Mr S Chatfield v Helm Trust Company Limited

Summary – Payment of notice pay

 

198/2011

Jersey Employment Tribunal

9 October 2012

 

 

 

Before     :

Chairman Mrs Nicola Santos-Costa

Panel Members Mr Timothy Allen and Mr Michael Baudains

 

Between

Mr S Chatfield

Applicant

And

Helm Trust Company Limited

Respondent

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.


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