MR CHARLES RAW v GUY CARPENTER & CO LIMITED

On an application for summary judgment, the court must decide whether the claimant has no real prospect of success, without conducting a mini-trial. Contested issues involving credibility, contractual construction, affirmation and the operation of TUPE ordinarily require determination at trial where they cannot fairly be resolved summarily.

A bonus expressly awarded for past services may create a binding contractual obligation. By contrast, a retention award conditional on continued employment and acceptance of specified terms creates no entitlement where the employee fails to accept the award or execute required restrictive covenants. Damages for wrongful dismissal are assessed on the assumption that the employer performs the contract in the manner most beneficial to it, with mitigation and credit for sums received.

The claimant brought a wrongful dismissal claim against his alleged employer, seeking damages for bonus and deferred stock awards and unpaid salary. He alleged constructive dismissal following announcements concerning the future leadership structure of the defendant’s business.

The defendant applied to strike out the claim or obtain summary judgment. It argued that JLT Reinsurance Brokers Ltd was the proper defendant, that the claimant had resigned rather than been dismissed, and that the March 2019 letters conferred no enforceable rights. The claimant applied for permission to add JLT as a defendant.

The court was required to determine which issues could properly be disposed of without a trial, including the status of the employer, wrongful dismissal, affirmation, unpaid salary and the contractual effect of the two March 2019 letters.

1. The defendant’s application succeeded in part. Summary judgment was entered and the corresponding claims were struck out in respect of the £4,000 salary claim and the claim under the 4 March 2019 retention letter. The claim under the other March 2019 letter remained. Permission was granted to amend the claim to add JLT as a defendant.

2. For strike-out purposes under CPR r.3.4(2)(a), the defendant had to show that the claim disclosed no reasonable grounds. Summary judgment required proof that the claimant had no real prospect of succeeding. The court was not to conduct a mini-trial. The disputed operation of TUPE could not be resolved because there was insufficient direct factual evidence concerning the business integration and transfer dates.

3. The claimant had a real prospect of establishing constructive wrongful dismissal. The significance of the leadership emails, the claimant’s credibility and whether continuing to work under protest, remaining on garden leave and receiving salary amounted to affirmation were matters for the trial judge. The approach in W E Cox & Toner (International) Ltd v Crook [1981] IRLR 443 and Rigby v Ferodo Ltd [1988] ICR 29 (HL) illustrated that continued work under protest may be equivocal.

4. The £4,000 claim could not succeed because the claimant had received salary equivalent to the contractual notice period. Damages for wrongful dismissal are subject to mitigation and credit for sums received. The distinction between a debt claim for unpaid wages and a damages claim was material.

5. The March 2019 letter created a real prospect of a binding obligation to pay the declared bonus for past services. Any discretion under the bonus scheme had to be exercised bona fide, rationally and without perversity, applying the principle in Horkulak v Cantor Fitzgerald [2004] EWCA Civ 1287; [2005] ICR 402. The claim therefore required trial assessment.

6. The 4 March 2019 retention award was materially different. It was subject to continued employment, formal acceptance of the award terms and execution of a restrictive covenants agreement. Those requirements defined the conditions for creating entitlement and did not exclude or restrict liability. The claimant had failed to satisfy them and had no real prospect of establishing entitlement.