As set out in a previous blog post - the Royal Court found that the termination of Mr Alwitry’s employment contract was unlawful and that, upon the proper construction of the consultant contract, the SEB were not entitled to dismiss him without cause.
There is nothing out of the ordinary in respect of a finding that a termination by an employer was unlawful. This happens frequently. Further, an employer can often terminate the employment relationship without cause and will only be exposed to a limited liability in damages, corresponding to the employee’s wages during their notice period (plus any potential liability for unfair dismissal).
Mr Alwitry’s case is important because it demonstrates that an employer’s right to terminate on notice for no cause can be fettered by the express terms of the contract of employment. In Mr Alwitry’s case, the terms of the consultant contract, as found by the Royal Court, restricted the ability of the employer (the SEB) to dismiss Mr Alwitry without cause. On its proper construction, the SEB were only entitled to dismiss Mr Alwitry for a contractually prescribed (or some other substantial) reason. The Royal Court found that there was no such reason for dismissing Mr Alwitry, and consequently the SEB’s breach of contract in doing so sounded in damages uncapped by reference to any notice period.
The finding is important because it clarifies that Mr Alwitry has a breach of contract claim for which damages are not limited, as they may otherwise have been if the employment terms permitted termination for no reason or cause. The issue of Mr Alwitry’s damages is to be the subject of another trial, failing earlier resolution of the matter.
However, prior to the issue of quantum being dealt with, the SEB sought to appeal the Royal Court’s decision. There was no appeal on the legal issue that an employment contract can, if its terms allow, fetter an employer’s right to dismiss for no cause or reason. Further, there was no appeal by the SEB against the decision that the consultant contract included such a fetter. However, the SEB did appeal against the Royal Court’s decision that: (a) Mr Alwitry’s actions had not caused the employment contract to be repudiated; and (b) the SEB was not entitled to dismiss Mr Alwitry on the basis of the wide triggering event, “some other substantial reason” – in this case a fundamental breakdown in working relationships.
The Court of Appeal dismissed the SEB’s appeal on all grounds and rejected a further application for the matter to be referred up to the Privy Council. The SEB nevertheless renewed its application for leave to appeal directly to the Judicial Committee of the Privy Council.
Following detailed written submissions from both parties, the Privy Council recently rejected the SEB’s renewed application for leave to appeal. Significantly, it did so on the basis that the SEB’s application did not raise any arguable point of law.
Accordingly, the decisions of the Royal Court and Court of Appeal stand. The employment contract can – and, in Mr Alwitry’s case, did – fetter the right of an employer to terminate for no cause. The consultant contract is a special type of contract, not least of all because of the obligations on consultants to put the interests and safety of patients first. Mr Alwitry’s case should give comfort to consultants on the Island that their employment enjoys greater security than most, particularly should they need to raise any concerns about working practices or the safety of their patients. This decision at the highest judicial level is therefore ultimately to the benefit of the Hospital and Islanders as a whole.
Mr Alwitry has been, and continues to be, supported by the British Medical Association in this litigation. He is represented by Advocate Steven Chiddicks (Sinels) and Nick Pointon (St John’s Chambers).