Rose v Dodd

This Court of Appeal dismissed the appellant's claim that a Law Society intervention and the automatic suspension of a sole practitioner's practising certificate operated as an event which automatically terminated the employee's contract of employment. The court held that the intervention under the Solicitors Act 1974 did not itself terminate contracts of employment to which the Law Society was not a party and that, where the parties continued the employment relationship pending challenge or transfer, the contract was not frustrated or brought to an end by operation of law. The court applied section 136(5) of the Employment Rights Act 1996, the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE) and principles on partnership dissolution under the Partnership Act 1890, concluding that TUPE could transfer liabilities where the contract survived until the transfer.

Background and parties. The appellant, a conveyancing secretary employed by Mr Dodd, a sole practitioner, claimed redundancy pay, notice pay and unpaid wages following a Law Society intervention on suspicion of dishonesty which resulted in suspension of the practising certificate. The Law Society appointed agents who told staff they were redundant; the practice was subsequently transferred as a going concern to a new firm. The employment tribunal held there had been a TUPE transfer and dismissed the appellant's claims; the Employment Appeal Tribunal dismissed her appeal. The appellant appealed to the Court of Appeal.

Nature of the claim. The appellant sought redundancy payments and pay in lieu of notice and asserted her employment ended on the date of the intervention (9 December 2002).

Issues framed.

• Whether the Law Society's intervention or the suspension of the practising certificate terminated the appellant's contract of employment as a matter of law so as to constitute dismissal by the employer under section 136(5) of the Employment Rights Act 1996;
• Whether TUPE applied to transfer her employment to the purchaser firm if the contract subsisted immediately before the transfer;
• For partnership cases, whether intervention causing dissolution of the partnership automatically terminated employment contracts.

Reasoning and conclusions. The court analysed the statutory powers under the Solicitors Act 1974 and Schedule 1, observing that intervention seeks to protect the public and does not include express powers to dismiss staff. The Law Society and its agents were not parties to employment contracts and had no clear statutory authority to terminate them; the agents' statements to staff that they were redundant were not effective dismissals by the Law Society or the agents. The Court applied section 136(5) ERA 1996 and held the intervention was not an event which, in the circumstances, terminated the appellant's employment by operation of law. Because the employment relationship continued and the practice was transferred as a going concern, TUPE applied and liabilities passed to the transferee. The court further discussed partnership cases, concluding that dissolution may terminate contracts but that this depends on factual and contractual circumstances and on section 38 Partnership Act 1890; TUPE applies where the contract survives until transfer. The appeal was dismissed.

Appeal dismissed. The Court held there was no error of law in the tribunal's decision that the Law Society intervention did not, of itself, terminate the appellant's contract of employment; the Law Society and its agents had no express statutory power to dismiss employees, the sole practitioner did not terminate the contract, and the employment survived until the transfer so that TUPE applied. The court further explained that dissolution of a partnership on intervention may terminate employment contracts in some cases but that this depends on the facts, contractual terms and section 38 of the Partnership Act 1890.

Appeal from the Employment Appeal Tribunal (HHJ Serota QC) (UKEAT/05/17/04/ILB), which had dismissed the appellant's appeal against the employment tribunal on 30 November 2004. Permission to appeal to the Court of Appeal was granted by Maurice Kay LJ on 18 January 2005. Judgment of the Court of Appeal: [2005] EWCA Civ 957 (27 July 2005).