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McCabe v Cornwall County Council and Another, Court of Appeal

2 January 2003
The issues

Stress – Gogay -v- Hertfordshire County Council – Johnson -v- Unisys – overlap between tort and statutory employment rights.

The facts

The Claimant was appealing from the decision of the Judge who adjudged his application to amend the Statement of Claim by substituting a new claim. The Claimant also appealed against the Judge’s decision to strike out the claim by disclosing no cause of action.

The Claimant was a teacher. Allegations of inappropriate conduct were made by female pupils in 1993. The Claimant did not learn of the allegations until September 1993. He alleged that during the 4 months between May and September he had begun to develop psychiatric illness. Over the subsequent 4 years, there were 3 disciplinary hearings, at the first of which he was given a final written warning. At the second, a Panel of Members of the Governing Body concluded that he should be dismissed, even though his conduct had been “relatively trivial”. He began proceedings for unfair dismissal and was awarded the maximum amount of £11,000.00 by an employment tribunal in 1996 which a Judge dismissed the dismissal unfair. In March 1997 he commenced proceedings in the High Court for damages for psychiatric illness suing in contract in respect of the County Council’s conduct of the disciplinary procedure leading up to his dismissal and in tort for the losses caused by the procedure and the dismissal itself. In February 2002 he applied to amend his claim by substituting claims in contract in tort, the first being for an alleged breach of the relationship of trust and confidence and the second being for breach of duty to provide a safe system of work.

The decision

1. The appeal raised two issues – first the extent to which an employee who had been fairly dismissed was confined in respect of injury caused by unlawful conduct of his employer prior to and leading to dismissal to the statutory remedy of a compensatory reward from an employment tribunal and second whether the Judge should have refused permission to amend and struck the claim out disclosing no cause of action.

2. The starting point was Mahmud -v- BCCI – a decision of the House of Lords which established that there is a mutual obligation implied in every contract of employment, not, without reasonable and proper cause to conduct one self in the manner likely to destroy or seriously damage the relationship of trust and confidence between an employer and employee.

In Gogay -v- Hertfordshire County Council the Court of Appeal applied Mahmud and upheld an employee’s common law claim against her employer for damages caused by an unjustifiable suspension, which was not followed by dismissal. The claim was in contract for breach of an implied term of mutual trust and confidence. For damages for clinical depression caused by the suspension coupled with a failure properly to investigate the circumstances giving rise to it.

3. In Gogay the Court of Appeal distinguished the case from Johnson -v- Unisys Limited, a decision later affirmed by The House of Lords, which was authority for the principle that no common law claim lay for damages allegedly caused by the manner of a dismissal. Gogay was distinguishable because it related to a suspension, which clearly had in mind the continuation of the employment relationship. Unfortunately, the House of Lords did not deal with Gogay.

4. In Johnson the Claimant was dismissed. The House of Lords confirmed that there was no remedy of common law for any wrong which was otherwise compensatable under the Employment Legislation, that is there could be no overlap of jurisdiction.

The law in this matter was clearly still in a state of development not least because of the failure of The House of Lords to express whether they approve or disapprove of the Court of Appeal’s decision in Gogay. Efforts were needed to draw the line between dismissal caught by the Employment Legislation for which recovery in common law is excluded and conduct prior to it which caused an injury which was compensatable at common law.

It was a question of fact for the trial Judge to determine on the facts of each case whether the manner of dismissal or circumstances attending it were confined to events at the same time or immediately before the actual dismissal.

The question was not just one of the length of the disciplinary process which eventually gave rise to dismissal. There might be other relevant factors including the consistency of conduct and intention of the employer at different stages of the process and the nature and pattern of any warnings and whether there was a natural break in the process before dismissal became a practical proposition together with the attribution of the injury to the time and nature of the particular conduct to which complaint was made.

There were sound policy and conceptual reasons for looking for a certain and tidy outcome, ie to avoid overlap between compensation for unfair dismissal and common law damages for breach of duty associated with and prior to it. There were difficulties of attribution in causation as had been indicated by Lord Hoffman in Johnson. There were difficulties for the Claimant in having to separate his claims, that is to bring a statutory claim first within the three month time limit permitted and the common law claim second for additional loss not flowing from his dismissal but from his employers unlawful conduct prior and leading to it.

In principle the existence of the common law entitlement should not depend on whether the Claimant had in fact made a claim to a tribunal for compensation for unfair dismissal or how he framed the claim or how the tribunal dealt with it.

It might be the case that if a Claimant succeeded in obtaining a compensatory reward from a tribunal, the extent and makeup of the award might have some bearing on the amount of damages which he would recover in a common law claim, if only to prevent an inadvertent double recovery.

There was a wider point of principle namely that the existence of a common law claim in any given case should not depend on the chance that an employer chose not to terminate the contract by dismissal or that an employee chose not to treat his employer’s improper conduct as amounting to constructive dismissal. If this situation was permitted the dilemma could produce great injustice in cases where there had been a malicious attempt by an employer to force a constructive dismissal.

In any event it was wrong given these uncertainties for the claim to be struck out. It could not be decided at the moment whether the act of suspension was wrongful and causative of the Claimant’s trauma and if it was both those things whether it formed part of the process of dismissal or as a separate event which would have rested where it was but for the Claimant’s decision to appeal against the warning which followed it. These matters needed factual investigation.

Appeal allowed.

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