Duncan v Stockland Developments (UK) Ltd

Whether an employment communication creates or varies contractual rights depends on an objective assessment of what the employer’s words and conduct would communicate to the particular employee in the relevant circumstances. Subjective intentions do not directly decide the issue, although a party’s understanding and later conduct may provide evidence of whether an agreement was objectively made.

An appellate court must read an Employment Tribunal’s reasons as a whole. Imperfect drafting, apparent inconsistency, or an irrelevant subsidiary reason will not justify overturning a decision where its decisive findings on offer, agreement and intention to create legal relations are clear and permissible.

The claimant, the respondent company’s company secretary, was dismissed for redundancy. He received an enhanced payment calculated at three weeks’ pay for each year of service. He claimed four weeks’ pay, relying on an extract from an internal management email forwarded to him in February 2010.

The Employment Judge dismissed the claim on the basis that the email did not amount to an offer to vary the employment contract or a contractual variation. The claimant appealed, contending that the Judge’s findings were inconsistent and that the reasons given could not support that conclusion.

The central issue was the legal effect, if any, of the communication of 16 February 2010.

1. Appeal dismissed. The Employment Judge’s decision, read fairly and as a whole, contained sufficiently clear and permissible reasons for finding that the email created neither an offer nor a binding variation of the claimant’s contract.

2. The governing inquiry was objective. The question was what the employer’s words and conduct would have conveyed to this particular employee, in the known employment context, about an intention to be contractually bound. Subjective intention was not determinative. However, uncertainty about what had been agreed, and subsequent conduct, could assist the objective inquiry.

3. The Judge’s finding that the email was sent to reassure the claimant did not compel the conclusion that it was a contractual undertaking. The email was an unqualified extract from an internal management communication. It did not state that it was an offer or contractual commitment, did not identify a precise calculation applicable to the claimant, and could permissibly be treated as a statement of management intention rather than a binding promise.

4. The Judge was entitled to treat the claimant’s uncertainty about the meaning of the communication, and his failure to invoke it as a contractual entitlement during the later redundancy process, as evidence bearing on whether an agreement had objectively been made. A binding commitment made in that context would likely have been referred to as such later.

5. The Judge’s reliance on the claimant’s failure to prove that an Australian redundancy policy applied was irrelevant. That error did not invalidate the decision because the independent conclusions on offer, agreement and intention to create legal relations were sufficient. Although inconsistencies in the factual findings were concerning and might otherwise have required remission, they were not decisive.

• Employment Appeal Tribunal: The appeal was dismissed: [2013] UKEAT 0013_13_0808.
• Employment Tribunal, Glasgow: Employment Judge Macleod dismissed the claimant’s contractual redundancy-payment claim on 9 January 2013.