News
The Impact of the Shrewsbury Appeal
29 September 2009
The EAT decision in Shrewsbury & Telford Hospital NHS Trust v Dr Lairikyengbam [2009] EAT 0499/08 has a significant impact on a number of key aspects of employment law. Jurisdictional issues involving ultra vires contracts, the definition of redundancy and the Tribunal practice and procedure itself are all dealt with. So what are the implications?
The background
In September 2008 the Employment Tribunal decided that Dr Lairikyengbam was an employee of the Shrewsbury & Telford Hospital NHS Trust (the Trust) and that he had been unfairly dismissed on the grounds of redundancy. Damages were also awarded for the failure to pay contractual redundancy pay. Faced with a significant award against it the Trust appealed the decision.
Not an employee
In 2003 Dr Lairikyengbam had been appointed as a locum consultant for a fixed term of six months although the period was extended several times. In 2005 he also received a letter and a contract of employment confirming his continued appointment as a locum.
In 2006 the Trust’s Medical Director issued a management instruction advising that under no circumstances should locums be appointed for longer than 12 months. Despite this Dr Lairikyengbam’s contract was extended for a fixed period up until 30 April 2007. He was then informed In February 2007 that his fixed term contract would not be renewed after 31 March 2007.
Dr Lairikyengbam was informed that there was no redundancy situation as his position was still required and that his contractual position was in fact ultra vires as his appointment contravened the instruction from the Medical Director.
The EAT held he was an employee and that the contract was not ultra vires and therefore void. Although the Trust may have contravened Regulations to prevent locum appointments lasting for more than 12 months, the Trust had the capacity to appoint locums. Consequently with such capacity the contract was not ultra vires. Dr Lairikyengbam was entitled to pursue claims he had been unfairly dismissed as an employee.
No redundancy?
The Trust also argued that there was no distinction between a locum consultant and a consultant post. The EAT agreed and held that the Tribunal had been wrong to conclude there was such a distinction to reach the decision that there was a redundancy situation.
With no distinction between consultants being shown, there was no evidence that the role of a consultant had diminished or ceased. Therefore Dr Lairikyengbam’s dismissal as a locum consultant was not on the grounds of redundancy and that decision by the Tribunal was perverse.
Employers will have to be wary of how they classify redundant positions like this in future and be able to provide evidence to support their case.
Procedural split perverse too
The Trust’s final appeal related to the ET’s procedure. It argued that the parties clearly agreed that the hearing would proceed as a split trial with evidence on liability being heard then on remedy. Instead the Tribunal went onto consider the remedy having heard only the evidence on liability. The EAT agreed with the Trust. The Tribunal should not have made a decision until the evidence on remedy had been heard.
The EAT concluded that Dr Lairikyengbam’s claim for unfair dismissal should now be remitted to a fresh Tribunal.
Pam Loch, founder of boutique employment law firm,
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