Summary – Payment of notice pay
198/2011
Jersey Employment Tribunal
9
October 2012
For the Applicant: The applicant represented
himself
For the Respondent: Mr Lewis Buckley,
Director
Employment (Jersey) Law 2003
Notification of the tribunal’s decision
This award,(subject to the right of appeal to the Royal Court as set out in
the law) is legally binding and is the final decision of the tribunal. Each party, if applicable, is
responsible for establishing their liabilities with regard to Social Security
and Income Tax payments
the Chairman:
THE FACTS
1.
Mr
Chatfield was employed as a Trust Manager. Some issues concerning Mr
Chatfield’s work came to the attention of HD, the Managing Director, and
he resolved that Mr Chatfield should cease to be involved with the Respondent
forthwith. HD was absent from the office at the time on business and contacted
his fellow directors with an instruction that Mr Chatfield should be suspended
from work until HD had an opportunity to discuss it with them on his return to
the office the next day. Accordingly on the 27th September 2010 Mr
Chatfield was verbally informed that he was suspended on full pay until further
notice and he should not attend the office. The Tribunal learned that the terms
of Mr Chatfield’s suspension were not recorded in writing by the
Respondent.
2.
HD
returned to the office on the 28th September 2010 and in the
afternoon convened a Board Meeting of his fellow directors where it was
resolved that the employment of Mr Chatfield would be terminated and that the
Respondent would purchase the value of Mr Chatfield’s trust business under
his administration on terms to be agreed by the parties.
3.
The
Tribunal were shown a copy of Mr Chatfield’s employment contract which
stated that Mr Chatfield’s employment could be terminated by the
Respondent by 3 months’ notice in writing.
4.
Mr
Chatfield came into the office for a meeting with HD after work on the 28th
September 2010. Mr Chatfield gave evidence that HD said that ‘he was not
cancelling the contract of employment or kicking him out or pinching his
clients’ but that Mr Chatfield could not work in the office anymore. Mr
Chatfield recalls HD saying that the Respondent would purchase his clients from
him and there was a brief discussion of the sums involved. HD recalled the
meeting quite differently in his evidence. HD said that he told Mr Chatfield
words to the effect that ‘they had to end this arrangement’ and
‘you’re going’ and we’re going to buy you out’.
HD was quite clear that at that point he wanted the Respondent’s
employment of Mr Chatfield to end immediately and that the financial arrangements
concerning the purchase of his folio of clients would follow.
5.
Mr
Chatfield gave evidence that he was very confused by what had been said at the
meeting with HD on the 27th September 2010 and he was not sure if he
had lost his job or was still on suspension and that he tried to speak to HD
about the matter several times over the next few days but nothing was clarified
for him. HD gave evidence that Mr Chatfield was very stressed about the
situation and in his opinion was simply not listening to what he was being told
by HD. The Tribunal heard evidence that the Respondent had ‘locked
out’ Mr Chatfield from its IT systems at this time in order to ensure
that he was unable to undertake any work. Both Mr Chatfield and HD gave an
account of an incident that occurred at this time whereby Mr Chatfield brought
some cheques to HD for signature and HD expressed surprise that Mr Chatfield
was still in the office and told him to leave immediately as ‘it was not
business as usual’. Mr Chatfield told the Tribunal that this happened on
the 4th October but his own time line, prepared for the hearing,
records this incident as having taken place on the 30th September
2010.
6.
From the
evidence heard it was apparent to the Tribunal that Mr Chatfield and HD were in
negotiation regarding the terms of the buyout of Mr Chatfield’s portfolio
during this time.
7.
The
Tribunal were referred to a long email sent by Mr Chatfield to HD on the 6th
October 2010 where he expressed being ‘unsure what is happening at the
moment’ and that, ‘At the moment I am to say the least a little
unsure exactly where we are in agreeing anything as during the few meetings
that we have had different things have been said which leaves me unsure what
the present situation is’. Mr Chatfield added that, ‘The last thing
that you said to me is perhaps we should just carry on with the present
arrangement until the end of December [but] I am unsure exactly what the
present arrangement is and perhaps you could let me know’. Mr Chatfield
set out the arrangements concerning the purchase of his clients as he saw it but concluded
his message by saying that ‘I do need to sort out what exactly is
happening and come to some sort of basic agreement before I leave to do the [a yachting
race]’. The Tribunal were shown HD’s reply which was that, ‘I
do not accept what you say is correct. I feel you are misrepresenting our
discussions’. HD finished the reply by suggesting that they meet on
Monday 11th October 2010 to discuss the situation.
8.
The
Tribunal were shown a draft agreement dated 13th October 2010
(‘the 13th October Agreement’) which referred to a
meeting of the parties held on Monday 11th October 2010 and sought
to confirm the terms agreed at that meeting. HD informed the Tribunal that the
13th October Agreement was not signed because he learned in the
interim that Mr Chatfield had a 3 month notice clause in his contract of
employment and that he considered that any agreement between Mr Chatfield and
the Respondent should reflect that 3 month period by reference to the payment
of sums equal to 3 month’s salary under Mr Chatfield’s financial
arrangements with the Respondent and also that the purchase of Mr
Chatfield’s business should not take effect until the 1st
January 2011 as that was the end of the expiry of the notice period.
9.
The 13th
October Agreement has a preliminary statement which states that the agreement
confirms, ‘the terms that we have discussed in relation to your
retirement and the acquisition of your portfolio by Helm’. The 13th
October Agreement set out some terms for the purchase of Mr Chatfield’s
clients and also included this provision: ‘As at 30 September 2010 our
previous agreement for remuneration will cease’. The Agreement did not
contain a reference to Mr Chatfield’s employment being terminated on or
by a certain date. On questioning by the Tribunal HD admitted that he had
prepared the draft agreement and did not consider putting in such a clause
although in his opinion the phrase set out above concerning Mr
Chatfield’s remuneration amounted to the same thing.
10. On the 4th November 2010 a further
draft agreement concerning Mr Chatfield’s ‘retirement’ from
the Respondent (‘the 4th November Agreement’) was
prepared by the Respondent for signature by Mr Chatfield. The 4th
November Agreement referred specifically to a meeting of the parties held on
the 25th October 2010 and stated that its purpose was to restate
‘the terms discussed’. This agreement again referred in its first
sentence to Mr Chatfield’s ‘retirement’ from the
Respondent’s business. Evidence was heard at the hearing that the purpose of the 4th
November Agreement was to ‘clarify’ the terms agreed by the
parties, including according to the Respondent, the oral notice given to Mr
Chatfield on the 28th September 2010. The parties confirmed that the
13th October Agreement and the 4th November Agreement
were basically the same except that the 4th November Agreement
reflected that Mr Chatfield was under 3 months’ notice, which he was not
required to work, and that someone at his expense would be undertaking the work
required on his clients’ behalf in this period. The Tribunal particularly
noted that the 4th November Agreement contained a paragraph, as did
the 13th October Agreement, stating that, ‘As at 31 December
2010 all clauses contained in our previous agreements for remuneration will
cease’.
11. The Tribunal were also shown an email from Mr
Chatfield to HD also dated the 4th November 2010 where Mr Chatfield
asked HD to provide a letter confirming that his employment had been terminated
by notice for Mr Chatfield to produce to the Social Security department in
order that his social security contributions would be paid after he stopped
being employed by the Respondent and thus preserve his pension rights. The
Tribunal understands that HD did not do this.
12. The terms of the 4th November
Agreement made it clear that Mr Chatfield was not expected to work for the
Respondent any more. However the value of his client billing to the end of the
year was bound up in the terms of his remuneration and sale package in the 4th
November Agreement and it was suggested by HD that Mr Chatfield come in at the
end of the calendar year in order to attend to this matter as he knew best the
billing arrangements with his clients. Evidence was heard, and agreed by the
parties, that Mr Chatfield came in on the working days between Christmas and
New Year 2010 and in the first week of 2011. It was noted that Mr Chatfield was
still ‘locked out’ of the Respondent’s systems during this
time and that he did not ask the Respondent for remuneration for this work even
though the 4th November Agreement made it clear that he would not
receive remuneration after the 31st December 2010.
13. On the 13th December 2011 Mr Chatfield filed a
Form JET1 complaining inter alia that he had not been properly dismissed by the
Respondent because he had not been given 3 months’ notice in writing as
required by his contract of employment. At the hearing Mr Chatfield embellished
this claim by adding that the Respondent had entered into a new contract of
employment with him when he undertook the billing work on his clients’
files at the end of 2010/beginning of 2011, and that Article 60E of the
Employment (Jersey) Law 2003 (‘the Law’) which governed new
contracts of employment applied to his case and that he should be paid a
further period of notice pay in respect of that second contract of employment
too.
THE LAW
14. Article 62(1) of the Law sets out the
circumstances in which an employee is dismissed. For the purposes of this case
only Article 62(1)(a) is relevant, and it states that an employee is dismissed
if his employer terminates the contract under which the employee is employed,
whether with or without notice.
15. As stated in paragraph 2 above, Mr
Chatfield’s contract of employment required his employment to be
terminated by 3 months’ notice in writing. Mr Chatfield maintained that
he was not given notice in writing by his employer at any point.
16. Common law requires all notice of termination
of a contract of employment to reflect an unambiguous intention to terminate
the contract whether that notice is given orally or in writing. Where the words
used are ambiguous the Tribunal’s task is to assess how they would have
been understood by a reasonable listener in the circumstances (Sothern v Franks
Charlesly & Co [1981] IRLR 278).
17. Article 60E of the Law concerns the renewal of
a contract of employment or the re-engagement of an employee who is eligible
for a redundancy payment and has no relevance to Mr Chatfield’s cas.
THE
TRIBUNAL’S DECISION
18. The Tribunal is satisfied that Mr Chatfield
should have received 3 months’ notice in writing of the termination of
his contract of employment from the Respondent. In an ideal world this notice
would have been clearly stated in a letter to him stating the date such notice
was given, the duration of such notice and its expiry. This did not happen in
this case; HD believed that the conversation that he had with Mr Chatfield in
the evening of the 28th September 2010 and the subsequent references
to Mr Chatfield’s remuneration ceasing in the 13th October
Agreement and the 4th November Agreement were sufficient. However it
clearly was not as Mr Chatfield was obviously, and not unreasonably, confused
about the exact nature of his employment status with the Respondent. HD gave
evidence that he found it difficult to tell Mr Chatfield that he was being
dismissed because of his previous status as the principal of a trust company
and as a consequence it appears to the Tribunal that he danced around the issue
by saying that, ’he had to go’ and ‘they would buy him
out’ – he most certainly did not make it clear to Mr Chatfield that
he was being sacked and was required to serve 3 months’ notice, on garden
leave. The Tribunal appreciates that these conversations can be difficult but
they must take place in order to achieve clarity for both parties of their
position and their obligations to each other.
19. However, having said that HD did not assist the
situation, it is also clear that Mr Chatfield must take some responsibility
too. Mr Chatfield is an intelligent man who was working in a professional
environment. He was aware of the circumstances for his departure from the
Respondent’s employment and also of the need to sell his clients to the
Respondent in order to secure a retirement fund for himself. The terms of the
sale are quite complicated and Mr Chatfield seems to have negotiated himself
around those without any particular difficulty (even if he did not like the end
result) but for some reason he appears to be disingenuous about the fact that
he was given notice.
20. The Tribunal have looked at the facts closely
and it is clear that on the 27th and 28th September 2010
Mr Chatfield was completely at a loss about what exactly HD’s words meant
and the effect on his employment status, although he understood that the Respondent
was willing to buy his portfolio of clients. It was not unreasonable in those
circumstances for Mr Chatfield to have considered himself still under
suspension. This confusion is still evident in Mr Chatfield’s email to HD
of the 6th October 2010. However HD replies that they would meet on
‘the Monday’, which it turns out was Monday 11th
October, the date referenced in the 13th October Agreement. The 13th
October Agreement introduced for the first time the concept of Mr
Chatfield’s remuneration ceasing and no evidence was heard that Mr
Chatfield disagreed with that principle as one of the terms on which he would
be bought out by the Respondent. By the time of the 4th November
Agreement, that principle still existed but had been developed into a 3 month
period before ‘all remuneration will cease’. The 4th
November Agreement also refers to a previous meeting, in that case on the 25th
October, at which the terms set out in the 4th November Agreement
were agreed by the parties. This was not denied by Mr Chatfield. It is
reasonable to suppose that the reason for the remuneration continuing to be
paid to the end of the year was discussed at the meeting of the 25th
October. The Tribunal also notes that on the 4th November 2010 Mr
Chatfield wrote to HD to ask him to confirm his notice period for social
security purposes, so Mr Chatfield was certainly aware that he was under notice
by the 4th November 2010.
21. The Tribunal has asked itself when could it
reasonably be said that Mr Chatfield became aware that he was not in fact
suspended but actually under notice of termination of his contract. As stated
above, HD had not made the situation clear to him at their meeting on the 28th
September and it is not explicitly set out in either of the two agreements, but
there must have been a point in time when the truth of his situation dawned on
Mr Chatfield. Looking at these facts objectively, the Tribunal is satisfied
that Mr Chatfield must reasonably have known that the Respondent intended to
terminate his employment from at the earliest the 13th October 2010
as that was the date that a reference to his remuneration ‘ceasing’
was recorded in writing for the first time. Whilst that reference is far from
perfect as a means of communicating an intention to terminate a contract of
employment, in the context of this relationship the significance of
these words would have been understood by these parties because they were
present at the meeting held on the 11th October 2010 to negotiate
the terms of the 13th October Agreement and it is reasonable to
assume that the meaning behind that phrase would have been discussed by the
parties.
22. Accordingly the Tribunal finds that notice of
termination of Mr Chatfield’s employment was given by the Respondent on
the 13th October 2010. In accordance with Mr Chatfield’s
contract of employment, he should have been given 3 months’ notice which
meant that his employment terminated on the 12th January 2011. Mr
Chatfield was paid by the Respondent until the 31st December 2010.
Mr Chatfield is therefore entitled to receive a further 12 days’ pay by
way of outstanding notice pay due to him under his contact of employment.
23. Mr Chatfield earned £1538.46 per week, which
is £307.692 per day, multiplied by 12 days this gives a sum of
£3,692.30.
24. In accordance with Article 86(1) of the Law the
Tribunal HEREBY AWARDS the sum of £3,692.30 to Mr Chatfield
by way of outstanding notice pay due to him under his contract of employment.
25. Mr Chatfield submitted that he entered into
another contract of employment with the Respondent after the 31st
December 2010 when he went into the office to undertake some billing work for
clients for a few days in January 2011 and that he was due notice under that
contract of employment too. The Tribunal can find no evidence from the facts
that either of the parties intended to enter into a contract of employment with
the other at this time or at any time after the 31st December 2010.
It is apparent to the Tribunal that it was beneficial to Mr Chatfield that he
should undertake his own billing work for his clients and that he willingly
undertook these duties on a voluntary basis. Accordingly the Tribunal dismisses
this claim.
SCHEDULE OF AWARDS
Outstanding notice pay: 12
days
(Article 86(1))
- £3,692.30
TRIBUNAL NOTE: The Tribunal would suggest to Mr Chatfield that he provide a copy of
this decision to the Social Security Department in order to assist with his
claim for contributions to be made on his behalf during his unemployment as it
records the fact that his employment was terminated by the Respondent and the
date of cessation of his employment.