larner.

The claimant was dismissed following a period of ill heath lasting nearly 4 years. He lost his claims for unfair dismissal, age discrimination, victimisation, breach of contract and accrued holiday pay. The claimant appealed.

The EAT came to the following conclusions:

1) The claimant had applied for permission to amend to claim the golden handshake but permission had been refused prior to the hearing, so the Tribunal did not have jurisdiction to deal with it;

2) Contrary to the claimant’s submissions, there was no implied condition that he would not be dismissed as such a condition could not be implied as it was contrary to the express condition of the claimant’s contract of employment which expressly

(i) permitted dismissal for illness when the claimant had been absent for as long as the claimant had been absent for; and

(ii) stated that it contained all the terms of the contract and so at the time contended for by the claimant, it could not be implied; and

3) The claim for holiday pay had to be remitted to a different Tribunal as it was necessary for it to determine a number of issues in the light of the decision of the Court of Appeal in NHS Leeds v Larner [2012] EWCA Civ 1034.

___________

Appeal No. UKEAT/0148/12/KN

UKEAT/0239/12/KN

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON, EC4Y 8JX

At the Tribunal

On 13 July 2012 & 27 September 2012

Judgment handed down on 12 November 2012

Before

THE HONOURABLE MR JUSTICE SILBER; MR D J JENKINS OBE; MR G LEWIS

LLOYD (APPELLANT)

BCQ LTD (RESPONDENT)

Transcript of Proceedings

JUDGMENT

**APPEARANCES**

For the Appellant
MRS S LLOYD (Representative)

For the Respondent
MR F McCOMBIE (of Counsel)

Instructed by:
British Printing Industries Federation
2 Villiers Court
Meriden Business Park
Copse Drive
Coventry
CV5 9RN

**SUMMARY**

CONTRACT OF EMPLOYMENT – Damages for breach of contract

The Claimant was dismissed because of ill health. He claimed that he was entitled to (a) a golden handshake; (b) money under personal health insurance; and (c) money in lieu of holiday pay.

All claims rejected by Tribunal. Claimant appealed.

Dismissing the appeal

(a) The Claimant had applied for permission to amend to claim the golden handshake but permission had been refused prior to the hearing. So the Tribunal did not have jurisdiction to deal with it;

(b) Contrary to the Claimant's submissions, there was no implied condition that he would not be dismissed as such a condition could not be implied as it was contrary to the express condition of the Claimant's contract of employment which expressly (i) permitted dismissal for illness when the Claimant had been absent for as long as the Claimant had been absent for; and (ii) stated that it contained all the terms of the contract and so at the time contended for by the Claimant, it could not be implied (Aspden v Webbs Poultry and Meat (Holdings) Limited [1996] IRLR 521 explained and Reda and another v Flag Ltd; and

(c) The claim for holiday pay had to be remitted to a different Tribunal as it was necessary for it to determine a number of issues in the light of the decision of the Court of Appeal in [NHS Leeds v Larner]() [2012] EWCA Civ 1034.

**THE HONOURABLE MR JUSTICE SILBER****Introduction**
  1. Mr Michael Lloyd ("the Claimant") appeals against decisions of the Employment Tribunal sitting in Bedford:-

(a) Dated 16 December 2011 ("the 2011 decision") in which it dismissed claims by him against BCQ Group Limited ("the Respondent") for unfair dismissal, age discrimination, breach of contract and victimisation for having previously brought disability discrimination proceedings. It also adjourned the claim for accrued holiday pay accrued due for his period of sickness absence and for the latter half of 2011; and

(b) Dated 10 February 2012 ("the 2012 decision") in which it dismissed claims by him against the Respondent for accrued holiday pay.

  1. The Claimant has been represented by his wife, Mrs Lloyd, who has presented his case with commendable skill and courtesy. We are grateful to her and Mr Fergus McCombie, counsel for the Respondent, for their helpful oral and written submissions.
**The Findings of the Employment Tribunal in the 2011 Decision**
  1. The Claimant, who was born on 21 December 1951, commenced his employment with the Respondent on 1 January 1978 and he became its Works Director. On 8 May 2007, the Claimant suffered a back injury in an accident. He returned to work from 5 July 2007 to July 2007 and then after an absence from work from 16 August 2007 until 29 August 2007. Thereafter and until his dismissal on 31 May 2011, the Claimant did not return to work for the Respondent because of his bad health.
  1. The Claimant had the benefits of private health insurance ("PHI") provided by the Respondent. He also had a written contract of employment dated 17 November 1992 but which made no mention to the provision of PHI, but it did contain a provision in clause 21(3) that the written contract: -

"contains the entire understanding between the parties and supersedes all previous Agreements and arrangements (if any) relating to the employment of the [claimant] by the Company (which shall be deemed to have been terminated by mutual consent."

  1. A PHI claim was submitted on behalf of the Claimant and payments were made. The Respondent negotiated a cash settlement cancellation of PHI cover of the Claimant on 12 August 2010 for which the Respondent received a lump sum payment of £38,718, all of which was passed onto the Claimant. In 2010, the Claimant brought proceedings against the Respondent under the Disability Discrimination Act, but at the conclusion of the hearing on 16 March 2010, the Tribunal found that he was not a "disabled" person and so it dismissed his claim.
  1. On 25 March 2010, the Claimant attended a Board Meeting, which was after he had previously missed some 27 consecutive previous Board Meetings. At this meeting on 25 March 2010, the Claimant read out a statement in which he explained that attending the Tribunal for his discrimination claim was:-

"extremely difficult for [me] and severely aggravated his back problem to the extent that at the end of the hearing lasting three days, [I was] in considerable pain and unable to cope."

  1. This made him "seriously question whether my return to work would be feasible" and he considered that it was unlikely that he would be able to return to his previous role "in any meaningful and effective way". He expressed the hope that the Board would support his decision "to take a step back from any further involvement with the company and just to remain on PHI".
  1. The Claimant's doctor had signed him off work on 20 April 2010 for six months. In a subsequent note of 20 October 2010, the doctor had stated that the Claimant was not fit for work for a further six months. The doctor could have stated on the form what adjustments might be appropriate to enable the Claimant to return to work (such as a phased return to work). No such indication was made on either form. In addition, the Respondent had available the services of the Unum Vocational Rehabilitation Team, but its wish to explore the possibility of the Claimant returning to work through their team was stalled by the fact that the Claimant's doctor had issued the two certificates saying that the Claimant was not fit for work for a total of 12 months.
  1. After the Respondent had received the second fitness note from the Claimant's doctor in October 2010 stating that he was not fit for work for a further six months, a meeting took place between Mr Barry Curryer, the Operations Director and Human Relations Manager of the Respondent, and the Claimant at the Claimant's home on 18 November 2010. The purpose of the meeting was to establish whether the Claimant would be able to return to work within a reasonable time frame. In the letter arranging the meeting, the Respondent had informed the Claimant that:-

"subsequent to this meeting and any further investigations and consultations as required; a decision will be made as to your continued employment by the company, said decision to include dismissal if appropriate."

  1. The Employment Tribunal found that Mr Curryer told the Claimant that dismissal was an option and that as far as he was aware, the PHI would be continued to be paid until the Claimant was 60 years of age (which would have been on 21 December 2011) when the policy expired. The Employment Tribunal noted that this turned out to be the correct position, but at no point during the meeting did the Claimant give any indication of a possible return by him to work.
  1. When directly asked by Mr Curryer what reasonable adjustments the Respondent could make to assist him to return to work and in what time frame, the Claimant responded by saying that the time frame was "up to the medical professionals". The Claimant also said that he had seen his GP two days earlier and that he was being treated for depression, but no possible or tentative date of his return to work was mentioned by the Claimant at that meeting.
  1. On 25 November 2010, Mr Curryer wrote to the Claimant informing him of the decision to dismiss him having referred to the facts first that the Claimant had been unable to give any clear indication as to when he would be able to return to work saying it was in the hands of his doctor, and second that the current sick note stated that he would not be able to return to work until April 2011. Mr Curryer reassured the Claimant that his PHI payments would continue to be paid until his 60th birthday. The Claimant was also informed that although his PHI payments would continue until his 60th birthday on 21 December 2011, the balance due to him might be paid in a lump sum at the end of his notice period on 31 May 2011. As we have explained, that duly happened.
  1. The Employment Tribunal found that the two reasons for the Claimant's dismissal were as set out in the letter based first on his absence from work for "an extraordinarily long time", and second the absence of any prospect of his return in the foreseeable future. The Employment Tribunal also found that the Claimant's dismissal had nothing to do with the earlier disability discrimination proceedings brought unsuccessfully by the Claimant. It also rejected the submission that his dismissal was somehow connected to the PHI policy.
  1. The Claimant appealed against his dismissal and the appeal was heard at a meeting by Mr Richard Good, another Director of the Respondent, on 6 December 2010. The appeal was dismissed.
  1. The Employment Tribunal rejected the Claimant's claim for unfair dismissal holding that the reason was the Claimant's capability. It concluded dismissing the Claimant was a reasonable decision for the Respondent to have taken and that the procedure adopted by the Respondent was "perfectly reasonable".
  1. The Employment Tribunal rejected as "a little short of absurd" the contention that the fact that a benefit payable under the insurance contract was due to terminate under the terms of that contract at 60, could constitute age discrimination. The Tribunal noted that there was retirement planning by the Respondent in which the Claimant himself had been involved in which the target retirement age for senior employees was 60. They therefore set up a PHI care cover in the event of long-term sickness for that age which would carry the employees through to 60 at which point it was anticipated that they would claim their pensions. The Tribunal held that reminding the Claimant of the age at which PHI cover ceased under the terms of the insurance policy could not constitute less favourable treatment of him on the grounds of his age.
  1. The Tribunal rejected the claim for victimisation on the basis that neither the Claimant's removal as a Board Director nor his subsequent dismissal as an employee were in any way related to the fact that he had brought proceedings for disability discrimination before the Employment Tribunal. The Employment Tribunal explained that the reason for his dismissal was simply that the Claimant had not carried out his duties either as a Director or as an employee for several years, due to his long-term sickness absence and that there was no reasonable or foreseeable prospect of him resuming those duties in the future.
  1. Next, the Employment Tribunal rejected the breach of contract claim because the Claimant had received or would be receiving the benefits under the PHI policy as he was expected to do. The Tribunal also rejected the complaint of the Claimant that the Respondent wrongfully had accepted a lump sum settlement of the PHI benefits without telling him. The Tribunal considered that the Respondent was entitled to do that and that in any event, it had passed on the benefits to the Claimant without any deduction. Thus they held the Claimant had been paid what was due to him. The Employment Tribunal noted that PHI benefits were not a benefit due under the contract because the terms of his contract of employment was that it was an "all terms contract", which made no reference whatsoever to PHI cover or to any right to it.
  1. The Employment Tribunal adjourned the claim for accrued holiday pay due relating to the period for the Claimant's sickness absence because after the hearing, the Tribunal became aware of the decision of this Appeal Tribunal in [Fraser v South West London St George's Mental Health Trust]() [2012] IRLR 100 and it adjourned consideration of the issues, which were raised by that decision.
  1. At the 2012 hearing, the Employment Tribunal dismissed the claim for money in lieu of holiday pay and we will deal with its reasoning in respect of that decision in paragraphs 60 ff.
  1. The Claimant appealed and at the hearing of the appeal before us, it was realised that the Court of Appeal had by then heard the appeal from the decision of this Appeal Tribunal in the case of NHS Leeds v Larner UKEAT/0088/11/CEA, but that it had reserved judgment. Subsequently the appeal was dismissed in a judgment handed down in July 2012 with the citation number [2012] EWCA Civ 1034.
  1. The Claimant appealed against the 20011 and 2012 decisions on the basis that the Employment Tribunal:-

(a) Erred in failing to consider the claim for "golden handshake" payment of a sum equivalent to six months salary pursuant to clause 10.2 of the contract of employment ("The Golden Handshake Issue");

(b) Failed to hold that there was a fundamental implied term in the Claimant's contract of employment that the Respondent would not terminate the Claimant's contract of employment as a means to remove his entitlement to PHI benefit in the absence of misconduct or some other repudiatory breach by the Claimant ("the PHI Issue"); and that it had

(c) Failed to pay holiday pay to the claimant for the period during which he was unable to work because of incapacity ("the Holiday Pay Issue").

**Issue A: The Golden Handshake Issue**
  1. The Claimant lodged his claim to the Employment Tribunal in February 2011 and this preceded the ending of his employment on 31 May 2011. When he made his claim to the Employment Tribunal, the Claimant was then expecting to receive a "golden handshake" payment of a sum equivalent to six months' salary.
  1. The basis of this claim was clause 10 of the Claimant's contract of employment because sub-clause (1) of it enabled the claimant to be continued "to be paid during absence due to incapacity … for a total of up to… 52 weeks in any period of two years in any one-year of employment under this agreement". The contract then provided that thereafter the Claimant (who is described in the contract as "The Director"):-

"10.2 …shall continue to be paid salary [only at the discretion of the Company or provided that if such absence shall aggregate in all twenty six (26) weeks in any fifty two (52) consecutive weeks the Company may terminate the employment of the Director by notice given on a date not more than twenty eight (28) days after the end of the Twenty Sixth (26th) week and in that event the Company shall pay to the Director a sum equal to six (6) months salary from the date of termination of his employment."

  1. After the Claimant's contract was terminated, the Respondent refused to make this payment and in consequence the Claimant made a request to the Employment Tribunal to amend his ET1 so as to include this claim. It is the case for the Respondent that permission to amend the claim to include a claim for non-payment of this sum was never agreed by the Tribunal, and that explains why this claim is not referred to in the Employment Tribunal's decision.
  1. The case for the Claimant was that permission to amend was given in an order from Employment Judge Cassel on 13 June 2011 when he gave the Respondent leave to amend its response to deal with two new claims. So it becomes necessary to ascertain what the Employment Tribunal was asked to do and what it did in respect of this claim for the golden handshake.
  1. A case management discussion took place on the telephone on 13 June 2011 in which it was explained that there was discussion on "the additional claim for non-payment of wages or, in the alternative, accrued holiday pay", but no reference is made to any claim similar to that referred to in clause 10(2) of the agreement.
  1. Employment Judge Cassel then ordered in paragraph 1 of the order that:-

"In addition to the claims already before the Tribunal the claimant brings two further claims, in the alternative, for non-payment of wages or non-payment of accrued holiday pay in the sum of £30,028 for the period of May 2007 and May 2011."

  1. These orders do not relate to anything which could be regarded as claims pursuant to clause 10(2) of the agreement. As a result of a request from this Appeal Tribunal, Judge Cassel stated that he had no independent recollection of the proceedings and his notes "disclose no application by the claimant to add a claim for six months pay by way of an exit payment". In an email dated 11 July 2011 and addressed to the Bedford Employment Tribunal, the Claimant asked for clarification of paragraph 1 of the order referred to in the last paragraph explaining that the Tribunal had been asked to add an additional claim for non-payment of wages which comprised not only of accrued holiday pay but "six months pay on termination". The Claimant finished the communication by asking for confirmation that both those matters would be considered by the Employment Tribunal in addition to the original claim.
  1. By a letter dated 20 July 2011, the Employment Tribunal explained that Employment Judge Cassel stated that:-

"During the case management discussion, it was clarified that the claimants sought an order for holiday pay. Based on the representations it was apparent that this could be argued as either a series of non-payment, or deductions from pay, under section 13 of the Employment Rights Act or a breach of the contractual arrangements for holiday pay and for that reason leave was given to the claimant in the terms of the order."

  1. On 29 July 2011, the Claimant wrote to the Bedford Employment Tribunal requesting an amendment to his claim stating that:-

"the additional claim in clause 2 of my contract of employment states if my employment is terminated by the company then I should receive not less than one years notice. However the company only gave me six months notice. I wish to add this breach and additional losses to my claim."

  1. The Employment Tribunal replied on 3 August 2011 explaining that Employment Judge Adamson had directed the following question be answered by the Claimant which was "why was the complaint not within the claim when presented and why has the application to amend not been made before?"
  1. On 5 August 2011, the Claimant replied to the Bedford Employment Tribunal explaining that when he was dismissed, he was told that he was entitled to 26 weeks notice and that he did not think to question the length of it but the "discrepancy regarding the contractual notice period was missed completely so the matter was not raised at that time". He added that when his employment ended, there was a lot of confusion about his final salary payment and the claim had to be amended to include the non-payment of holiday pay and wages. The Claimant stated that because of that he had taken advice and that he had only recently been informed that "My contract actually provides for one years notice and not six months notice. This is the reason why there was a delay in asking for this amendment".
  1. The response of Employment Judge Adamson dated 4 October 2011 was that the:-

"Application to add Breach of Contract refused –

1. Claimant's other complaints continue

2. Claimant's application is out of time

3. If the unfair dismissal succeeds – notice period likely to be considered in dealing with remedy.

4. Claimant should have been made aware of the notice period in his contract of employment and apparently has had the benefit of advice in addition.

5. Claimant had opportunity to apply and amend before."

  1. It is clear first that the Claimant had raised the issue of the "golden handshake" under clause 10.2 of the contract of employment, but second that at no time had the Employment Tribunal granted permission for this late claim to be introduced. It must be added that Employment Judge Metcalf, who was the judicial member of the Employment Tribunal which made the decisions under appeal, has explained in a memorandum to this Appeal Tribunal that he has no recollection of a specific application by the Claimant to add a contract claim for 6 months pay by way of an exit payment.
  1. Therefore there was no order permitting the Claimant to amend his claim to claim the sum specified in clause 10.2 of the contract of employment. In reaching that conclusion, we have not overlooked the fact that the Respondent had produced a document entitled "Respondent's Supplementary Grounds for Resistance", which deals with the golden handshake point. Mr McCombie, counsel for the Respondent, states that document was prepared in case permission was granted so as to include that claim. In any event, that document in itself it does not show that permission was granted to make the golden handshake claim. Thus we reject the appeal on this ground as the Employment Tribunal had no valid claim in front of it relating to this.
  1. We should add that even if we are wrong and there was a claim before the Employment Tribunal for a "golden handshake", then our provisional view is that it was doomed to failure because clause 10.2, which confers the right to this payment, states that it is only payable if the Claimant's contract of employment is terminated by giving notice not more than 28 days after the end of the 26th week in any period of 52 weeks in which the Claimant had not worked because of illness. In this case, the notice was given well after the end of the 28-day period and so the Claimant was not entitled to the golden handshake. That may be an additional reason for rejecting this claim, but this is only a provisional view as we did not hear submissions relating to this.
**Issue B: The PHI Issue**

(i) The issues

  1. The case for the Claimant is that an employer is contractually entitled to dismiss an employee by giving due notice, but where there is, as in this case, a PHI scheme in existence, there was an implied term that the employer would not terminate the contract of employment of an employee who was in receipt of those benefits while the employee was incapacitated from work where the effect would be to disqualify the employee from receiving the benefits.
  1. The case for the Claimant is that, as we have explained, he was given six months notice on 25 November 2010 due to his ill health even though he was then receiving long-term disability PHI payments and his employment terminated on 31 May 2011. Mrs Lloyd contends that the decision in Aspden v Webbs Poultry and Meat (Holdings) Limited [1996] IRLR 521 provided that there should be a term implied into the Claimant's contract of employment as part of the duty of trust and confidence owed to the Claimant as an employee to reflect the obvious intention of the parties, which was that the employer respondent would not (save on the grounds of the claimant employee's gross misconduct) terminate the contract of employment of an employee, who was in receipt of PHI benefits, while the employee was incapacitated from work, where the effect of such termination would be to disqualify the employee from their sickness benefits under the PHI policy .
  1. The case for the Respondent is that there was no such implied term, that any rights to any payments under the PHI policy arose under an insurance contract and not under the Claimant's contract of employment and, in any event, the Claimant has received all benefits which were guaranteed under the PHI policy.

(ii) Has the Claimant received all the benefits under the PHI policy?

  1. We start by considering whether the Claimant has received all benefits under the PHI policy. The Employment Tribunal found that the Claimant had received those benefits (paragraph 6.13). We also agree with the Employment Tribunal that in any event, the Claimant would have no claim as the amount paid to the Respondent for cancelling the PHI cover afforded to the Claimant was passed on to him without deduction.
  1. The Employment Tribunal explained that "8.4 … Even if the PHI policy had been included in the terms of the employment contract, there was no breach and no loss". No cogent argument has been put forward to dispute this and so this ground must be rejected but as we heard argument on all these issues, we will consider these submissions.

(iii) Was there a term implied into the Claimant's contract of employment that the employer respondent would not (save on the grounds of the claimant employee's gross misconduct) terminate the contract of employment of an employee, who was in receipt of PHI benefits, while the employee was incapacitated from work, where the effect of such termination would be to disqualify the employee from their sickness benefits under the PHI policy?

  1. The basis of the Claimant's case is that in the Aspden case the implied term was incorporated despite an express term allowing termination for prolonged sickness. It is true that in the Aspden case, Sedley J found that there was a mutual intention that the provisions for dismissal would not be operated "otherwise by reason of the employee's own fundamental breach". Indeed, he held on the evidence in that case, that it was not the intention of the employer to exercise its contractual right of dismissal where to do so would frustrate the entitlement of the employee to benefit from a permanent health insurance scheme and so a term was to be implied to that effect.
  1. This conclusion was considered by Lord Hamilton in the Court of Session in Hill v General Accident Fire and Life Assurance Incorporation plc [1998] IRLR 641 and which is referred to in an article written by Toby Kempster of counsel and which Mrs Lloyd helpfully attached to her submissions. Lord Hamilton stated in relation to Aspden at paragraph 34 that:-

"In so far as Sedley J.'s conclusion is to be understood as laying down as a general proposition that gross misconduct is the only circumstance in which the employer could lawfully dismiss an employee in receipt of sick pay and with the prospect of permanent sickness provision, I must respectfully disagree."

  1. Subsequently, Ward LJ in Briscoe v Lubrizol [2002] IRLR 607 agreed with Lord Hamilton when he said in paragraph 24 of his judgment with our emphasis added that:-

"I accept the defender's power to dismiss is subject to limitation. Where a provision is, as here, made in the contract for payment of salary or other benefit during illness the employer cannot, solely with a view to relieving himself of the obligation to make such payment, by dismissal bring that sick employee's contract to an end. To do so would be, without reasonable and proper cause, to subvert the employee's entitlement to payment while sick."

  1. Moore-Bick J (as he then was) had earlier explained in Earl v Cantor Fitzgerald [2000] EWHC 555 (QB) that he noted in the light of the concession made by counsel for the defendant and he then said with our emphasis added that:-

"There is a growing body of authority to the effect that when an employee's contract of employment incorporates a permanent health scheme of the kind which existed in this case it is an implied term of the contract that once the employee has become entitled to the benefits due under the scheme the employer will not dismiss him simply on the grounds of his continuing incapacity to work."

  1. The circumstances in which such a term can be implied was then reviewed by the Judicial Committee of the Privy Council in the case of Reda and Another v Flag Limited (Bermuda) [2002] UKPC 38, which was a decision which the judicial member of this Appeal Tribunal only discovered after the hearing. The parties then helpfully made written submissions on the relevance of this case pursuant to a request from this Appeal Tribunal. In that case, Lord Millet giving the opinion of the Board considered the contention that the employer in that case was duty bound to preserve the relationship of trust and confidence:-

"44…which ought to subsist between an employer and his employee and not to destroy that relationship by discriminating arbitrarily between its employees by granting some of them valuable financial entitlements and dismissing others in order to avoid having to do so."

  1. The Reda case was not concerned with PHI, but with stock options under a stock option plan, but the employees in that case relied on Aspden to support the existence of a similar implied term. Lord Millett considered what Aspden decided and then he explained that:-

"48. In Aspden v Webbs Poultry & Meat Group (Holding) Ltd the employer introduced a generous permanent health insurance scheme for directors and senior managers, including the complainant. After its introduction the complainant, who up to that point had no written contract of employment, entered into a written contract. Unfortunately the form used was one which had previously been used before the scheme was introduced, and it was mistakenly adopted without modification. The contract contained a specific power enabling the employer in the event of prolonged illness to dismiss an employee who was unfit for work and a general provision entitling either party to bring the contract to an end on three months' notice. Sedley J was satisfied on the evidence that it was not the employer's intention to exercise its contractual right of dismissal in circumstances where to do so would frustrate the employee's entitlement to income replacement insurance. The question was whether it was an implied term of the contract that it should not do so."

  1. Lord Millett continued by stating that:-

"49. The problem was that the implication of the necessary term would contradict the express terms of the contract. Sedley J was able to overcome this difficulty because the contract as written was internally inconsistent in its provisions for sick pay and termination. Furthermore, the situation in which the contract was entered into was known to both parties to include an income insurance scheme which could only work if the employee whom it covered remained in employment for the duration of his incapacity or until some other determining event specified in the policy took place. The inconsistent terms of the contract were the result of using an inappropriate form without appreciating the consequences of doing so. These factors persuaded the judge to imply into the contract the term for which the complainant contended.

50. Their Lordships consider that neither case [i.e Aspden and another case], properly understood, supports the proposition that Flag's express power of dismissal without cause was circumscribed in the manner for which the appellants contend….

51. Aspden v Webbs Poultry & Meat Group (Holding) Ltd was not concerned with the implied term of trust and confidence at all. The question was whether the employer's express right of dismissal could be limited by implication arising from the unusual circumstances in which the contract had been entered into and the inherently contradictory terms which resulted. The better course might have been to rectify the contract to include the term contended for as an express term, an unusual course but one which would appear to have been justified by the evidence. But even if the case is taken as a rare example of a term being implied into a contract to qualify an express right, the justification for this course lay in the need to reconcile express terms of the contract which were mutually inconsistent. No such problem arises in the present case."

  1. In the present case, the position is, as we have explained in paragraph 4, that there was a provision in clause 21.3 of the Claimant's written contract of employment stating (with emphasis added) that the written contract: -

"contains the entire understanding between the parties and supersedes all previous Agreements and arrangements (if any) relating to the employment of the [claimant] by the Company which shall be deemed to have been terminated by mutual consent."

  1. In our view, for reasons which we will now explain, this term constituted an express term which was inconsistent with the implied term relied on by the Claimant and indeed it showed why there was no scope for implying any term and certainly not the one relied on by the Claimant especially as there is no evidence to support the contention that the Claimant had a contractual right to benefits under the PHI policy. It is noteworthy that in paragraph 10 of the Claimant's grounds of appeal, it was pointed out by the Claimant that "the PHI policy was taken out by the respondent for my benefit in 1988 prior to my receiving a written contract of employment in 1992".
  1. In our view, the facts first that clause 21.3 (which superseded all previous arrangements between the Respondent and the Claimant) is contained in a contract which post-dated the introduction of the PHI policy and second the fact that the Claimant's contract of employment did not refer to his right or entitlement to PHI cover shows that the Claimant had no contractual right to the continuation of this cover. Indeed there was nothing to suggest that the Respondent had a contractual obligation to keep the PHI policy in place until the Claimant was 60 years of age. None of the cases referred to by Mrs Lloyd or in the article on which she relies by Patrick Halliday undermine this conclusion. Indeed as was explained in United Bank v Akhtar [1989] IRLR 507 there is:-

"44…a distinction between implying a term which negatives a condition which is expressly stated in the contract and implying a term which controls the exercise of a discretion which is expressly conferred in a contract. The first is, of course, impermissible. The second, in our judgment, is not impermissible."

  1. What the Claimant is seeking to do is the former and it is impermissible. The approach of the Employment Tribunal was to the same effect as it explained that the right to receive payments under the PHI policy:-

"8.4. …was not a benefit due to the claimant under the terms of his contract of employment which is an "all terms contract" making no reference whatever to PHI insurance cover."

  1. A second reason why the term relied on by the Claimant cannot be implied is that there was an express provision in clause 10.2 of the written contract of employment which, as we have explained in paragraph 24 above, permitted the termination of the Claimant's contract of employment by giving notice not more than 28 days after the end of the 26th week in any period of 52 weeks after the end of that 26th week and that such notice would trigger the payment claimed by the Claimant. What this shows is that it was agreed that the Claimant could be dismissed in circumstances which were at variance with the implied term contended for by the Claimant, which was that the employer would not terminate the contract of employment of an employee who was in receipt of those benefits while the employee was incapacitated from work where the effect would be to disqualify the employee from receiving the benefits.
  1. In reaching that conclusion, we have not overlooked the complaint of Mrs Lloyd that the Employment Tribunal should have referred to the Aspden case but that they did not do so. Although the Employment Tribunal might well have referred to that case, its failure to do so is not fatal bearing in mind that Employment Tribunals had no obligation to do so.
  1. The reason for that conclusion is to be found in the well-known principles relating to the reasons of Employment Tribunals which, with our emphasis added, have been explained by:-

(a) Bingham LJ when he stated in Meek v City of Birmingham District Council [1978] IRLR 250, that an Employment Tribunal's decision "should contain an outline of the story which has given rise to the complaint and a summary of the Tribunal's basic, factual conclusions" *[but the reasons are] "not required to create an elaborate product of refined legal draftsmanship."*

(b) Donaldson LJ who said in Union of Construction, Allied Trades and Technicians v Brain [1982] IRLR 22 that" I think it would be a thousand pities if these reasons began to be subjected to a detailed analysis and appeals were to be brought upon any such analysis. This, to my mind, is to misuse the purpose for which reasons are given.";

(c) Keene J who said in Derby Specialist Fabrication Ltd v Burton [2001] ICR 833, 844D that "As we have already said, it must be borne in mind that the extended reasons of an Employment Tribunal are directed towards parties who know in detail the arguments and the issues in the case. The tribunal's reasons do not need to be spelt out in the detail were they to be directed towards a stranger to this dispute"; and by

(d) Elias J, who stated in ASLEF v Brady [2006] IRLR 576, that "57 The EAT must respect the factual findings of the Employment Tribunal and should not strain to identify an error merely because it is unhappy with any factual conclusions; it should not 'use a fine toothcomb' to subject the reasons of the Employment Tribunal to unrealistically detailed scrutiny so as to find artificial defects; it is not necessary for the Tribunal to make findings on all matters of dispute before them nor to recount all the evidence, so that it cannot be assumed that the EAT sees all the evidence; and infelicities or even legal inaccuracies in particular sentences in the decision will not render the decision itself defective if the Tribunal has essentially properly directed itself on the relevant law."

  1. In this case, the Employment Tribunal made it clear to the parties that the Claimant lost because of the "all terms" provision in the contract and the absence of any contractual right to PHI cover as well as the fact that even if the Claimant had the benefit of the PHI contract, he had been paid the value of these benefits. In our view, those were adequate reasons.
  1. We should add that even if there was to be an implied term of the kind contended for by the Claimant, then our provisional view was that it would be subject to the exception suggested by Ward LJ in the Briscoe case in the passage cited in paragraph 45 above which was that any similar term would only be implied where the dismissal was "without reasonable and proper cause". In this case, the dismissal was for good cause because of the Claimant's absence from work and the absence of any prospect of his return as we explained in paragraph 13 above. We stress that these are provisional views as we have not heard submissions on this point and they do not form any part of our reasons for rejecting this claim.
  1. In those circumstances, it is unnecessary for us to comment on the conclusion in paragraph 8.4 of the Decision that:-

"…Whilst the respondent might well be liable to make payment to the claimant either directly under the terms of the insurance contract or as trustees on behalf of the claimant in respect of those funds and under a duty to distribute them to him, these are not matters which arise from the terms of contract of employment and therefore this Employment Tribunal has no jurisdiction to deal with such claim even if it had a sustainable basis."

**Issue C: The Claim for Holiday Pay**

(i) The 2012 Decision

  1. The claim for holiday pay was the subject of the 2012 decision which recorded that clause 9 of the Claimant's contract of employment provided that he would "(in addition to the usual public and bank holidays) be entitled to not less than thirty (30) days holiday in each year to be taken at a time or times convenient to the [respondent]". The Employment Tribunal considered that the absence of an absolute right for the Claimant to take leave whenever he wanted showed that it was implied that the Claimant would notify the Respondent in the form of his Director colleagues in advance of the dates when he intended to take holiday to ensure first that it would be mutually convenient, and second that in any given time a sufficient number of Directors were at work to safeguard the interests of the Respondent.
  1. The Employment Tribunal accepted that the Respondent's procedure was that Directors managed their leave by requesting it by means of an entry on a Master Wall Planner in the office of the personal assistant of the Directors in order to ensure that there were not sufficient clashes between Directors' leave and to maintain a sufficient level of cover by Directors to be available at work.
  1. The Employment Tribunal had found that no request had been made by the Claimant during the holiday year from April to March in 2011, and it noted that during the Claimant's prolonged absence, he had taken leave in the sense that going away for a few days on a number of occasions. Thus, in 2007, he spent about 4 days in Jersey where his son lived on each of three occasions as well as taking trips to Edinburgh, York, Lowestoft and Devon whilst on sick leave. The Claimant explained that he had not specifically asked for permission, but that he had had a discussion with the Human Resources Director, Mr Moore, who had apparently said to the Claimant that a break would do him good. The Employment Tribunal found that those various breaks all seem to have lasted between two and four days and "allowing for a degree of imprecision the Tribunal calculated that Mr Lloyd had taken about 30 days on leave in the sense of taking trips away from home". As we will explain, it is unclear if those 30 days fell wholly or partly on weekends or on Bank Holidays.
  1. The Employment Tribunal considered that even for somebody on sick leave, such as the Claimant, notification of intention to take leave could "reasonably be required because notification might be accompanied by a request for apologies for not being able to attend a meeting so that home visits were not arranged during that period". Again the Employment Tribunal accepted that it would be possible for somebody who was medically unfit to work, such as on account of stress-related illness, to be able to take and enjoy some leave. The holiday wall charts for the years before 2011 were unavailable as they had been destroyed, because it had not occurred to anyone that they might be required for legal proceedings.
  1. On 11 May 2010, the Claimant wrote to the Respondent stating that:-

"I am aware that due to a recent ECJ ruling, I have accrued statutory entitlement for the past three years during my long-term sickness absence. As my return to work is now being considered, I understand that I need to make a request for this holiday. I will be grateful if you could let me know how you want to manage this."

  1. The Respondent's Managing Director Mr Knowles replied referring to the ECJ decision in Stringer and Others v HMRC (Case C-520/06) in which it was held that workers on long-term sick are entitled to pay in lieu of holidays if their employment is terminated or they could take their accrued holidays on their return to work. Mr Knowles then said he would expect to discuss the amount of holiday that had accrued on the Claimant's return to work, but he added that the decision in Stringer only applied to the amount of holiday governed by the Working Time Directive, namely 20 days per year.
  1. The discussion envisaged in that communication from Mr Knowles did not occur, because the Claimant did not return to work from his long-term sickness leave at any time prior to his dismissal. The Employment Tribunal noted that in the request of 11 May 2010, the Claimant did not ask for a period of annual leave between any specific dates nor did he indicate an intention to take leave between specified dates. The Employment Tribunal stated that it would have been possible for the Claimant to have telephoned the Director's Personal Assistant giving dates upon which he intended to take leave or simply to have e-mailed her in order to have given her those dates, but no evidence to that effect was given.
  1. In her submissions to the Employment Tribunal, Mrs Lloyd referred to the ECJ decision in Stringer and to the decisions of this Appeal Tribunal in NHS Leeds v Larner and in Fraser v South West London St George's Mental Health Trust to which we referred in paragraphs 21 and 19 respectively above.
  1. The Employment Tribunal noted that Underhill J in the Fraser case accepted that an employee on sick leave could take annual leave and that accorded with common sense and that decision was preferred to that in Larner's case. It also found that there had been no request for leave made by the Claimant and that the email of 11 May 2011 (which was referred to in paragraph 64 above) did not constitute a request for leave. The Employment Tribunal rejected the submission that the Claimant's holiday entitlement should be calculated by the reference to the date when his benefits expired namely 21 December 2011, which was when he reached the age of 60. Instead, the Employment Tribunal concluded that holiday entitlement can only be calculated by reference to the period of employment and in the case of the Claimant, the effective date of termination of his employment was 31 May 2011.
  1. The Employment Tribunal noted that there was no agreement during the Claimant's absence to any request to defer annual leave accrued during his sick leave. It went on to state that:-

"10.7… Insofar as Mr Lloyd did not in any event take his accrued annual leave during his sick leave – and he clearly took some – it follows that that did not carry over until the final year of his employment. That year was the holiday year 2011-2012 beginning 1 April 2011 as the effective date of termination of his employment was 31 May 2011 Mr Lloyd was paid the holiday accrued due for that period in lieu."

  1. The Employment Tribunal rejected the Claimant's argument that holiday leave accrued due until the termination of the PHI benefits on 21 December 2011, because those benefits:-

"do not and cannot extend the period of employment from the end of May until 21 December 2011.Accordingly no holiday leave accrues due for the period of 1 June to 21 December 2011."

  1. For those reasons, the Employment Tribunal rejected the Claimant's claim for holiday pay accrued due for his sickness absence and for the latter half of 2011.

(ii) The Court of Appeal's decision in Larner

  1. As we have explained, the Claimant appealed and when the matter came in front of us on 13 July 2012, we were told that the Court of Appeal had heard but had reserved judgment in the case of Larner. So we decided to adjourn consideration of this issue until the Court of Appeal had given its decision, which was on 25 July 2012. Mummery LJ, who gave the only reasoned judgment, explained that the issue in front of the Court of Appeal was:-

"1. In what circumstances is a worker, who has not taken paid annual leave in the relevant leave year because of absence from work on long-term sick leave, entitled to a payment in lieu?"

  1. In dismissing the appeal, he concluded at the end of his judgment that:-

"96. The law in the claimant's case is certain and clear:-

(1) The claimant was entitled to paid annual leave in the leave year 2009/10.

(2) She was prevented from taking her paid annual leave because she was sick.

(3) She was entitled to carry her untaken paid annual leave forward to the next leave year in 2010/11 without making a prior request to do so.

(4) As her employment was terminated in that year, before she could take the carried forward leave, she was entitled to payment on termination for the paid annual leave she had been prevented from taking."

  1. Both parties then helpfully produced skeleton arguments in which they contended that the decision of the Court of Appeal meant that they were bound to be successful. The case for the Claimant was that:-

a. He had made a request for three years of accrued holiday in March 2010 but the Respondent had deferred the matter. He questioned as to how the Respondent was able to confirm that his holiday pay would continue to accrue until termination and then refuse to pay it;

b. The Employment Tribunal had referred to this Appeal Tribunal in Larner stating its proposition that "such a proposition law would of course, if correct, be very much in favour of the claimant". The Court of Appeal has upheld that decision;

c. The Court of Appeal decided that for workers on long-term sick leave untaken holidays automatically carried forward into the next holiday year. As the Claimant was off away sick for the entire period from May 2007 until his dismissal in 2011, this accrued holiday should have carried over each subsequent year and then be paid on termination; and therefore

d. His situation is very similar to that of Mrs Larner and so he was entitled to 38 days holiday per year.

  1. The case for the Respondent is that the Court of Appeal accepted that in the case of a worker, who is unable or unwilling by reason of sickness to take annual leave in the year in which it falls due, he or she is not required to give notification to the employer in order for the undertaken annual leave to be carried over to the following year [paragraph 90].
  1. Mr McCombie accepts that if a worker has a right to take annual leave at a time outside the period of sick leave, it would be fundamentally inconsistent with that right to have to make the request during the sick leave to take annual leave at a time outside the sick leave because there is no requirement for compliance with regulation 15 of the WTR.
  1. His submissions are that:-

a. The issue of whether annual leave can be carried forward depends on what amounts and whether there has been an inability or unwillingness on the part of a claimant to take annual leave within the leave year. It is true in the Larner case it was her sickness that prevented her from doing so [85] and in the Court of Justice at the European Union ("ECJ") cases referred to in Larner, there were similar practical restrictions on the ability to take leave within the leave year;

b. In the present case there was no practical restriction on the Claimant's ability or willingness to take annual leave and he did in fact do so. So he does not fall in the category of a person who is unable or unwilling by reason of sickness to take sick leave. In consequence his case is similar to the unsuccessful claimant in the Fraser case; and

c. In any event there is a time limit on the carried forward provision, which was not dealt with in the Larner case.

  1. It is necessary to explain that the answer to this dispute depends on the interpretation and application of Article 7 of the Working Time Directive originally 1993/104/EC and now 2003/88/EC ("the Directive") and The Working Time Regulations 1998 ("the 1998 Regulations") which implemented article 7 and which must, if it is possible to do so, be interpreted and applied in accordance with it.
  1. Article 7 of the Directive provides that:-

"1. Member States shall take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and /or practice.

2. The minimum period of annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated."

  1. Article 13(1) of the 1998 Regulations deals with entitlement to 4 weeks' annual leave in each year which can only be replaced by a payment in lieu where the worker's employment is terminated. The length of paid leave was increased in 2007 by the introduction of Regulation 13A which confers an entitlement to additional annual leave in each leave year subject to a maximum aggregate entitlement of 28 days in each year from 2009.
  1. Regulation 13A(7) provides that additional paid leave may be carried forward by a relevant agreement.
  1. Regulation 13 does not contain any carried forward provisions. As was explained by Mummery LJ in Larner [25], Regulation 13, on its face, would appear to require leave to be taken in the course of the leave year in respect of it which it is due and that it does not permit untaken leave to be carried forward. This would have the consequence that any leave entitlement not taken by the end of the relevant leave year would be lost.
  1. Regulation 14 explains how the amount of compensation is to be calculated within Regulation 15(1) sets out a procedure for giving notice of the days elected for taking leave and it states that:-

"A worker may take leave to which he is entitled under regulation 13 [and regulation 13A] on such days as he may elect by giving notice to his employer in accordance with paragraph (3), subject to any requirement imposed on him by his employer under paragraph (2)."

  1. The Regulation does not contain a requirement for the worker to give notice nor that a worker is only entitled to take leave if he has given notice.
  1. There are provisions in Regulation 15(2) for a counter notice by an employer requiring the worker to take, or not to take leave or additional leave on a particular day. Regulation 15(5) provides that any right or obligation in Regulation 15(1) to (4) can be varied or excluded by agreement.
  1. The rate of payment in respect of the periods of leave is set out in Regulation 16 and it is only if there is an entitlement to leave that there will be an entitlement to payment. Mummery LJ extracted from the judgment of the ECJ, which supported the claims of the workers, a number of principles of which the most relevant are, with emphasis added and paragraph numbers removed:-

"Purpose of annual paid leave

(1) The purpose of paid annual leave guaranteed by EU law is different from the purpose of entitlement to sick leave, which is not governed by EU law. The purpose of the former is to enable a worker to enjoy rest, relaxation and leisure: it is for the protection of health and safety. The purpose of the latter is to enable a worker to recover from illness:

No derogation from principle of paid annual leave

(2) Paid annual leave "is a particularly important principle of Community social law from which there can be no derogation." That is borne out by the terms of Article 7(2), which only permit payment in lieu on termination of the employment relationship:. The right is "granted to every worker, whatever his state of health":]

The "opportunity principle" and its limits

(3) While it is for the Member States to lay down conditions for the exercise and implementation of the right, they must do so "without making the very existence of that right…subject to any preconditions whatsoever":].

(4) As a general rule, national legislation and practices may provide that a worker on sick leave is not entitled to take paid annual leave during sick leave, "provided, however, that the worker in question has the opportunity to exercise the right conferred by that Directive during another period": Equally, national legislation or practices may also allow a worker to take paid annual leave during sick leave.

(5) National legislation may also provide for the loss of the right to paid annual leave at the end of a leave year or of a carry forward period, "provided, however, that the worker who has lost his right to paid annual leave has actually had the opportunity to exercise the right conferred on him by the Directive":

Right of sick workers to carry forward paid annual leave

(6) "It must therefore be held that a worker, who ….is on sick leave for the whole year and beyond the carry-over period laid down by national law, is denied any period giving the opportunity to benefit from his paid annual leave".. National legislation providing for the loss or extinction of the right in such circumstances at the end of the leave year and/or the carry forward period laid down by national law would undermine the social right directly conferred by Article 7(1):]. That would be the case "even where the worker has been on sick leave for the whole of the leave year and where his incapacity for work persisted until the end of his employment relationship, which was the reason why he could not exercise his right to paid annual leave":

Payment on termination in lieu of taking paid leave

(7) After termination of the employment relationship, it is, of course, no longer possible for a worker to take paid annual leave for which that employer is liable: he has ceased to work for that employer. Provision is made in Article 7(2) for entitlement to an allowance in lieu, but the Article does not expressly lay down the way in which the allowance must be calculated:

(8) "…with regard to a worker who has not been able, for reasons beyond his control, to exercise his right to paid annual leave before termination of the employment relationship, the allowance in lieu to which he is entitled must be calculated so that the worker is put in a position comparable to that he would have been in had he exercised that right during his employment relationship"; i.e. the worker's normal remuneration."

  1. Having considered all the authorities Mummery LJ summarised the Article 7 rulings on paid annual leave in this way with emphasis added:-

"48. Apart from the dispute about whether a leave request is required, which I will put to one side for the moment, the following would appear to be common ground between the parties:-

(1) Article 7 has direct effect against NHS Leeds, as an emanation of the State, in the ET, the EAT and the courts.

(2) A worker absent on sick leave, as the claimant was, is still a "worker" (though not at work) and may, during absence on sick leave, accrue entitlement to paid annual leave.

(3) If a worker on sick leave is unable or unwilling to take paid annual leave because of sickness, as was the case with the claimant [in Larner], paid annual leave must be granted in another period, if necessary beyond the leave period concerned.

(4) A worker absent on sick leave throughout a leave year, as the claimant was, does not lose entitlement to paid annual leave at the end of that year, or the right to take paid annual leave at another time when the worker is not sick.

(5) The carry forward period for paid annual leave must be substantially longer than the reference period.

(6) Any allowance on termination of employment in lieu of paid annual leave must place the worker in the same position as if he had exercised the right to take paid annual leave during employment and so must be calculated in accordance with the normal remuneration payable for the period of paid annual leave which the worker has not been able to take because of sickness"

  1. Mummery LJ then went on to consider how the 1998 Regulations should be read in the light of the Rulings of the Court of Justice and he explained that:-

"90. First, in relation to the carrying forward of unused annual leave, regulation 13 (9) would be construed to read as follows with emphasis added:-

'Leave to which a worker is entitled under this regulation may be taken in instalments, but-

*

(a) it may only be taken in the leave year in respect of which it is due, save where the worker was unable or unwilling to take it because he was on sick leave and as a consequence did not exercise his right to annual leave.' *

91. Secondly, in relation to payment on termination of employment, regulation 14 would be read and interpreted to include the following insertion-:

'(5) Where a worker's employment is terminated and on the termination date he remains entitled to leave in respect of any previous leave year which carried over under regulation 13(9)(a) because of sick leave, the employer shall make him a payment in lieu equal to the sum due under regulation 16 for the period of untaken leave.'"

  1. Mummery LJ also added that there was no contractual requirement in that case for a prior request to be made for holiday entitlement to be carried forward. He left open for consideration in a subsequent case the issue of whether there had to be a prior leave request in the light of the decision in Georg Neidel v Stadt Frankfurt am Main (Case C3-33/10) [2012] IRLR 607, which had been decided after the oral hearing in the Court of Appeal in the Larner case.

(iii) Discussion

  1. It is abundantly clear that Mummery LJ's analysis of the EU jurisprudence shows that many of the issues for determining the claim for holiday pay were understandably not explored by the Employment Tribunal. We are not criticising the Employment Tribunal for this because they did not have the benefit of Mummery LJ's powerful exposition of the law and which adopted different reasoning from the approach adopted by the Employment Appeal Tribunal in that case.
  1. In consequence, the Employment Tribunal did not consider or reach conclusions on many critical issues such as, but not limited to first, during each period for which claims for holiday pay were made, whether the Claimant was "unable or unwilling to take paid annual leave because of sickness"; second, in respect of each of the 30 days when the Employment Tribunal concluded that the Claimant actually took holiday, whether the days fell in his working week rather than on weekends or on public holidays; third, in respect of each period when the Claimant was entitled to holiday pay, the amount of holiday pay he should have received and the amount of sickness pay which he actually received; fourth whether the Claimant had to make a request to carry forward an entitlement to annual leave which had accrued.
  1. There are other matters, which might to have be considered but the list set out in the previous paragraph shows the amount of fact-finding required of an Employment Tribunal and we consider that this should be remitted to an Employment Tribunal. The issue arises as to whether this should be to the same Employment Tribunal or to a different Employment Tribunal. The Claimant wants a different Employment Tribunal, while the Respondent wants it to be remitted to the same Employment Tribunal as dealt with this earlier.
  1. We have concluded that it should go to a different Employment Tribunal for two reasons. First, the issues that will have to be considered by the Employment Tribunal will relate to matters occurring as long ago as 2007 and so this matter should be resolved as soon as possible without having to reassemble the existing Employment Tribunal. Second, the original Employment Tribunal would not be at an advantage in resolving this matter when compared with any other Employment Tribunal, as the issues to be resolved are so different as a result of the decision of the Court of Appeal in Larner.
**Conclusions**
  1. For the reasons set out above,

a. The claim for the golden handshake has to be dismissed as it was not included in the original ET1and the Claimant did not obtain permission to amend the claim to include it;

b. The claim for compensation for the loss of the PHI benefit fails, because (i) the Claimant has received the value of the PHI benefit due until his 60th birthday which had originally been received by the Respondent and then passed on to him in full with the result that he has suffered no loss; and in any event; (ii) contrary to the Claimant's case, there was no implied term that the Respondent would not terminate the contract of employment of an employee who was in receipt of those benefits while the employee was incapacitated from work where the effect would be to disqualify the employee from receiving the benefits because after the PHI cover was taken out, the Claimant and the Respondent entered into a contract of employment which contained "the entire understanding between the parties" but which did not refer to the PHI cover; and (iii) the term could not be implied as it was inconsistent with clause 10.2 of the contract of employment for the reasons set out in paragraph 54 above and

c. The claim for holiday pay has to be remitted to a different Employment Tribunal in the light of the approach stipulated by the Court of Appeal in the Larner case.

  1. We apprehend that there are aspects of this judgment, which will be a disappointment to the Claimant, but he has the consolation that every point that could be raised on his behalf has been presented with admirable skill by Mrs Lloyd. We cannot part with this case without encouraging the parties to try to resolve outstanding issues by mediation.

Published: 15/11/2012 17:37

Sign up for free email alerts

Email address
First name
Last name
Receive daily
Receive weekly
I agree to this site's terms and conditions

message