Boyo v Lambeth London Borough Council

A wrongful dismissal is a repudiation of the contract of employment. Although the repudiation requires acceptance, damages do not ordinarily continue until acceptance. They are assessed by reference to the earliest date on which the employer could lawfully have ended the employment.

Where contractual disciplinary procedures restrict dismissal, damages may include the reasonable time needed to complete them, followed by the contractual notice period. However, disciplinary rules stating that misconduct renders an employee liable to disciplinary action do not necessarily require the employer to initiate that procedure. An unequivocal termination remains a dismissal even where the employer mistakenly describes the contract as frustrated.

The Council employed the plaintiff as an accountant under a contract terminable on one month's notice. Contractual disciplinary rules addressed dismissal for gross misconduct. After criminal charges were brought against him, the Council suspended him and later stated that bail conditions had frustrated his contract. It stopped his salary and sent his employment records.

The Council abandoned its frustration and misconduct defences during the County Court trial. Judge James consequently treated the Council's letter as a wrongful dismissal. He awarded £8,050, calculated by reference to five months for disciplinary proceedings and one month's notice.

The plaintiff appealed, claiming continuing salary and substantially greater damages. The Council cross-appealed against the five-month allowance. The principal questions concerned the effect of wrongful repudiation, the date and measure of loss, and the relevance of the disciplinary procedure.

1. Appeal and cross-appeal dismissed. Ralph Gibson LJ, Staughton LJ and Sir Francis Purchas agreed that the Council's letter of 29 October 1991 unequivocally communicated that the plaintiff would no longer be employed or paid. It was therefore a wrongful dismissal. Its effect did not depend on the correctness of the Council's assertion that the contract had been frustrated.
2. Per Ralph Gibson LJ, the majority decision in Gunton v Richmond Borough Council [1980] ICR 755 bound both the County Court and the Court of Appeal. On that authority, repudiation of an employment contract requires acceptance. The plaintiff did not accept the Council's repudiation merely by pursuing an action which asserted that his employment continued. He accepted it at trial.
3. Nevertheless, the date of acceptance did not extend the recoverable period. Under Gunton, damages arose from the wrongful exclusion and were limited to the period for which the employee could then insist on continued employment. Where a contractual disciplinary procedure restricted dismissal, that period comprised the reasonable time required for the procedure, followed by the contractual notice period. The plaintiff could not recover salary until trial and then claim additional prospective loss.
4. The disciplinary rules did not oblige the Council in every case to initiate or complete disciplinary proceedings before dismissal. They stated that a breach rendered an employee liable to disciplinary action. The Council committed no contractual breach by deciding, in good faith and on reasonable grounds, not to initiate that procedure. Accordingly, no disciplinary period should strictly have been included. The Council's concession below nevertheless entitled the judge to include one.
5. The judge's allowance of five months for disciplinary proceedings was generous but supported by the material relating to this case. Although a judge should disclose relevant personal knowledge intended to be used, any error in referring to experience of the Council's conduct in other litigation did not justify disturbing the award.
6. Staughton LJ stated that, apart from binding authority, he would have held that direct repudiation terminates an employment contract and would generally have allowed only the notice period. Sir Francis Purchas similarly favoured an exception preventing an employee from rejecting an unequivocal dismissal. Those observations did not alter the court's application of Gunton.

1. Court of Appeal: The plaintiff's appeal against the amount of damages and the Council's cross-appeal against the allowance for disciplinary proceedings were dismissed.
2. Lambeth County Court: His Honour Judge C P James entered judgment for the plaintiff for £8,050 damages for wrongful dismissal, with interest and costs.