Knowledge (XXG)

Johnson v Unisys Ltd

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terms of the contract but cannot contradict them. Only Parliament may actually override what the parties have agreed. The second reason is that judges, in developing the law, must have regard to the policies expressed by Parliament in legislation. Employment law requires a balancing of the interests of employers and employees, with proper regard not only to the individual dignity and worth of the employees but also to the general economic interest. Subject to observance of fundamental human rights, the point at which this balance should be struck is a matter for democratic decision. The development of the common law by the judges plays a subsidiary role. Their traditional function is to adapt and modernise the common law. But such developments must be consistent with legislative policy as expressed in statutes. The courts may proceed in harmony with Parliament but there should be no discord.
222:(1997) 152 DLR (4th) 1, 44-48, McLachlin J (in a minority judgment) said that the courts could imply an obligation to exercise the power of dismissal in good faith. That did not mean that the employer could not dismiss without cause. The contract entitled him to do so. But in so doing, he should be honest with the employee and refrain from untruthful, unfair or insensitive conduct. He should recognise that an employee losing his or her job was exceptionally vulnerable and behave accordingly. For breach of this implied obligation, McLachlin J would have awarded the employee, who had been dismissed in brutal circumstances, damages for mental distress and loss of reputation and prestige. 149:
that a common law right embracing the manner in which an employee is dismissed cannot satisfactorily coexist with the statutory right not to be unfairly dismissed. A newly developed common law right of this nature, covering the same ground as the statutory right, would fly in the face of the limits Parliament has already prescribed on matters such as the classes of employees who have the benefit of the statutory right, the amount of compensation payable and the short time limits for making claims. It would also defeat the intention of Parliament that claims of this nature should be decided by specialist tribunals, not the ordinary courts of law.
276:"there is not one hint in the authorities that the...tens of thousands of people that appear before the tribunals can have, as it were, a possible second bite in common law and I ask myself, if this is the situation, why on earth do we have this special statutory framework? What is the point of it if it can be circumvented in this way? .... it would mean that effectively the statutory limit on compensation for unfair dismissal would disappear." 123:, could not find a new job despite over 100 applications and at age 52 was unlikely to have a promising future career. He claimed that he was wrongly dismissed, and that the manner of his dismissal, which was summarily without the chance of a fair hearing and with one month's pay in lieu only, caused his health problems. He sought compensation for unfair dismissal, and in addition for the manner of dismissal given the employer's breach of 39: 231:
AC 488, in which it was decided that an employee cannot recover damages for injured feelings, mental distress or damage to his reputation, arising out of the manner of his dismissal. Speaking for myself, I think that, if this task was one which I felt called upon to perform, I would be able to do so.
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37. The problem lies in extending or adapting any of these implied terms to dismissal. There are two reasons why dismissal presents special problems. The first is that any terms which the courts imply into a contract must be consistent with the express terms. Implied terms may supplement the express
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meant that the stronger party, usually the employer, was free to impose his terms upon the weaker. But over the last 30 years or so, the nature of the contract of employment has been transformed. It has been recognised that a person's employment is usually one of the most important things in his or
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therefore gives a remedy for exactly the conduct of which Mr Johnson complains. But Parliament had restricted that remedy to a maximum of £11,000, whereas Mr Johnson wants to claim a good deal more. The question is whether the courts should develop the common law to give a parallel remedy which is
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50. It follows, my Lords, that if there was no relevant legislation in this area, I would regard the question of whether judges should develop the law by implying a suitable term into the contract of employment as finely balanced. But now I must consider the statutory background against which your
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2. In principle the appellant's argument has much to commend it. I said so, in my obiter observations in Mahmud's case, at pages 39-40. But there is an insuperable obstacle: the intervention of Parliament in the unfair dismissal legislation. Having heard full argument on the point, I am persuaded
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Lord Steyn, dissenting, argued the statutory remedies in salary for wrongful dismissal inadequate, and the statutory term of notice did not prevent developing an implied term of good faith and fair dealing. There was no conflict between the requirement of notice and not to exercise the power in a
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IRLR 516, Morison J (sitting in the Employment Appeal Tribunal) said that it was an implied term of the contract of employment that an employer would reasonably and promptly afford employees an opportunity to obtain redress of grievances. He inferred such a term from what is now section 3 of the
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and the accompanying limits on compensation that could be sought through the system of employment tribunals. While a common law right to full compensation for breach of contract might exist, it could not circumvent the intention of Parliament in laying down limits to compensation for dismissals.
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58. I can see no answer to these questions. For the judiciary to construct a general common law remedy for unfair circumstances attending dismissal would be to go contrary to the evident intention of Parliament that there should be such a remedy but that it should be limited in application and
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flows from a failure to give proper notice or make payment in lieu. Therefore, if wrongful dismissal is the only cause of action, nothing can be recovered for mental distress or damage to reputation. On the other hand, if such damage is loss flowing from a breach of another implied term of the
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42. My Lords, in the face of this express provision that Unisys was entitled to terminate Mr Johnson's employment on four weeks notice without any reason, I think it is very difficult to imply a term that the company should not do so except for some good cause and after giving him a reasonable
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AC 20, 51 Lord Steyn said that the true ratio of Addis's case was the damages were recoverable only for loss caused by a breach of contract, not for loss caused by the manner of its breach. As McLachlin J said in the passage I have quoted, the only loss caused by a
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36. The contribution of the common law to the employment revolution has been by the evolution of implied terms in the contract of employment. The most far-reaching is the implied term of trust and confidence. But there have been others. For example, in
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57. My Lords, I do not think that it is a proper exercise of the judicial function of the House to take such a step. Judge Ansell, to whose unreserved judgment I would pay respectful tribute, went in my opinion to the heart of the matter when he said:
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consolidates numerous statutes which have conferred rights upon employees. European law has made a substantial contribution. And the common law has adapted itself to the new attitudes, proceeding sometimes by analogy with statutory rights.
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35. My Lords, the first question is whether the implied term of trust and confidence upon which Mr Johnson relies, and about which in a general way there is no real dispute, or any of the other implied terms, applies to a dismissal. At
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was regarded by the courts as a contract like any other. The parties were free to negotiate whatever terms they liked and no terms would be implied unless they satisfied the strict test of necessity applied to a commercial contract.
203:, which requires that an employee be provided with a written statement of the particulars of his employment, including a note of how he may apply if he has any grievances. So statute and common law have proceeded hand in hand. 135:
The House of Lords held that while Mr Johnson had been dismissed unfairly there could be no compensation for the manner of Mr Johnson's dismissal if that would exceed the statutory scheme laid out in the
127:. The House of Lords ruled that employees cannot claim common law damages for the manner of their dismissal, as such claims are confined to statutory remedies for unfair dismissal. 234: 216:
43. On the other hand, I do not say that there is nothing which, consistently with such an express term, judicial creativity could do to provide a remedy in a case like this. In
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case itself, damages were recoverable for financial loss flowing from damage to reputation caused by a breach of the implied term of trust and confidence.
597: 416: 612: 304: 500: 119:, in 1994 Mr Johnson was dismissed for an alleged irregularity in his work. He suffered a mental breakdown, drank heavily, was admitted to 592: 218: 364: 297: 432: 376: 460: 404: 602: 488: 194: 124: 327: 264: 200: 184: 137: 227: 183:. The law has changed to recognise this social reality. Most of the changes have been made by Parliament. The 170: 474: 225:
44. My Lords, such an approach would in this country have to circumvent or overcome the obstacle of
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case on the measure of damages for unfair dismissal and the nature of the contract of employment.
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her life. It gives not only a livelihood but an occupation, an identity and a sense of
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Unfair dismissal, injury to feelings, compensation, contract of employment
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made some important remarks on the contract of employment.
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Lordships are invited to create such a cause of action.
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opportunity to demonstrate that no such cause existed.
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Mahmud v Bank of Credit and Commerce International SA
79: 68: 53: 45: 31: 248:case does not stand in the way. That is why in 162: 146: 305: 8: 618:United Kingdom employment contract case law 312: 298: 290: 37: 28: 418:Taylor v Secretary of State for Scotland 540: 405:McClelland v NI General Health Services 391:Société Générale, London Branch v Geys 501:Edwards v Chesterfield Royal Hospital 7: 195:W A Goold (Pearmak) Ltd v McConnell 219:Wallace v United Grain Growers Ltd 144:Lord Nicholls said the following. 111:After twenty years of working for 25: 365:Gunton v Richmond upon Thames LBC 433:Horkulak v Cantor Fitzgerald Int 377:Boyo v London Borough of Lambeth 598:2001 in United Kingdom case law 268:not subject to any such limit. 613:United Kingdom labour case law 489:Hill v CA Parsons & Co Ltd 461:Eastwood v Magnox Electric plc 1: 154:harsh, humiliating manner. 125:mutual trust and confidence 634: 328:Employment Rights Act 1996 265:Employment Rights Act 1996 201:Employment Rights Act 1996 185:Employment Rights Act 1996 138:Employment Rights Act 1996 593:English contract case law 511: 497: 485: 471: 457: 443: 429: 413: 401: 387: 373: 361: 347: 335: 325: 228:Addis v Gramophone Co Ltd 84: 36: 577:A Casebook on Labour Law 549:A Casebook on Labour Law 320:Wrongful dismissal cases 93:Johnson v Unisys Limited 57:March 22, 2001 18:Johnson v Unisys Limited 283: 278: 171:contract of employment 151: 274: 603:House of Lords cases 579:(Hart 2019) ch 3, 96 551:(Hart 2019) ch 3, 96 475:Barber v Somerset CC 351:Johnson v Unisys Ltd 32:Johnson v Unisys Ltd 176:Freedom of contract 519:wrongful dismissal 263:56. Part X of the 241:wrongful dismissal 525: 524: 89: 88: 16:(Redirected from 625: 564: 558: 552: 545: 419: 314: 307: 300: 291: 64: 62: 41: 29: 21: 633: 632: 628: 627: 626: 624: 623: 622: 583: 582: 572: 567: 559: 555: 546: 542: 538: 526: 521: 507: 493: 481: 467: 453: 447:Reda v Flag Ltd 439: 425: 417: 409: 397: 383: 369: 357: 343: 339:Wilson v Racher 331: 321: 318: 288: 133: 121:mental hospital 109: 60: 58: 23: 22: 15: 12: 11: 5: 631: 629: 621: 620: 615: 610: 605: 600: 595: 585: 584: 581: 580: 571: 568: 566: 565: 553: 539: 537: 534: 533: 532: 523: 522: 512: 509: 508: 498: 495: 494: 486: 483: 482: 472: 469: 468: 458: 455: 454: 444: 441: 440: 430: 427: 426: 414: 411: 410: 402: 399: 398: 388: 385: 384: 374: 371: 370: 362: 359: 358: 348: 345: 344: 336: 333: 332: 326: 323: 322: 319: 317: 316: 309: 302: 294: 287: 284: 132: 129: 108: 105: 87: 86: 82: 81: 77: 76: 70: 66: 65: 55: 51: 50: 49:House of Lords 47: 43: 42: 34: 33: 24: 14: 13: 10: 9: 6: 4: 3: 2: 630: 619: 616: 614: 611: 609: 606: 604: 601: 599: 596: 594: 591: 590: 588: 578: 575:E McGaughey, 574: 573: 569: 562: 557: 554: 550: 547:E McGaughey, 544: 541: 535: 531: 530:UK labour law 528: 527: 520: 516: 515:UK labour law 510: 506: 503: 502: 496: 491: 490: 484: 480: 477: 476: 470: 466: 463: 462: 456: 452: 449: 448: 442: 438: 437:EWCA Civ 1287 435: 434: 428: 424: 421: 420: 412: 407: 406: 400: 396: 393: 392: 386: 382: 379: 378: 372: 367: 366: 360: 356: 353: 352: 346: 341: 340: 334: 329: 324: 315: 310: 308: 303: 301: 296: 295: 292: 285: 282: 277: 273: 269: 266: 261: 259: 255: 253: 251: 247: 242: 237: 236: 230: 229: 223: 221: 220: 214: 210: 208: 204: 202: 197: 196: 189: 186: 182: 177: 172: 168: 161: 159: 158:Lord Hoffmann 155: 150: 145: 142: 139: 130: 128: 126: 122: 118: 117:Milton Keynes 114: 106: 104: 102: 101:UK labour law 99:is a leading 98: 95: 94: 83: 78: 74: 71: 67: 56: 52: 48: 44: 40: 35: 30: 27: 19: 576: 556: 548: 543: 499: 487: 473: 459: 445: 431: 415: 403: 389: 375: 363: 350: 349: 337: 279: 275: 270: 262: 260: 256: 254: 249: 245: 233: 226: 224: 217: 215: 211: 209: 205: 193: 190: 163: 156: 152: 147: 143: 134: 110: 92: 91: 90: 26: 381:EWCA Civ 28 181:self-esteem 75:, IRLR 279 587:Categories 570:References 244:contract, 167:common law 61:2001-03-22 408:1 WLR 594 69:Citations 286:See also 250:Mahmud's 131:Judgment 80:Keywords 561:UKHL 13 505:UKSC 58 479:UKHL 13 465:UKHL 35 451:UKPC 38 423:UKHL 28 395:UKSC 63 368:ICR 755 355:UKHL 13 342:ICR 428 281:extent. 246:Addis's 115:Ltd in 97:UKHL 13 73:UKHL 13 59: ( 54:Decided 608:Unisys 492:Ch 305 169:, the 113:Unisys 536:Notes 107:Facts 46:Court 517:and 513:see 330:s 86 232:In 589:: 563:, 313:e 306:t 299:v 63:) 20:)

Index

Johnson v Unisys Limited

UKHL 13
UKHL 13
UK labour law
Unisys
Milton Keynes
mental hospital
mutual trust and confidence
Employment Rights Act 1996
Lord Hoffmann
common law
contract of employment
Freedom of contract
self-esteem
Employment Rights Act 1996
W A Goold (Pearmak) Ltd v McConnell
Employment Rights Act 1996
Wallace v United Grain Growers Ltd
Addis v Gramophone Co Ltd
Mahmud v Bank of Credit and Commerce International SA
wrongful dismissal
Employment Rights Act 1996
v
t
e
Employment Rights Act 1996
Wilson v Racher
Johnson v Unisys Ltd
UKHL 13

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