Raspin v United News Shops Limited  IRLR 9 (EAT)
In a welcome decision, the Employment Appeal Tribunal goes against previous trends and finds that there are circumstances in which an employee can claim damages for breach of contract in respect of a lost opportunity to claim unfair dismissal.
Previous authorities, and in particular Janciuk v Winerite Limited, suggested that this was not possible. Although the previous cases are treated as involving different arguments, there is every possibility of the impact of the decision being far reaching.
Mrs Raspin started working for United News Shops on 16th May 1994. In 1996, United News Shops found that money had been going astray and eventually decided to dismiss Mrs Raspin. Mrs Raspin attended a disciplinary meeting on 15th April 1996, following which she was suspended. She was summarily dismissed with effect from 27th April 1996. Her appeal against dismissal was rejected.
The Employment Tribunal concluded that there was no evidence of wrongdoing on Mrs Raspin's part and upheld her claim for a breach of contract. The Tribunal also found that United News Shops had committed a further breach of contract in failing to follow the disciplinary procedure which was incorporated into Mrs Raspin's contract of employment. It made a finding of fact that it would have taken an additional three weeks to follow a proper disciplinary procedure. The Tribunal agreed with Mrs Raspin that, if a proper procedure had been followed (ie there had been no breach of a contract of employment), she would not therefore have been dismissed before 16th May 1996.
Accordingly, she would have had the requisite period of service to claim unfair dismissal and the breach of the contractual disciplinary procedure had deprived her of the opportunity of claiming unfair dismissal. She claimed damages in respect of that loss of opportunity.
The Employment Tribunal considered itself bound by earlier authority to dismiss Mrs Raspin's claim. In Focsa Services (UK) Limited v Birkett the EAT had disregarded what might have happened had the contractual disciplinary procedure been followed and simply awarded damages in respect of the time it would have taken to comply with the disciplinary procedure.
The Employment Appeal Tribunal upheld Mrs Raspin's appeal. The Employment Appeal Tribunal said that the Focsa case was different. In that case, no question of the approach of limits of the qualifying period had arisen. The issue relevant to Mrs Raspin had therefore not been decided.
As the Employment Appeal Tribunal saw Mrs Raspin's case, there were three possible outcomes if United News Shops had complied with the contractual disciplinary procedure:
(i) Mrs Raspin might have been dismissed in circumstances in which the dismissal was unfair;
(ii) she might have been fairly dismissed; or
(iii) there might have been no dismissal at all.
The EAT pointed out that in the first situation, there was a potential loss arising out of the employer's breach of contract. It is in respect of that potential for claiming unfair dismissal at a later date, that damages may be awarded.
The decision is plainly right. The correct measure of damages in any breach of contract claim is an amount which would put the employee in the same position she or he would have been in if the contract had been properly performed. If Mrs Raspin's contract of employment had been properly performed, she would not have been dismissed before 16th May 1996 and there was, therefore, at least a chance that she would be unfairly dismissed thereafter. Courts and Tribunals, as the EAT noted, are perfectly capable of grappling with lost chances and loss of opportunity. The two relevant factors are: first, what the loss would have been if the eventuality (ie. unfair dismissal) had occurred; and, what the chances of that eventuality happening were.
However, it is difficult to reconcile the decision in Mrs Raspin's case with that in Janciuk. Mr Janciuk tried to claim damages for the loss of a chance that had the disciplinary procedure been followed, he might not have been dismissed. The EAT decided that Mr Janciuk should only be compensated on the basis that his employer would have chosen to perform the contract in the least burdensome way - ie. that the contract would have been lawfully terminated at the earliest available opportunity.
Crucially, in Mrs Raspin's case, the Tribunal made a finding of fact that, if the disciplinary procedure had been followed, she would not have been dismissed until she had acquired the necessary two years' continuous employment. However, it may be possible to extend the ambit of this case to situations where the time taken to comply with, for example, a contractual disciplinary procedure did not take the employee's qualifying service over the threshold for qualifying service for claiming unfair dismissal.
In such a situation, even though the employee would not necessarily have acquired the relevant qualifying service, there remains a chance that she or he would have done, and that they may have been unfairly dismissed. There is still a loss of opportunity, as there was in Mrs Raspin's case, for which damages might be recovered. In practice, however, we would recommend that tribunals are asked to make findings of fact, in breach of contract cases, as to what would have been the earliest date on which the employee could have been dismissed if the employer had complied with the contractual disciplinary procedure.