Harper v Virgin Net Ltd

The statutory unfair-dismissal scheme defines both the qualifying period and the effective date of termination. Where an employer summarily dismisses an employee, the effective date is extended only by the statutory notice period, not a longer contractual period. An employee who falls short of the qualifying service has no statutory unfair-dismissal right to lose. Damages for wrongful dismissal cannot recover compensation, or a supposed loss of chance of obtaining compensation, under the statutory scheme. That would circumvent Parliament’s chosen limits and forum.

Sally Harper was summarily dismissed 33 days before completing one year’s service. The Employment Tribunal found wrongful dismissal and awarded contractual notice pay plus a further sum calculated as unfair-dismissal compensation, subject to the statutory cap. The Employment Appeal Tribunal allowed Virgin Net’s appeal, removed the additional sum and left £9,514.04 undisputed. The issue before the Court of Appeal was whether that additional loss could be recovered as damages for breach of contract because the contractual notice period was longer than the statutory period.

1. Appeal dismissed. The appellant was entitled to damages for the contractual notice period, but not to the additional sum representing compensation for unfair dismissal.
2. Under sections 94(1) and 108(1) of the Employment Rights Act 1996, the right not to be unfairly dismissed depends on the prescribed continuous employment ending at the effective date of termination. For a summary dismissal, section 97(2), read with section 86(1), extends that date only to the end of the applicable statutory notice period. A longer contractual notice period does not extend the statutory qualifying period. Parliament had deliberately chosen statutory notice in the legislation responding to Brindle v H W Smith (Cabinets) Ltd [1972] IRLR 125.
3. The reasoning in Johnson v Unisys Ltd [2001] UKHL 13 applied. The courts could not create, through contractual damages, a remedy which circumvented statutory limits on eligibility, compensation or forum. Ms Harper had never possessed a statutory right to compensation for unfair dismissal; she had not lost an existing right.
4. The additional award could not properly be characterised as the loss of a chance. Asking what compensation an employment tribunal would have awarded if proper contractual notice had been given amounted to awarding the statutory compensation itself. It was artificial and would produce inconsistent results depending on whether statutory or contractual notice was longer. Employment tribunals should not use wrongful-dismissal damages to circumvent the legislative scheme.
5. Lord Justice Chadwick agreed, emphasising that Parliament’s choice to use statutory rather than contractual notice had to be respected. Lord Justice Scott Baker agreed with both judgments.

• Court of Appeal (Civil Division): On 10 March 2004, dismissed the appeal and upheld the EAT’s removal of the additional unfair-dismissal-related award.
• Employment Appeal Tribunal: On 9 July 2003, allowed Virgin Net’s appeal from the damages decision of the Employment Tribunal and reduced the award to £9,514.04.
• Employment Tribunal, London (Central): On 29 November 2001, found that Harper had been wrongfully dismissed. On 8 May 2002, it awarded contractual notice damages and an additional sum calculated by reference to unfair-dismissal compensation.