Morran v Glasgow Council of Tenants Association [1998] IRLR 67
Janciuk v Winerite Ltd [1998] IRLR 63
In two recent cases the court had to consider what should be done to put right a breach of contract by an employer.
In Morran v Glasgow Council of Tenants Associations (1998) IRLR 67 Richard Morran was sacked without notice when he was three weeks short of two years needed to qualify for unfair dismissal rights. He had a contract of employment giving him four weeks' notice of dismissal. The contract also said that his employers could pay him wages in lieu of notice.
When the case reached appeal, it was agreed that he should not have been dismissed without notice and that he should therefore be paid four weeks wages. But it was also argued for Mr Morran that the employer's breach of contract had deprived him of his unfair dismissal rights and that he should be compensated for too. If they had given him the notice provided in the contract he would have stayed employed until he had two years services and could challenge the fairness of the decision.
This argument had been considered by judges in earlier cases, but there had never been a decision on the point.
Nor was there in this case. The judges relied on Laverack v Woods [1967] 1QB 278 CA for the proposition that where a contract was broken, damages had to be 'what the plaintiff would have gained in money or money's worth if the defendant had fulfilled his legal obligations and had done no more'. In Richard Morran's case the employer had a contractual right to pay wages instead of giving notice. His employers could have dismissed him lawfully before he had unfair dismissal entitlement, and so he could not claim that he had been deprived of that by their dismissal.
Although this fine detail meant Mr Morran was unsuccessful, the judges carefully said that this was not a ruling on cases where the employers had not specified in the contract that wages could be paid in lieu of notice. So in a similar case it would be worth taking a careful look at what the contract says.
The Laverack case was relied on by the Employment Appeal Tribunal in another case where a claim was made for damages for breach of contract. In Janciuk v Winerite Ltd (1998) IRLR 63, Mr Janciuk had a contract which set out a disciplinary procedure which had to be followed. He was summarily dismissed without this, though given two weeks wages.
Mr Janciuk's lawyers argued that if they had followed the disciplinary procedure he might not have been dismissed and he was entitled to compensation for loss of that chance.
The argument was rejected. In contract all the employee could get was his entitlement had his employers gone about it lawfully. They would have followed procedure and then dismissed him a week later. The court would not speculate about what the outcome of that might have been - though they did say that this might be different if there was evidence they had acted in bad faith.
This case was about contract. If it had been about unfair dismissal the Polkey principles would have been followed, and there would have been an assessment of what difference it would have made. The lesson of these cases seems to be to read the contract carefully and see what the least an employer had to do to comply with the letter of the law. Beyond that the tribunal will not go.