In this article Nigel Brockley examines where the dividing line between Employment Tribunals and civil courts lies when determining claims for breach of contract.

Whether due to the limited route of appeal, the quality of judgment or for other more specific motivations (such as in the case of Rolls Royce-v-Unite the Union [2010] 1 WLR 318), an increasing number of litigants appear to be seeking to move away from having their employment disputes determined before an Employment Tribunal, preferring instead to take the costs risks associated with civil court trials. One such area would appear to be the ET’s jurisdiction to determine contractual disputes.

The Employment Tribunals Extension of Jurisdiction Order (England and Wales) Order 1994 (“the Order”) provides, by Article 4, that any breach of contract claim must arise or be outstanding when the employment is terminated. This seems to be a clear demarcation of where the ET’s jurisdiction ends. In the case of contingent claims, or those arising after termination, such claims have already been considered (and rejected) by the courts in the cases, respectively of Peninsula Business Services Ltd-v-Sweeney [2004] IRLR 49 and Miller Bros and FP Butler-v- Johnston [2002] ICR 744. But is it in fact the end of the ET’s involvement with such claims?

Inspite of the decisions both of the Court of Appeal, in the case of Southern Cross-v-Perkins [2011] IRLR 247, and the EAT, in Hamilton-v-NHS Grampian UKEATS/0067/10, in which the need to guard against the enlargement of the ET’s (breach of contract) jurisdiction to:

“..embrace workplace disputes during the currency of a contract of employment..”

it would seem not; for in all but name that is precisely what Employment Judges are doing when they are called upon to make determinations under both Part 1 (section 11 disputes concerning employment particulars) and Part 2 (section 13 unlawful deductions) ERA claims. The critical distinction in determining the ET’s jurisdiction would seem to be whether, when faced with such claims, the task is one of artificially constructing, devising or inventing a term rather than merely interpreting an existing one. This at least, is what can be deduced from the decisions in Southern Cross and Parker-v-Northumbrian Water [2011] IRLR 652 in relation to Part 1 claims. However, even in the judgment in Parker Judge Hand QC (seemingly in reliance upon the decision in Southern Cross) was content to approve the identification of the terms of a contract of employment in determining what employment particulars should have been included.

Whether then there is an unresolved issue of the more indulgent treatment by Employment Judges of Part 2 claims as opposed to Part 1 claims, or whether Southern Cross is seen as being restricted (in its application) to Part 1 claims, a body of cases, at least, proceeds on the basis that the resolution of a dispute about the existence of a contractual term during the continuation of a contract of employment is permissible and this would, indeed, seem to point to an “enlargement” of the contractual claims heard by the ET. This can be seen in cases such as Greg May (Carpet Fitters & Contractors) Ltd-v-Dring [1990] ICR 188 and Dunlop Tyres Ltd-v-Blows [2001] IRLR 629. In the former case the EAT rejected an argument (under the relevant provisions of the Wages Act) that the ET did not have jurisdiction to determine an unlawful deduction claim where the deduction was in dispute on the basis that the employer contended that it was not liable to pay it.

Whilst it is noteworthy that the Order had not been made at the time of the decision in Greg May-v-Dring, and that the arguments before the Court in Dunlop did not have regard to the Order, the Court of Appeal (in Dunlop) was content to resolve an issue about contractual interpretation which would seem to be inconsistent with the doubts expressed by Judge Hand in Parker and it is to be noted that Judge Hand had infact been instructed as leading Counsel for the Appellants in Dunlop.

In the recent case of Mears Ltd-v-Salt UKEAT/0522/11, the Appellants sought unsuccessfully to urge upon the Tribunal a limitation in respect of the ET’s jurisdiction to entertain an unlawful deduction claim in respect of a travelling allowance (which had not been reduced into writing in any contractual documentation). The Appellants relied upon the decision in Southern Cross.

The author appeared on behalf of the Respondents and permission is presently being sought to appeal. If this appeal is permitted to proceed, it is hoped that this will resolve the tension between the treatment of Part 1 and Part 2 ERA claims, which may in turn lead to the retention of more such disputes before the ET.