Cerebus Software v Rowley (+ other matters)

CONTENTS
1. Court of Appeal decision - Cerebus Software v Rowley
2. Extensions to Working Time Directive
3. Jobs - Solicitor seeking new position

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1. Court of Appeal Decision - Cerebus Software v Rowley

"This is an interesting appeal on a troublesome little point of employment law."

So starts Ward LJ's judgment in this controversial case, handed down on 18th January 2001.

Facts: Mr Rowley was entitled to six-months' notice of termination of employment. His contract provided that the employers could pay a lump sum in lieu of notice. He was dismissed summarily on various charges, which the employment tribunal found to be fabricated. The employment tribunal awarded him the full six months' pay, despite him having earned monies during that period in a new job, on the basis that the six months' pay was a contractual payment and not damages for breach of contract. Thus it was a straightforward claim for a debt, not an action for damages, and no duty to mitigate (or to give credit for other earnings) arose. The EAT upheld the employment tribunal's reasoning.

Issue: Where an employer dismisses and employee of grounds of misconduct, later held to be unfounded, is the employee's claim one for damages for wrongful dismissal (subject to the employee's duty to mitigate his loss) or is the employee entitled to assert a contractual right to payment in lieu of notice without credit having to be given for earnings received in new employment obtained within the period of notice? (this is the wording set out in para. 1 of Ward LJ's judgment)

Held (Ward & Parker LJJ, in the majority): The wording of the contract, namely "it is agreed that the employer may make a payment in lieu of notice to the employee" meant that the employer had a right to elect whether to pay the lump sum or not. It did not give rise to the employee being able to insist on 6-months' salary in lieu of notice. The employee's action was for damages for breach of contract and, with it being a straightforward wrongful dismissal claim, he was obliged to give credit for the earnings received during the 6-month notice period.

Held (Sedley LJ, in the minority): In a powerful and scathing judgment, Sedley LJ attacks the contractual orthodoxy as being unfair and immoral. He considers that a company which is guilty of wrongful dismissal should not be permitted to avoid its contractual and moral obligation to pay 6 months' salary by taking advantage of the employee getting another job. Yet his reasoning depends on a somewhat complicated theoretical analysis, without reliance on any authorities in support, and whilst he comes to an undoubtedly 'just' result, it is difficult to reconcile his reasoning with a more traditional approach to contractual interpretation.

The full decision can be found at the court service website on http://www.courtservice.gov.uk/judgments/judg_home.htm



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2. Extensions to Working Time Directive

Readers will be aware that the Working Time Directive (and the UK Working Time Regulations 1998) exclude certain sectors such as road, rail, air and sea workers from the legislation.

These sectors are now, under new EC Directives, to be covered.

The main Directive is the Horizontal Amending Directive (in fact, there are 5 Directives in total!). The majority of these new rights must be implemented by 1st August 2003.

Of particular political importance is the introduction of a maximum working week for junior doctors.

(a) Road Workers
The Horizontal Amending Directive allows non-mobile road workers to benefit from the Working Time Regulations ('WTR') in full. Mobile workers (ie drivers) become entitled to paid annual leave, a 48-hour working week and health checks for night workers, but NOT to minimum breaks and rest periods. These are to be the subject of the separate Road Transport Directive (the one which has not yet been adopted).

(b) Rail Workers
The Horizontal Amending Directive extends the WTR to mobile and non-mobile rail workers in full, with derogations from the entitlements to daily rest, rest breaks, weekly rest and the night work provisions for specific workers.

(c) Air Workers
The Horizontal Amending Directive provides that non-mobile workers receive benefit of WTR in full. Mobile workers (pilots, stewards etc.) receive paid annual leave, 48-hour week, health checks for night workers and adequate rests.

(d) Sea Workers
The Horizontal Amending Directive extends the WTR in full to non-mobile sea workers. For mobile workers (fishermen), the Directive provides for maximum daily and weekly hours, with the weekly hours not exceeding 48-hours per week over a 12 month average and limited to 72 hours in any 7-day period. There are also minimum rest hours, entitlement to paid holiday, and health checks for night workers. Member states can exceed these limits only after consultation with industry representatives.

(e) Junior Doctors
All of the WTR provisions shall apply, to be implemented by 1st August 2004, with the exception of the 48-hour week which is to be phased over a possible total 12 years. An initial 4-year implementation period will be followed by a transitional period of 5 years (with weekly working limits of 58 hours for 3 years, and 56 hours for the next 2 years). States with particular operationsal difficulties can seek an additional 3-year period, taking the final implementation date to 1st August 2012.
For further details, visit www.dti.gov.uk/er/work_time_regs/exsectors.htm

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3. Jobs - Solicitor seeking new position

A solicitor who instructs me regularly is looking for a new position. I have worked with her for over 4 years, and have no hesitation in recommending her as an experienced, dedicated, highly able and very personable practitioner.

Her summary CV follows:

Second career Employment lawyer looking for move to larger more commercially-oriented firm. First career as a TV researcher. Five years qualified, salaried partner. 50% of my work is Employment, both contentious and non-contentious, employer and employee. Caseload includes DDA claim in ECHR (early stages). The other 50% is commercial litigation and Personal Injury work.

Member of ELA and contributor to SW working party on CRE's proposed changes to Race Relations Act. Fully IT literate (including responsibility for current firm's website). Particularly interested in PSL/TKL position as I like the prospect of varied project-based work with input into management. Based in the SW - Bristol, Birmingham, Cheltenham, Gloucester and Oxford all commutable.

If you are interested, please contact her directly on anne@bewicke.freeserve.co.uk