Appeal No. EAT/1237/99

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 29 November 2000

Before
HIS HONOUR JUDGE J ALTMAN
MR D J HODGKINS CB
MRS M T PROSSER

MR B DIXON	APPELLANT

LONDON BOROUGH OF HACKNEY	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR S THOMAS
(Solicitor)
NAHT (Legal Dept)
1 Heath Square
Boltro Road
Haywards Heath
West Sussex RH16 1BL	
For the Respondents	MR J TAYLER
(of Counsel)
London Borough of Hackney
Legal Services Department
183-187 Stoke Newington High St
London N16 OLH	

JUDGE J ALTMAN 

1	This is an appeal from the decision of the Employment Tribunal sitting at London North on 23 August 1999, which found that there was no breach of the Appellant’s contract of employment, and no unlawful deduction from his wages.  

2	The matter has already been considered at a preliminary hearing before the Employment Appeal Tribunal when directions were given for the appeal to proceed to full argument on the following question:
“whether in the light of the findings of fact set out in paragraph 11 of the extended reasons the Employment Tribunal erred in law in going on to find that it did not have to consider the provisions of paragraphs 23 to 27 of the Schedule of the Education Act 1996”.

3	The Appellant began work for the Respondents as a head teacher at Grazebrook Primary School on a fixed term contract which expired on 31 August 1998.  It is contended that he was an acting head teacher.  It is quite clear from the findings of the Tribunal, and from what we have heard, that the normal procedures for appointment of a head teacher, in which in due course indeed this Appellant participated, had not been carried out for the permanent post.  We can see no reason why there was any reason to describe the post that he occupied until 31 August 1998, as anything other than “acting head teacher”.  

4	We have had to consider the application of Schedule 14 of the Education Act 1996 to the position of the relationship of employer and employee between these parties and it is quite clear that an acting head teacher is a category of post which is contemplated by that Schedule, at least in some respects.  So we accept the description that the appointment was simply as acting head teacher on a fixed term contract expiring on 31 August 1998.  

5	Whilst performing that contract, the Appellant applied for the permanent headship of the school.  At the beginning of 1998 he applied, he was interviewed on 13 March and whilst his existing contract was still current, at about that time, he was informed that subject to satisfactory references, the governing body would be recommending his appointment as head teacher of the school.  

6	It is accepted, and clearly provided, in the regulations that subject to specified circumstances which do not apply in this case, the local authority would, in due course, be bound to ratify that recommendation of appointment.  So in effect, the recommendation of the Governors in this particular case is tantamount to an offer of employment, subject to satisfactory references.  

7	It appears that before the ending of the period of his fixed term contract, one unfavourable reference was received by the Respondents, but not acted upon.  By 1 September 1998, another reference had not yet been received and the Governors had not yet decided whether satisfactory references had been furnished for the new post.  The Appellant continued in employment.  There is no finding within the decision of the Tribunal of any discussions that took place at that time, or arrangements which may have taken place, as to the basis upon which that employment was  to continue.  

8	Although at one time it was contended by the Appellant that that employment never terminated, because of a failure to apply the provisions of Schedule 14 to which I have referred, we understand that both before the Tribunal, and certainly here, that point was never seriously argued.  The references were, on 7 October, deemed to be unsatisfactory and the Appellant was notified. The Employment Tribunal made a finding that the employment came to an end on 7 October 1998.  

9	We have been set by the preliminary hearing directions a narrow question, arising out of  paragraphs 11 and 12 of the decision which are as follows:
“11   We find as a fact on the evidence that Mr Dixon’s employment continued on a temporary basis up to 7 October 1998.  We find that the respondent was entitled to consider the reference to be unsatisfactory particularly bearing in mind that they had in their charge children whose welfare and education were of primary importance.  The Respondent was entitled not to confirm the appointment as permanent head teacher.  
12   Having come to this conclusion and having found that Mr Dixon was never employed on a permanent contract of employment basis we do not find that we have to consider whether or not, pursuant to Schedule 14 of the Education Act 1996, the provisions regarding his dismissal pursuant to paragraphs 23 to 27 have any relevance.”

10	Mr Thomas has drawn our attention to the provision of those regulations.  Regulation 23 provides the starting point for the application of all those regulations as follows in sub paragraph (1):
“23.(1) Where the governing body determine
(a) that any person employed to work at the school should cease to work there ….
they shall notify the local education authority in writing of their determination and the reasons for it.”

11	There then follows the procedure of steps to be taken, before the local authority is entitled to require someone to cease to work.  The first step requires notification by the local authority, to the person concerned within 14 days.  Possibly this even includes notification of summary dismissal.  This is coupled with a right of appeal from the decision of the governing body, to take place before they notify the local education authority.  Paragraph 23 (3) of the Schedule provides:
“(3)  If in a case within sub-paragraph (1)(a) the person concerned is not employed to work solely at the school, the authority shall require him to cease to work at the school.”

12	In the body of that Schedule, such as in paragraph 4, which is dealing with the procedures for the appointment of a permanent head teacher, there is contemplation of the existence of a post of acting head teacher which does not require the same detailed procedures to perfect appointment.  But that distinction finds no place whatsoever in paragraph 23, and we look in vain, it seems to us, for any basis upon which Regulation 23 can be confined to permanent appointments.  It refers to any person employed to work at the school, and bearing in mind that that very Schedule contains the acknowledgement of a distinction between acting head and permanent head, and then goes on to refer to any person, it must follow, it seems to us, that that definition does, and is intended to, embrace both categories of person.  Otherwise, surely, the distinction would have been carried forward into the paragraph.  

13	Before going on to other matters that have been raised, we revert to the question which has been so clearly defined for us to determine.  It is clear from the paragraphs to which we are confined, that the basis of the Employment Tribunal’s decision was that they did not have to consider, one way or the other, the application of Schedule 14.  This itself was confined by the Tribunal themselves to their earlier finding, that the employment continued on a temporary basis.  

14	We are driven to the conclusion upon our finding that the Employment Tribunal were in error in drawing that conclusion from that finding of fact.  A number of subsidiary questions have been urged upon us.  First it has been suggested to us that paragraph 23 only applies to a dismissal, and that it does not apply to a contract which has come to an end, being a fixed term contract which has come to an end upon the expiry of the term, or being a contract for performance of a particular matter which has expired because it has been performed.  

15	We will only at this stage point out, not least because it is a matter that we did not invite complete argument upon, that the words used in the paragraph are perhaps not altogether clear.  They refer to the phrase that describes a person as “ceasing to work”.  It may be thought that the reason for that wording is only because it is a local authority that dismisses and not the Governors, and that those words contemplate only a dismissal situation.  However, when the local authority’s response is defined in paragraph 23(3), the wording does not require the authority to “dismiss” that person, but only to cease to work at the school.

16	Just in case it may be thought that that is simply a form of words, it is interesting to note that there is a slight parallel.  Paragraph 23(1)(b) provides for the situation where the governing body determine that the Clerk to the governing body should be dismissed, and paragraph 23(4) provides that, following the various procedures, the authority shall “dismiss”.  There is there a difference of wording which must, it seems to us, leave open for argument the question as to whether paragraph 23 is confined in (1)(a) to “dismissals”.  In this case, it is the local authority’s contention that this contract was not terminated by dismissal, but by some event, provided for within the contract itself; expiry or a fixed term, or performance.

17	There are, essentially, three contractual situations to consider.  The first is the undisputed existence of a fixed term contract, up until 31 August.  That was a contract which, subject to the possibility of renewal, would have come to an end.  Secondly, was the possibility of a contract of permanent headship, which never came into existence, because the condition precedent of satisfactory references was never fulfilled.  

18	The question arises as to the status of the Appellant, and his relationship with the Respondents between 31 August and 7 October.  Was it a further fixed term contract, or a further contract?  Or was it the extension of the original fixed term contract, on any view, and perhaps more importantly, what were its terms?  There is no evidence before us of any express terms covering that period whatsoever.  

19	We are invited to conclude that there were implied terms in that contract, that the contract would automatically come to an end, in the event of unsatisfactory references being received.  And it is suggested to us that it is implied, because it is necessary to give some efficacy to that contract, it being for an acting post, which defined the circumstances in which the person would cease to act.  We can see some force in that argument.  The terms of such an implication are, for us at this stage, less easy to determine.  

20	We have heard no evidence, in this Tribunal, and there is no record in the decision before us, of discussions that may have transpired at the end of August, or during the course of the period that followed, between the parties.  There is no evidence of what generally happens in the world of education in this sort of situation.  We have come to the conclusion, therefore, that we can go no further in formal terms in this decision.  Having determined the error of law that we have defined, we have therefore decided to remit this case to the Employment Tribunal to continue its deliberations.  We wish to say, therefore, the least possible so as to avoid inhibition, either of the issues that are to be dealt with, or those that are to be excluded.  

21	In the Originating Application, in paragraph 6 of the details of the complaint the references to Schedule 14 were related solely to the issue as to whether or not there had been a dismissal.  It is conceded that the argument that employment was continuing was not seriously contested before the Tribunal.  We are indebted for the frankness of Mr Tayler and the attempts of Mr Thomas to tell us what they first recall, and secondly, know of what took place before the Tribunal.  But we are uncertain as to the way in which this matter was argued before the Employment Tribunal in relation to Schedule 14’s application to this case, and therefore it seems to us that it would be right to leave that matter, itself, open for argument before the Employment Tribunal, which will have its own notes of the matter.  

22	We are indebted to the arguments that have been presented to us, along the lines that this may not have been a dismissal, because it was a fixed term contract, and the question of whether it was discharged by performance, and the reference to the two cases of Brown v Knowsley Borough Council [1986] IRLR 102  and Wiltshire County Council v National Association of Teachers in Further and Higher Education [1980] ICR 455 which refer to two contracts, in which there was no dismissal and there was no specified date at the outset when the contracts would come to an end.  There were circumstances which were factually different from this, and this has been pointed out by Mr Thomas.  They were considering express terms.  Although we would have wished to assist the parties by bringing what on any view, even if successful, is a very modest financial claim to a conclusion today, we cannot do it on the material before us.  

23	We cannot, it seems to us, do credit to those arguments without the sub stratum of a factual basis which is necessary to determine what would have happened. We illustrate our conclusions with simply one question: if there was an implied term, what was it?  What would have happened in the case of all unsatisfactory references?  Is there an implied term, that the acting head teacher’s employment will immediately come to an end, so that there is a lacuna of time before the appointment of the permanent head?  Or may there be implied terms which provide for a continuation until the appointment of whoever is to be the new head teacher?  

24	The definition of those terms is, as we say, a matter that we cannot embark upon, it seems to us, on the information before us.  So we remit this matter to the Employment Tribunal to continue the hearing on the basis that the temporary nature of the employment concerned did not, of itself, take it outside the provisions of paragraph 23.  We remit this therefore to the same Employment Tribunal, constituted so far as possible, with the same membership.