Christie v Johnston Carmichael

An employee is not dismissed merely because the employer stops salary payments or accepts the employee’s repudiatory breach. Dismissal depends on termination by the employer, or resignation in circumstances within section 95 of the Employment Rights Act 1996. A contractual right to work during notice is not free-standing. It depends on construction of the particular contract and its surrounding circumstances. Garden leave is permissible where the contract gives no such right and the employee’s skills are not materially prejudiced. A properly pleaded case is required before an employment tribunal can determine a dismissal occurring on a particular date.

The Claimant, employed by the Respondent as a senior client relationship manager, resigned alleging constructive dismissal after arrangements were made to reallocate his client portfolio. The Respondent accepted his three-month notice and placed him on garden leave. The Claimant subsequently asserted that the Respondent had dismissed him by stopping salary and benefits with effect from 14 March 2008.

The Employment Tribunal rejected constructive dismissal but held that the Respondent had wrongfully dismissed the Claimant on 28 March 2008, thereby refusing the Respondent’s claim for repayment of course fees. The appeal concerned whether there had been dismissal on 28 March and whether garden leave was contractually permissible. The Respondent cross-appealed the refusal to recover course fees.

1. Appeal dismissed; cross-appeal allowed in part. The ET1 did not give fair notice of a case that the Claimant had been dismissed on 28 March 2008, whether by the Respondent’s letter of 27 March or by stopping pay. The Tribunal therefore ought not to have determined that issue.
2. The Claimant was not constructively dismissed. His resignation gave contractual notice ending the employment on 12 June 2008. The Respondent’s letter of 27 March accepted the Claimant’s repudiatory breach when he stated that he no longer regarded himself as bound by the contract and had departed from his notice. It did not constitute dismissal by the Respondent, and there was no wrongful dismissal.
3. There was no free-standing right to work during notice. Whether such a right exists depends on construction of the individual contract in its factual context. The authorities concerning garden leave, including Provident Financial Group plc v Hayward, William Hill Organisation Limited v Tucker, Langston v Amalgamated Union of Engineering Workers and SG & R Valuation Service Co v Boudrais and others, did not establish that the Claimant had such a right.
4. The Claimant’s duties were not unique, there was no sufficient risk of deskilling, and he remained free to study and pursue continuing professional development. The Respondent was entitled to place him on garden leave. In any event, the proposed garden-leave claim sought only salary and benefits which were contractually payable during the notice period and served no practical remedial purpose.
5. Because the finding of wrongful dismissal could not stand, the basis for refusing recovery of the agreed course fees disappeared. The Claimant was ordered to pay £2,188 to the Respondent. The remaining salary and benefits issues were remitted to the Employment Tribunal for determination of the outstanding review application.

• Employment Appeal Tribunal: The appeal from the Employment Tribunal’s judgment registered on 24 March 2009 was dismissed. The cross-appeal was upheld to the extent of ordering repayment of course fees and the remaining financial issues were remitted for review.