Przybylska v Modus Telecom Ltd (IDS 833)
Sometimes courts will imply a term into a contract to give it “business efficacy”. In the case of Przybylska v Modus Telecom Ltd (IDS 833), however, the Employment Appeal Tribunal (EAT) said that there was no need to imply a term when the express term was already sufficiently clear.
Basic facts
Ms Przybylska worked for Modus Telecoms Ltd from 3 October 2005 to 31 January 2006, when she was dismissed.
Her contract stated that she would be on probation for the first three months of her employment, during which time she was entitled to one week’s notice. The clause also stated, however, that the company could extend the three month period “where circumstances may not have allowed an objective assessment of your performance to be made.” Once the probationary period was over, she was entitled to three months’ notice.
The company did not exercise their right to extend the probationary period (which expired on 2 January when Ms Przyblska was on holiday) and the director, Mr Solis, did not arrange a meeting to discuss her performance until 12 January. They then met on 19 January, after which he completed her assessment form, stating that her performance was unsatisfactory.
Mr Solis then terminated her contract on 31 January, giving one week’s notice. Ms Przyblska brought a claim for breach of contract, arguing that she was owed three months’ notice as the company had not exercised its right to extend her probationary period. The company said it was entitled to give her one week’s notice as she was on holiday when the probationary period expired, and, in any event, that she was aware of their concerns long before that.
Tribunal decision
And the tribunal agreed with them. It said that because she was on holiday when the probationary period expired, it was necessary “in these circumstances to imply a term to give business efficacy to the contract”.
It said that “a reasonable bystander” would expect her to have had some indication from the company that her probationary period had been successfully completed “within a reasonable period” of it coming to an end. As she was on holiday when it expired, the whole process started as soon as possible after that, and was completed less than three weeks later. That was not an unreasonable delay.
EAT decision
The EAT, however, disagreed and said that there was no need to imply a term into her contract at all. The company must have known that Ms Przybylska would be on holiday on 2 January, and even if they did not know the precise dates they must have known that she was unlikely to be working over Christmas and New Year.
If Modus was not going to be able to do their assessment before 2 January, the date on which the three month period expired, they had the right to extend it; but they failed to do so. “No further right was, in my judgment, necessary, however desirable it must have seemed to Modus or to the Tribunal. I agree with [the] pithy submission that the express term was sufficient to ensure the business efficacy of the contract. “
In any event, it said that the implied term was inconsistent with the express term in that it gave the company an additional right to extend the probationary period “within a reasonable time” after three months had passed. This was not what the express term provided for.
The probationary period therefore came to an end on 2 January, with the result that when she was dismissed on 31 January, she was entitled to three months’ notice (less a week). The EAT remitted the issue of compensation to which Ms Przybylska was entitled to the same tribunal for assessment.