Kearns v Glencore UK Ltd

A contractual term cannot be implied merely because it would be fair, reasonable or commercially desirable. The court must identify the objective meaning of the agreement against its relevant background. A collateral contract cannot arise solely by implication where no underlying agreement has been made.

In assessing repudiatory breach by an employee, the court may consider the employee’s conduct as a whole, including earlier incidents together with the final misconduct. Repeated failure to attend work or reasonable meetings, caused by excessive alcohol consumption, may amount to repudiatory breach of the implied duty of trust and confidence. The same conduct may alternatively constitute contractual gross misconduct justifying summary dismissal.

The claimant was employed as an oil trader by the defendant and was summarily dismissed after failing to attend business meetings in Singapore and remaining unavailable during a working day. The defendant relied on the claimant’s repeated earlier lateness and absence, much of which was linked to excessive alcohol consumption.

The claimant claimed damages for wrongful dismissal and asserted that he had an implied or collateral entitlement to 25 share options. The court struck out and dismissed the share-option claims at the beginning of the trial. The remaining issues were whether the summary dismissal breached the employment contract and, if so, what damages were recoverable.

1. Share options. The employment contract contained no provision for share options. The options were granted by an employee benefit trust, and the vesting provisions arose under a separate profit participation agreement which could not be altered by an agreement between the claimant and the defendant. Applying the approach in Attorney-General of Belize v Belize Telecom Ltd [2009] 1 WLR 1988, there was no basis for implying a term that the options would vest before dismissal. The claims were struck out and dismissed.
2. Reason for summary dismissal. The relevant question was whether there was a proper reason justifying summary dismissal, rather than whether every reason given by the employer was factually correct, following Boston Deep Sea Fishing and Ice Co v Ansell (1888) 39 Ch. D. 339.
3. The claimant had repeatedly arrived late or failed to attend work after drinking excessively. On 11 October 2010 he failed to attend a meeting with a business counterparty and a reconvened team meeting, despite reasonable instructions to attend. The court found that he had missed both meetings because he had been drinking and had slept through them.
4. Applying the context-specific approach in Tullett Prebon Plc v BGC Brokers LP [2011] IRLR 420, the court held that the conduct had to be assessed objectively and against the whole employment relationship. Following London Borough of Waltham Forest v Omilaju [2004] EWCA Civ 1493, earlier incidents could be considered with the final incident where together they demonstrated repudiation. The claimant’s conduct amounted to repudiatory breach of the contract and the defendant was entitled to accept that breach by summary dismissal.
5. Alternatively, the conduct constituted gross misconduct under the contractual gross-misconduct provisions in the disciplinary policy. The claim therefore failed and was dismissed.

Not stated in the judgment.