Damaged reputation

Edwards v Chesterfield Royal Hospital NHS Foundation Trust

The House of Lords held in Johnson v Unisys Ltd that employees could not claim common law damages for breach of an implied term of trust and confidence connected to a dismissal. However, the Court of Appeal has now said in Edwards v Chesterfield Royal Hospital NHS Foundation Trust that an employee may be entitled to claim for all common law damages arising from a breach of the contractual disciplinary procedure prior to dismissal.

Basic facts

Mr Edwards, a consultant trauma and orthopaedic surgeon, was summarily dismissed on 10 February 2006 following a disciplinary hearing for gross professional and personal misconduct. His contract provided for three months’ notice. Although Mr Edwards managed to find work as a locum after his dismissal, he could not find another comparable permanent post as a consultant within the NHS.

Following a decision of the General Medical Council Investigating Committee to reject the same allegations against him, he claimed that, had the Trust followed its own disciplinary procedure and appointed a legally qualified chair and a panel member with the same medical qualifications, it would not have made the finding of misconduct.

He started legal proceedings for breach of contract on the basis that the disciplinary procedure was a term of his contract. Had it been properly followed, he said he would not have been dismissed. He claimed damages of over £4 million for loss of earnings (excluding future loss of pension) from his dismissal to his due retirement date in 2022.

Decisions of the district and high courts

The district judge, however, accepted the Trust’s argument that his damages claim (were he to succeed) should be limited to loss of earnings for the three month period of his contractual notice period due to the decision in Johnson v Unisys Ltd and that the claim for the remaining damages should be struck out.

The High Court agreed that Johnson excluded Mr Edwards from the additional career damages he sought, but held (in line with Gunton v Richmond-upon-Thames) that he was entitled to recover damages for his contractual notice period and the period during which he would had remained employed while the disciplinary procedure (had it been properly followed) ran its course.

Mr Edwards appealed again, claiming he was not excluded by Johnson from recovering all his damages arising from the breach of contract and that Gunton should be distinguished in line of the 1998 Human Rights Act.

Court of Appeal decision

And the Court of Appeal agreed with his first point, saying that the Trust had misunderstood the decision in Johnson.

It took the approach that, as Mr Edwards would succeed in proving the facts he had set out in his particulars of claim at the full trial, wrongful dismissal was not his only cause of action. His claim for damages for the Trust’s failure to carry out proper disciplinary proceedings was not, therefore, excluded by the judgment in Johnson. That case concerned damages sought for a breach of the implied term of trust and confidence connected with the dismissal, whereas this case concerned damages sought for a breach of an express term relating to a disciplinary procedure. 

The Court of Appeal rejected the second point of appeal by Mr Edwards, and held that Gunton was still good law.

The Court of Appeal gave no decision on the amount of loss he sought, as this would be considered at the full trial. The remit for this hearing was just to decide whether Mr Edwards was entitled to claim for damages greater than the three months provided for in his contract, plus the period of time during which he would have remained employed while the disciplinary procedure (had it been properly followed) ran its course.