Sandy Lane Hotel Company Ltd v Juliana Cato
| Jurisdiction | Caribbean States |
| Judge | Saunders,Wit,Anderson,Rajnauth-Lee,Barrow,Mr Justice Saunders,Mme Justice Rajnauth-Lee |
| Judgment Date | 24 March 2022 |
| Court | Caribbean Court of Justice |
| Docket Number | CCJ Appeal No BBCV2021/002 |
[2022] CCJ 8 (AJ) BB
The Honourable Mr Justice Saunders, PCCJ
Mr Justice Wit, JCCJ
Mr Justice Anderson, JCCJ
Mme Justice Rajnauth-Lee, JCCJ
Mr Justice D Barrow, JCCJ
CCJ Appeal No BBCV2021/002
BB Magisterial Appeals Nos 8, 9 and 10 of 2014
IN THE CARIBBEAN COURT OF JUSTICE
APPELLATE JURISDICTION
Employment — contract of service — breach of contract — Wrongful dismissal — employees dismissed following allegations of poor performance — procedure for dismissal on disciplinary grounds incorporated into employees' contract — Whether employer was required to follow disciplinary procedure where employees could be dismissed with notice — Whether employer breached implied term of mutual trust and confidence — Damages — Basis for assessing damages — Severance Payments Act, Cap 355A, s 45(1).
Juliana Cato, Wayne Johnson, and Charmaine Poyer (‘the Employees’), who were dismissed by Sandy Lane Hotel Co Ltd (‘the Company’) in 2011, individually brought actions against the Company in the Magistrates' Court. They claimed damages for wrongful dismissal under s 45 of the Severance Payments Act of 1971 (‘the Act’). The Company denied liability, stating that the Employees had been properly and lawfully dismissed and s 45 was therefore not applicable to them. The Courts below agreed with the Employees.
The Magistrate held that the Collective Agreement executed by the Barbados Workers Union (of which the Employees were members) and the Barbados Employers Confederation for the Barbados Hotel and Tourism Association (of which the Company was a member) was explicitly incorporated into the contracts of the Employees and that, based on the terms of that Agreement, the dismissals were unlawful. The Magistrate ordered the Company to pay damages in the sums claimed.
The Court of Appeal also held that the Employees had been wrongfully dismissed and were entitled to damages, but on the ground that it was not lawful for them to be dismissed without the Company following the disciplinary process incorporated into the Employees' contracts, including the “Champion Rules of the Game” (‘the Rules’). The court agreed with this conclusion and dismissed the Company's appeal.
The Employees were all dismissed in a similar manner. On 30 January 2012, each of them was required to meet individually with the Human Resources Manager (‘the HR Manager’). The HR Manager told them about claims made by a particular hotel guest (the “Mystery Shopper”) in a Report given by that guest to the Company, that they had performed poorly in serving that person. They all protested the claims, with Ms Cato stating that she didn't even work in the specified facility on the evening in question (as alleged in the Report), and Ms Poyer indicating that two weeks earlier the Reservationist Manager had congratulated her for an excellent interaction with the Mystery Shopper. The Manager had informed Ms Poyer then that training would be provided on areas that needed to be improved. In spite of this, all three employees were handed already prepared letters of dismissal (‘the Letters’) by the HR Manager, together with a week's wages in lieu of notice and outstanding monies due to them. They were asked to collect their personal items and then escorted off the property.
The Letters were all similarly structured, alleging that an investigation revealed that there was sub-standard performance in relation to the Mystery Shopper; that this poor performance led to a decline in the overall rating of the Company; and that each employee would be dismissed with a week's wages in lieu of notice. The HR Manager admitted that the purpose of the meetings was to terminate the contracts, but that this was done in accordance with the contracts as she looked at the contracts and used the best option available to terminate the employees.
The Court found that the Company could not rely only on the letters of employment as a defence to these claims, as no provision for payment in lieu of notice is to be found in those letters. Without resort to the Rules, which include this provision for payment in lieu of notice, dismissal with such payment in lieu would be a breach of contract and, therefore, wrongful.
The Rules did provide, however, for much more than just payment in lieu of notice. The Rules embodied a full disciplinary code of both substance and procedure, inclusive of a long list of specific offences. That list included the offences of which the Employees were accused in their respective letters of dismissal.
The disciplinary procedure set out in the Rules required written notification of hearings in instances where suspension or dismissal was possible. That notification had to include the charges against the employee and the date, time, and place of the hearing. Employees needed to be informed of their right to have Shop Stewards or union officials or a friend present during the proceedings. Paragraph 4 of the Procedure clearly stated, “No case involving disciplinary action shall be brought against an employee until the above steps have been taken, except in instances which warrant summary dismissal”. Paragraph 5 boldly promised that, “Any disciplinary action taken without following the above procedure shall be set aside”.
The Rules specifically indicated, under the heading, PERFORMANCE, that “If your performance is not satisfactory you will be given every opportunity through counselling, training and re-training before being terminated for poor performance”.
The Court acknowledged that the Rules made provision for dismissal with a week's notice or a week's wages in lieu of notice but there was nothing in the Rules to suggest that this provision was overriding. Moreover, that provision was at variance with the elaborate provisions for the disciplinary procedure to be followed before an employee is dismissed for poor performance.
The Court rejected the notion that the dominant party in the relationship can simply cherry pick the rule that worked best for it and ignore all others. The Court employed the contra proferentem principle. This principle allows the Court to construe inconsistencies in a contract against the interests of the party who wrote the contract, especially where, as here, that party is the dominant one in the relationship. The Court held that it is only reasonable that the provisions that specifically addressed sub-standard performance should have been invoked by the Company instead of the general provision for dismissal with one week's wages in lieu of notice.
The Court agreed with the Court of Appeal that the Rules should be interpreted in context. This context changed with the passage of the Employment Rights Act 2012 of Barbados. This latter Act was not operational at the time the Employees were dismissed. The Employees' contracts must therefore be interpreted on the understanding that the law at the time of their dismissal did not allow them the option of making a claim for unfair dismissal.
The Court also noted that the common law implies into every contract of employment a term of “mutual trust and confidence” to ensure that employees are treated fairly and that employers do not conduct themselves in a manner that destroys or seriously damages the relationship of confidence and trust between employer and employee. The Court thus held that the Company not only breached the express terms in its own Rules by sending home the Employees, who had given a combined total of almost 30 years' service, with the bare minimum of one week's notice, but it also breached the implied term of mutual trust and confidence.
Having found that the Employees had established that there had been a breach of their contracts, and that this breach resulted in wrongful dismissal, and noting that the Employees had claimed damages, the Court held that the Employees were entitled to have their damages assessed at an amount not less than if they had been made redundant and were entitled to severance pay in keeping with s 3 of the Act. The Court thus dismissed the appeal with costs to the Employees calculated in accordance with Rule 17.15(3)(b) of the Caribbean Court of Justice (Appellate Jurisdiction) Rules, 2021.
Barbados Plastics v Taylor (1981) 16 Barb LR 79; Caribbean Commercial Bank Ltd v Daniel (Barbados CA, 25 June 1998); Clarke v American Life Insurance Co (Barbados CA, 2 July 2002); Correia's Jewellery Store Ltd v Forde (1992) 46 WIR 57; Delaney v Staples [1992] 1 AC 687; Eastwood v Magnox Electric plc [2005] 1 AC 503; Edwards v Chesterfield Royal Hospital [2012] 2 AC 22; Geys v Société Générale, London Branch [2013] 1 AC 523; Gunton v Richmond-Upon-Thames London Borough Council [1981] Ch 448; Hinds v Barbados Board of Tourism (Barbados HC, 16 October 1990); Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] 1 WLR 589; Johnson v Unisys [2003] 1 AC 518; Jones v Lee [1980] IRLR 67; Malik v Bank of Credit and Commercial International SA [1998] AC 589; Malone v British Airways PLC [2011] IRLR 32; Sea Haven Inc v Dyrud [2011] CCJ 13 (AJ) (BB), (2011) 79 WIR 132; Shipping Association of Georgetown v Hayden (1975) 22 WIR 135; Speednet Communications Ltd v Public Utilities Commission [2016] CCJ 23 (AJ) (BZ); Wiltshire v Grenada Ports Authority (Grenada HC, 27 January 1995).
Barbados — Employment Rights Act 2012, Severance Payments Act, Cap 355A; St Lucia – Civil Code of Saint Lucia, Cap 4.01; United Kingdom — Contracts of Employment Act 1963, Redundancy Payments Act 1965, Severance Payments Act 1969.
Beale H (ed), Chitty on Contracts (33rd edn, Sweet & Maxwell 2018) vol 1; Corthésy N and Harris-Roper C, Commonwealth Caribbean Employment and Labour Law (Routledge, 2014); Donovan T R, Royal...
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