| Johnson v Unisys Ltd | |
|---|---|
| Court | House of Lords |
| Citation(s) | [2001] UKHL 13, [2001] IRLR 279 |
| Keywords | |
| Unfair dismissal, injury to feelings, compensation, contract of employment | |
Johnson v Unisys Limited [2001] UKHL 13 is a leading UK labour law case on the measure of damages for unfair dismissal and the nature of the contract of employment.
Contents |
After twenty years of working for Unisys Ltd in Milton Keynes, in 1994 Mr Johnson was dismissed for an alleged irregularity in his work. He suffered a mental breakdown, drank heavily, was admitted to mental hospital, 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 unfairly 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 mutual trust and confidence.
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 Employment Rights Act 1996 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.
In the course of his judgment Lord Hoffmann made some important remarks on the contract of employment.[1]
| “ | 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 common law, the contract of employment 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. Freedom of contract 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 her life. It gives not only a livelihood but an occupation, an identity and a sense of self-esteem. The law has changed to recognise this social reality. Most of the changes have been made by Parliament. The Employment Rights Act 1996 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. 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. |
” |
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 harsh, humiliating manner.
|
|||||||||||||||||||||||||||||||||||||||||