Harper v Virgin Net Ltd

The Court of Appeal dismissed the employee's appeal against the Employment Appeal Tribunal's allowance of the employer's appeal from an Employment Tribunal damages award. The central legal principle is that damages for breach of contract for wrongful dismissal cannot be used to circumvent the statutory scheme for unfair dismissal, including the qualifying period and the statutory rule on the effective date of termination (see Employment Rights Act 1996 sections 94, 97, 86 and 108). The court followed the House of Lords in Johnson v Unisys that the existence of a statutory remedy for unfair dismissal limits the development of parallel common law remedies and that courts should not rewrite Parliament's chosen allocation of risk between employer and employee.

This was an appeal from the Employment Appeal Tribunal to the Court of Appeal. The Employment Tribunal had found that Ms Harper was wrongfully dismissed on 2 March 2001, 33 days short of the one year required to qualify to bring a statutory unfair dismissal claim under the Employment Rights Act 1996. The tribunal awarded (a) three months' net pay for breach of contractual notice and (b) an additional sum representing the compensation she would have received had she been able to bring and succeed in a statutory unfair dismissal claim (described as "loss of opportunity to claim unfair dismissal").

The respondent employer appealed to the Employment Appeal Tribunal, which allowed the appeal on 9 July 2003 and reduced the award to the undisputed contractual notice element (£9,514.04). The applicant appealed to the Court of Appeal.

Issues before the Court of Appeal:

• Whether damages for breach of contract for wrongful dismissal can include compensation equivalent to what would have been recoverable under the statutory unfair dismissal scheme where the employee fell short of the qualifying period.
• How the "effective date of termination" should be treated where dismissal is summary but contractual notice is longer than statutory notice.

The court reviewed the legislative history (including the response to Brindle v Smith) and the current statutory provisions (in particular section 97 of the Employment Rights Act 1996, read with sections 86 and 108). It applied the principle in Johnson v Unisys that the statutory remedy precludes the development of overlapping common law remedies that would undermine Parliament's scheme. The court held that Parliament had deliberately chosen to postpone the effective date of termination only by reference to statutory notice and thus to exclude contractual notice from extending statutory protection. To permit common law damages to make good the loss of the right to bring a statutory unfair dismissal claim would effectively rewrite that statutory choice and would undermine statutory limits and specialist tribunal jurisdiction. The appeal was dismissed.

Appeal dismissed. The Court of Appeal held that damages for wrongful dismissal cannot be used to replicate or circumvent the statutory unfair dismissal regime or to impose financial burdens on employers that Parliament chose not to impose; the statutory scheme (notably Employment Rights Act 1996 sections 97, 86 and 108) governs the effective date of termination and the qualifying period and prevents recovery of compensation for unfair dismissal where the employee has not met the statutory gateway.

Employment Tribunal (London Central) found wrongful dismissal (decision entered 29 November 2001) and assessed damages (8 May 2002). Employment Appeal Tribunal allowed the employer's appeal on damages and reduced the award on 9 July 2003. Appeal to the Court of Appeal ([2004] EWCA Civ 271) heard 3 February 2004 and dismissed 10 March 2004.