Round Walker Claimant v The Grenada Hotel Ltd (Trading as R Grenadian) Defendant [ECSC]

• Jurisdiction: Grenada
• Judge: HENRY J.
• Judgment Date: 09 February 2010
• Judgment citation (vLex): [2010] ECSC J0209-1
• Court: Supreme Court (Grenada)
• Docket Number: CLAIM NO. GDHACV2006/0507
• Date: 09 February 2010

[2010] ECSC J0209-1

IN THE SUPREME COURT OF GRENADA

AND THE WEST INDIES ASSOCIATED STATES

HIGH COURT OF JUSTICE

(CIVIL)

CLAIM NO. GDHACV2006/0507

Between:

Round Walker

Claimant

and

The Grenada Hotel Limited

(Trading as Rex Grenadian)

Defendant

Appearances:

Ms. Sabrita Khan for the Claimant

Mr. Dickon A. Mitchell for the Defendant

HENRY J.

1 Mr. Walker commenced employment with the defendant (hereinafter the Employer) in 1995 as a Sous Chef. On 6 ^th June, 2003, he accepted an offer for promotion to the position of Executive Chef under a written contract for a period of 2 years. On 3 ^rd May, 2004 by letter, the Employer terminated Mr. Walker's employment. The stated reason was that his performance as Executive Chef did not satisfy their required standard. Mr. Walker was paid three month salary in lieu of notice. Mr. Walker thereafter commenced this action claiming general and special damages for wrongful dismissal.

2 In his Statement of Claim, Mr. Walker asserts that his termination was without justification and/or prior notice. Mr. Walker admitted receipt of payments from the Employer in lieu of notice, vacation pay, and salary for the month of May 2004 but asserts that the Employer has refused to pay him termination allowance at the rate of four (4) weeks per each completed year of service in violation of the Employment Act (as amended) No. 14 of 1999. Mr. Walker further alleges that he has suffered loss and seeks special damages in the sum of $74,567.50 in addition to general damages.

3 The Employer admits that it summarily terminated Mr. Walker's employment. However, the employer asserts that the contract of employment was terminated in accordance with the terms of sub paragraph 3 of paragraph 7 of the said contract. Furthermore, that the employer had adequate grounds to terminate its contract with Mr. Walker.

4 The issues for the Court are :

The Contract

• 1. Was Mr. Walker's employment wrongfully terminated under the terms of his contract?

• 2. If so, what are his damages?

5 Mr. Walker asserts that his contract is comprised of the Job Letter dated 4 ^th June, 2003 together with the Staff Handbook. It is alleged that the Handbook states "together with your offer of employment letter, job description and particulars of employment this Staff Handbook forms part of your Contract of Employment." I have perused the Handbook in question. It is obvious from the language that it makes a distinction between staff and management, and that the Handbook is in respect of staff only. Mr. Walker describes himself as part of the Employer's senior management. Therefore, the Handbook is not applicable to him, and his contract consists of the letter agreement signed by Mr. Walker dated 4 ^th June, 2003.

Wrongful Termination

6 The claim filed by Mr. Walker is one based solely on wrongful dismissal. An employee at common-law has a right not to be wrongfully dismissed. This common-law right is based on contract as opposed to a claim for unfair dismissal which is, as Sir Vincent Floissac CJ explained in Burrell v Schneider (1995) 50 WIR 193, a statutory right based on social policy. An unfair dismissal claim presupposes that the claimant has no contractual entitlement to continued employment, while a wrongful dismissal claim asserts contractual rights. See the judgment of the Privy Council in Corbette v National Commercial Bank of Dominica [2009] UKPC 32.

7 The gravamen of the claimant's complaint as set out in the Statement of Claim, is that his termination violates both his employment agreement and the provisions of the Employment Act No. 14 of 1999. Specifically he asserts that the employer, in breach of its agreement and contrary to the Employment Act, has refused to pay the claimant termination allowance at the rate of four (4) weeks per each completed year of service, the claimant being part of the employer's senior management team.

8 The employer relies on Paragraph 7 of the contract between the parties. It's provisions are therefore crucial to the resolution of the issues. I therefore set them out verbatim.

"7. Probation and Termination. Your initial appointment from the date on which you commence duties as Executive Chef will be for a three month probationary period, during which either The Grenadian Hotel Limited or yourself, may give one month's notice, or make payment in lieu of such notice, of any decision to terminate your employment.

On satisfactory completion of this probationary period, which may be extended by the Grenadian Hotel Limited at their sole discretion for up to a maximum of a further three months, you will receive confirmation of your permanent appointment.

From that date, both the Grenadian Hotel Limited and yourself will be required to give three month's written notice, or make payment in lieu of such notice of any decision to terminate your employment. Such notice payments refer to basic salary only and do not include any allowances or any other entitlements.

Notwithstanding the above provision, should you at anytime be adjudged bankrupt, bring the company and associated companies or employees into disrepute, or give any other just reason, your services may be terminated summarily without compensation."

9 As noted by the Authors of Chitty on Contract, contracts of employment are frequently in practice terminated by payment in lieu of notice. Lord Browne-Wilkinson in Delaney v Staples [1992] 1 ICR 283 identified at least 4 categories of payment in lieu of notice. One such category is where the contract of employment provides expressly that the employment may be terminated either by notice or, on payment of a sum in lieu of notice, summarily. His Lordship concluded that in such a case summary dismissal accompanied by payment in lieu of notice is not in breach of the contract. See also the cases of Abraham v Performing Rights Society Ltd. [1995] ICR 1028 and Gregory v Wallace [1998] IRLR 387. The provisions of Paragraph 7 fall within this category. Therefore the Employer is not in breach of its contract with Mr. Walker by making payment in lieu of the three months notice specified in the contract.

10 However, section 3 of the Employment Act No. 14 of 1999 provides that any provision in an agreement shall be void to the extent that it seeks to exclude or in any way limits the operation of any provision of the Act to the detriment of the employee. Section 5 provides that nothing in this Act precludes better terms and conditions than those set out in the Act being agreed upon. To the extent that Paragraph 7 provides for three months notice or payment in lieu thereof, the clause is not void since those terms are more favourable to the employee than the provisions set out in the Act.

11 As to the stated reasons for the dismissal, Mr. Walker claims that the Employer's purported dismissal of him on the basis of substandard performance was not justified. The Court notes that in order to be summarily terminated without compensation under the contract, the employee must be guilty of certain conduct set out in the clause. However, under the contract, an employee can be terminated on giving three months notice or payment in lieu thereof in...