Thursday, 3 June 2010

Edwards V Chesterfield Royal Hospital NHS - A Benchmark Employment Case?

Mr Edwards, a consultant surgeon for an NHS Trust was dismissed for gross professional and personal misconduct following a disciplinary hearing and was subsequently unable to find employment but how did he bring a separate claim for breach of contract in connection with his dismissal.

The contract under which he was employed provided by clause 8 that either party could terminate it on three months' notice to the other. It also provided by clause 13 that in matters of personal conduct Mr. Edwards would be subject to the hospital's general procedures and that in matters of professional misconduct he would be subject to a procedure agreed by the Local Negotiating Committee in respect of medical practitioners.

In February 2006, following a disciplinary hearing, he was summarily dismissed from his post for gross professional and personal misconduct. He has since been able to obtain work as a locum with another NHS Trust, but has been unable to obtain a permanent consultant post and says that he will not be able to do so in the future because of the finding against him. He says that he has therefore been unable to pursue his medical career in the manner which he would have wished. The Investigating Committee of the General Medical Council later summarily dismissed a complaint against him based on the same allegations.

Mr. Edwards maintained that the Trust failed to follow the contractual disciplinary procedure correctly, in particular, by failing to appoint a person with legal qualifications to chair the panel which considered his case, by failing to appoint as a member of the panel a clinician of the same medical discipline as himself and by refusing to allow him to be legally represented at the hearing. He also maintains that if the procedure had not suffered from those defects no finding of misconduct would have been made against him. Accordingly, on 15th August 2008 he commenced proceedings against the Trust in the Manchester District Registry seeking damages for breach of his contract of employment in the sum of a little under £4.3 million.

For those used to a cap on compensation in tribunal proceedings an eyebrow would be raised at the level of damages he sought for breach of his contract of employment in the sum of under £4.3 million.

At a hearing on 26th March 2009 District Judge Jones accepted the Trust's arguments and granted it a declaration that Mr. Edwards' claim was limited to loss of earnings for the contractual period of three months' notice.

Mr. Edwards' appeal against the District Judge's order was heard by Nicol J. The judge held that if his substantive claim succeeded Mr. Edwards would be entitled to recover loss of earnings in respect of his contractual notice period and also in respect of the period during which he would have remained employed while a disciplinary procedure which complied with the terms of his contract ran its course. He based his conclusion on the decision of this court in Gunton v Richmond-upon-Thames London Borough Council [1980] I.C.R. 755. Accordingly, he allowed the appeal. The order of District Judge Jones was varied accordingly. The present position is summed up in para 7 of the judgment:

'This is a second appeal from an order made under CPR Part 24 to the Court of Appeal. Moreover, it arises on an application by the defendant expressed to be for an order striking out part of the claim (though more properly, since made under Part 24, for summary judgment). Formally, therefore, the issue to be determined is whether Mr. Edwards has any real prospect of recovering after a trial damages in excess of loss of earnings for the contractual period of notice and the period required for contractual disciplinary proceedings. However, since the only issue before the court concerns the measure of damages recoverable in law, Mr. Sutton accepted that the court must proceed on the assumption that Mr. Edwards will succeed in establishing all the allegations made in the particulars of claim. In those circumstances the application has been treated as amounting to the trial of a preliminary issue. The question is whether, if the allegations made on the particulars of claim are established, Mr. Edwards' entitlement to damages is as limited as the Trust contends.'

Johnson v Unisys was distinguished by the Judge with the following words:

The fact is that Johnson v Unisys and Eastwood v Magnox were not concerned with the measure of damages for breach of an express term of the contract but with whether an employee has a cause of action at common law for unfair treatment in connection with his dismissal. (37) The fact is that Johnson v Unisys and Eastwood v Magnox were not concerned with the measure of damages for breach of an express term of the contract but with whether an employee has a cause of action at common law for unfair treatment in connection with his dismissal.

In paragraph 40 of his judgment the judge accepted that 'in the present state of the law,' as represented by Addis v Gramophone Co. Ltd and Johnson v Unisys, damages caused to an employee's reputation by the manner of his dismissal is not usually recoverable. He explained that the reason for this is that, 'the conduct of which he complains does not amount to a breach of contract and damages are not recoverable for personal distress or loss of reputation, 'except in a limited number of cases.. However he continued, the proposition that a breach of contract in the form of a failure to comply with an agreed disciplinary procedure gives rise to a claim is difficult to accept in principle and is difficult to reconcile with the decision in Gunton v Richmond - Upon-Thames.

in para 44 the Judge concluded with the following:

'He can also point to the fact that the failure to carry out the proper disciplinary procedure resulted in the very findings of misconduct that have prevented him from obtaining similar employment elsewhere in the NHS. On the facts that must be assumed in his favour, therefore, wrongful dismissal is not his only cause of action and his claim for damages for failure to carry out proper disciplinary proceedings is not excluded by Johnson v Unisys'.

The Court of Appeal has in effect ruled that any complaint about the dismissal itself must be made under the statutory unfair dismissal procedures under the ERA1996 (where compensation is capped), However where there is an allegation about a separate breach of an express contractual term, such as disciplinary procedures, there is no restriction on a person's ability to bring such a claim.

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