Hemmings v Tomlinson Hosp

JurisdictionCayman Islands
Judge(Williams, J.)
Judgment Date28 February 2013
CourtGrand Court (Cayman Islands)
Date28 February 2013
Grand Court, Civil Division

(Williams, J.)

HEMMINGS
and
PMC LIMITED (trading as CHRISSIE TOMLINSON HOSPITAL)

I. Banks for the plaintiff;

P.S. Boni for the defendant.

Cases cited:

(1) Addis v. Gramophone Co. Ltd., [1909] A.C. 488, considered.

(2) Allied Maples Group Ltd. v. Simmons & Simmons, [1995] 1 W.L.R. 1602; [1995] 4 All E.R. 907, referred to.

(3) Bank of Credit & Comm. Intl. S.A. v. Ali (No. 2), [2002] 3 All E.R. 750; [2002] I.C.R. 1258; [2002] EWCA Civ 82, referred to.

(4) Barrett v. Enfield London Borough Council, [2001] 2 A.C. 550; [1999] 3 W.L.R. 79; [1999] 3 All E.R. 193; [1999] 2 FLR 426; [1999] 2 F.C.R. 434, referred to.

(5) Eastwood v. Magnox PLC, [2005] 1 A.C. 503; [2004] 3 W.L.R. 322; [2004] 3 All E.R. 991; [2004] UKHL 35, distinguished.

(6) Edwards v. Chesterfield Royal Hospital NHS Foundation Trust, [2012] 2 A.C. 22; [2012] 2 W.L.R. 55; [2012] IRLR 129; [2011] UKSC 58, applied.

(7) Gunton v. Richmond-upon-Thames London Borough Council, [1981] Ch. 448; [1980] 3 W.L.R. 714; [1980] 3 All E.R. 577, distinguished.

(8) Johnson v. Unisys Ltd., [2003] 1 A.C. 518; [2001] 2 W.L.R. 1076; [2001] 2 All E.R. 801, applied.

(9) Lavarack v. Woods of Colchester Ltd., [1967] 1 Q.B. 278; [1966] 3 W.L.R. 706; [1966] 3 All E.R. 683, referred to.

(10) Malik v. Bank of Credit & Comm. Intl. S.A., [1998] A.C. 20; [1997] 3 W.L.R. 95; [1997] 3 All E.R. 1, distinguished.

(11) Roulstone v. Cayman Airways Ltd., 1992–93 CILR 259, applied.

Employment-termination-‘Johnson exclusion area’-plaintiff not entitled to bring contractual claim unless breach and resulting loss precedes and independent of dismissal-failure to follow disciplinary procedure in breach of implied term of trust and confidence not independent if loss dependent on dismissal

Employment-termination-wrongful dismissal-damages-employee wrongfully dismissed for cause normally entitled to damages for length of time would have served but for dismissal-if notice also given, doctrine of ‘least burdensome obligation’ limits damages to remaining balance of required notice period

The plaintiff brought an action against the defendant for wrongful dismissal and breach of an implied term of trust and confidence in her contract of employment.

The plaintiff had been employed as a licensed practical nurse under a fixed-term contract. Clause 10 of the contract allowed the defendant to terminate the contract immediately for any breach of ethical or professional standards, professional misconduct or violation of any term of the agreement or serious violation of workplace policy, whilst cl. 15 allowed either party to terminate the contract on 30 days” notice without cause. The defendant gave the plaintiff 30 days” notice and dismissed her for gross misconduct on the ground that she had, on multiple occasions, ended her shift early and left the hospital understaffed. The plaintiff alleged that she had always received permission to leave and that a proper investigation, pursuant to a reasonable disciplinary process, would have revealed this.

The plaintiff brought the present action and the defendant applied for it to be struck out as an abuse of process.

The defendant submitted that the plaintiff was not entitled to bring a claim for wrongful dismissal as it had complied with the terms of cl. 15 by giving 30 days” notice. It could rely on the doctrine of ‘least burdensome obligation’ (i.e. the presumption that it would comply with its obligations under the contract in the least burdensome way possible), notwithstanding that there was cause for the dismissal. Further, the plaintiff could not bring

an action for unfair dismissal. The Labour Law (2011 Revision) provided an exhaustive remedy in unfair dismissal cases and the plaintiff was not entitled to bring a common law action in the Grand Court to avoid the Labour Law”s controls and limitations. Moreover, damages could not be awarded for loss of reputation and future prospects on the labour market arising from dismissal and this could not be avoided by framing the claim as a breach of contract.

The plaintiff submitted in reply that the defendant was liable for wrongful dismissal as it was not entitled to rely on the doctrine of least burdensome obligation, since the dismissal was for cause and cl. 15 was not intended for use in these circumstances. Further, the Labour Law (2011 Revision) did not preclude an employee”s bringing a common law action for unfair dismissal as the Labour Tribunal was not able to provide an exhaustive remedy. Moreover, the plaintiff would not have been dismissed for gross misconduct if the plaintiff had followed a reasonable disciplinary process. By failing to do so, the defendant was in breach of an implied term of trust and confidence in the contract of employment and had caused the plaintiff”s reputation and future prospects on the labour market to suffer. As these losses arose from the breach of the implied term, damages in respect of them should be recoverable under an action for breach of contract.

Held, dismissing the action:

(1) The plaintiff was not entitled to bring an action for wrongful dismissal. In a fixed-length contract, a remedy for wrongful dismissal entitled the plaintiff to damages for the length of time she would have served had she not been wrongfully dismissed. However, the doctrine of ‘least burdensome obligation’ measured damages against the least burdensome way of complying with the contract, including the giving of notice at the soonest possible moment. The defendants had been entitled to terminate the contract with 30 days” notice without cause and had done so, notwithstanding that there was cause, and the plaintiff had therefore suffered no recoverable loss. Further, the plaintiff could not claim for unfair dismissal. Although the Labour Tribunal, as created under the Labour Law (2011 Revision), was not as sophisticated as its UK equivalent, the legal regimes were very similar. It was clear from the way the Tribunal had been set up (e.g. the inclusion of strict time limits and the limitations on the available compensation) that the intention of the Cayman legislature had been that it was to be an exhaustive remedy for unfair dismissal. As the parties had not explicitly agreed that a failure to comply with a contractually binding term would give rise to common law damages, and there was no pre-existing claim available at common law, it would be wrong to develop a parallel remedy which would conflict with this intention (paras. 10–13; paras. 25–27; paras. 33–36).

(2) The plaintiff could not bring an action for the alleged breach of the implied term of trust and confidence as any losses which may have arisen were within the scope of the dismissal itself. She would be entitled to

bring such a contractual claim if the breach of the term fell outside ‘the Johnson exclusion area’ (i.e. it preceded, and was independent of, the dismissal). The loss of reputation and future prospects in this case, however, did not arise from the alleged breach (i.e. a failure to follow a reasonable disciplinary process) but from the fact that the plaintiff had been dismissed for gross misconduct. Although the alleged breach was connected to the loss, she was unable to separate it from the dismissal itself and was unable to bring an action for breach of contract (paras. 44–46).

1 WILLIAMS, J.:

Applications

In a writ of summons and statement of claim filed on June 8th, 2012, the plaintiff claimed (i) damages for wrongful dismissal for breach of her employment contract, (ii) a payment for breach of contract in respect of accrued banked hours, (iii) a payment for a breach of contract concerning lost overtime pay, (iv) damages, as the manner of dismissal amounted to a

breach of the implied term of trust and confidence between the employer and employee, and (v) damages for defamation.

2 As the hearing progressed, Mr. Banks, who was appearing for the plaintiff, indicated that the claims in relation to accrued banking hours, overtime and defamation were no longer being pursued. Mr. Banks indicated that only the claims for damages for wrongful dismissal due to a failure to follow a proper disciplinary process and for breaches of the implied term of trust and confidence remained for the court to determine.

3 The plaintiff alleges that she has suffered a loss of the earnings, vacation pay, pension and health benefits which she would have received if the fixed-term contract had run to its natural conclusion. The plaintiff seeks damages for ‘damage to feelings and loss of dignity’ and ‘potential loss of work at a comparable salary’ due to a loss of reputation and preclusion from further employment in her chosen field.

4 The matter comes before me on the defendant”s application to strike out the writ and statement of claim, with an alternative prayer for summary judgment or, in the alternative, for the determination of certain questions of law pursuant to the Grand Court Rules, O.14A. The defendant”s position is that all the remaining claims are bad in law.

5 The attack on the statement of claim made by the defendant is best described by looking at the orders in its summons filed on September 10th, 2012, which are still sought, namely that-

(i) paras. 6–56 of the writ of summons and statement of claim be struck out pursuant to GCR, O.18, r.19 as disclosing no reasonable cause of action and/or on the basis that they are an abuse of process;

(ii) each one of the plaintiff”s claims for breach of contract be dismissed and judgment be entered for the defendant pursuant to GCR, O.14; and

(iii) the plaintiff”s claim for breach of contract (as set out in paras. 6–56 of the writ of summons and statement of claim) be dismissed and judgment be entered for the defendant pursuant to GCR, O.14A.

Background

6 The facts as indicated in the statement of claim which are relevant to the remaining claims can be summarized as follows. The...

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