The Jersey Royal Court has recently held that the damages available for wrongful dismissal, may not, in some circumstances, be limited to compensation for the contractual notice period.
The standard common law approach to assessing damages arising from the termination of a contract of employment is to limit such damages to the sums which would have been received during the applicable period of notice. In this, the Jersey courts have followed the UK approach to such issues.
There are however, a limited number of recognised exceptions to this general rule which may increase the available damages to claimants. One such recent Jersey example saw the Royal Court authority consider that where there is a contractual disciplinary or redundancy procedure or where there are express rights to contractual sick pay (or other long term sickness benefits), the available damages extend beyond the notice period.
In this case, Jersey's Royal Court found that a surgeon dismissed by the States Employment Board (the employer of all public employees in Jersey) after a contract of employment had been entered into but before his employment with the States of Jersey had actually commenced is entitled to damages 'at large' (eg unconstrained by the contractual notice period in his employment contract).
The judgment, Alwitry v The States Employment Board, potentially has very significant implications for Jersey employers – although it should be noted that it is currently being appealed.
Mr Alwitry is a consultant ophthalmologist whose employment was terminated shortly before he was due to commence employment. His contract of employment contained express terms which the Royal Court found limited the employer's right to terminate his employment without cause. The Royal Court went on to hold that the circumstances of the termination of his employment did not amount to 'cause'.
Based on its construction of his employment contract, the Royal Court held that it would be wrong to limit Mr Alwitry's compensation to the period of his contractual notice and that he would be entitled to uncapped damages for the loss of his employment.
It is unusual for a contract of employment to fetter an employer's right to terminate an employee's employment in this manner and so this is maybe seen as a case limited to its specific fact scenario. However, the very fact that the Royal Court is prepared to award damages on this basis should encourage Jersey employers to scrutinise terms of employment relating to notice and termination carefully – particularly those which may apply prior to the commencement of employment.
An original version of this article was published in the Taylor Vinters International Employment Law Update, July 2019.