Lloyd v BCQ Ltd

An implied term cannot negate an express contractual term. A permanent health insurance arrangement will not justify implying a restriction on dismissal where the written employment contract, made after the arrangement began, contains an entire-agreement clause, gives no contractual entitlement to the insurance, and expressly permits termination during prolonged incapacity.

An Employment Tribunal need not address every authority or give elaborate reasons if its essential factual conclusions and legal basis are clear. Where later binding authority materially changes the applicable approach to accrued annual leave during sickness absence, and necessary factual issues remain unresolved, the holiday-pay claim should be remitted for determination.

The Claimant, a works director, had been absent through ill health from 2007 until his dismissal in May 2011. He appealed against Employment Tribunal decisions dated 16 December 2011 and 10 February 2012.

His appeal raised three issues: a contractual payment described as a golden handshake; compensation for alleged loss of permanent health insurance benefits; and accrued holiday pay during sickness absence. The Employment Tribunal had dismissed the first two matters and rejected the holiday-pay claim.

The central issues were whether the Tribunal had jurisdiction over the unamended contractual claim, whether a term protecting health-insurance benefits could be implied into this contract, and how holiday entitlement during sickness absence had to be assessed following the Court of Appeal's decision in NHS Leeds v Larner [2012] EWCA Civ 1034.

1. Appeal allowed in part. The golden-handshake and permanent-health-insurance grounds were dismissed. The holiday-pay issue was remitted to a different Employment Tribunal.

2. The Tribunal had no golden-handshake claim before it. The Claimant had not obtained permission to amend his ET1 to add the contractual claim under clause 10.2. A respondent's preparedness to answer a possible claim did not establish that permission had been granted. The Tribunal therefore lacked jurisdiction to determine it. The EAT's view that the claim would in any event probably fail was expressly provisional and was not part of its reasons.

3. The PHI claim failed because the Claimant had received in full the value of the benefits payable under the policy. In any event, no term preventing dismissal while he received PHI benefits could be implied. Clause 21.3 stated that the written contract contained the entire understanding between the parties and superseded prior arrangements. The contract post-dated the introduction of the PHI policy, did not confer a right to PHI cover, and contained an express incapacity-dismissal provision. The proposed implication would therefore contradict the express contract. Aspden was an exceptional case concerning inconsistent contractual terms and did not assist the Claimant.

4. The Tribunal's reasons on PHI were adequate. It had made clear that the all-terms provision, the absence of a contractual PHI entitlement, and the absence of loss were decisive. A Tribunal was not required to refer expressly to every authority.

5. The holiday-pay decision could not stand. The Court of Appeal's approach in Larner required findings on whether, in each relevant period, the Claimant was unable or unwilling because of sickness to take paid annual leave; whether alleged leave days were working days; the sums due and paid; and whether any request was required. Those issues had not been determined. Remittal to a different Tribunal was appropriate because substantial fact-finding was required on old events and the original Tribunal had no material advantage.

• Employment Appeal Tribunal: Appeal allowed only as to holiday pay. That issue was remitted to a different Employment Tribunal; the golden-handshake and PHI grounds were dismissed.
• Employment Tribunal, Bedford: Decisions dated 16 December 2011 and 10 February 2012 dismissed the relevant contractual and holiday-pay claims. The earlier decision also dismissed claims for unfair dismissal, age discrimination and victimisation.