Cylaw

NAVY ARMY & AIR FORCE INSTITUTES (N. A. A. F. I.) ν. TASSOS IOANNIDES (1968) 1 CLR 147

(1968) 1 CLR 147

1967 December 1

[*147]

[VASSILIADES, P., LOIZOU, HADJIANASTASSIOU, JJ.]

NAVY ARMY & AIR FORCE INSTITUTES

(N.A.A.F.I.),

Appellants-Defendants,

TASSOS IOANNIDES,

Respondent-Plaintiff.

(Civil Appeal No. 4640).

Master and Servant-Dismissal-Misconduct-Employee dismissed summarily and without notice for grave misconduct-Contract of service-Construction-Clause 2 of the contract making provision for mode of termination of service by parties thereto-Proviso to that clause providing for summary dismissal of the employee in case of grave misconduct “on duty”-Meaning and effect of the words “on duty” in proviso-Whether the meaning is to the effect that the misconduct should take place during duty’s hours-Or whether master’s common law right of summary dismissal for misconduct has been fully reserved in the contract.

Contract-Contract of service-Dismissal-Construction-See above.

Contract of service-Dismissal-Construction-Common law right of master to dismiss his employee summarily-Whether such right reserved in the contract of service subject matter of these proceedings-See above.

Dismissal-See above.

Wrongful dismissal-See above.

Collective agreement-Terms embodied in the particular contract of service-See, also, above.

This is an appeal by the employers-defendants against a Judgment of the trial Court awarding to the plaintiff-respondent £88 damages for wrongful dismissal.

The respondent had been in the service of the appellants as from February 1956 until the 27th May, 1965, when he was summarily dismissed by his employers (the appellants) purporting in doing so to act under the relevant written contract of service. The relevant clause of this agreement is clause 2 under the heading “Basis of Engagement” [*148] which makes provision, inter alia, for the mode of termination of the service by the parties. Under this clause the respondent was liable to give or receive one month’s notice, the employers being entitled to pay one month’s salary in lieu of notice. Then follows the material proviso, which reads as follows:

“Provided always that in the case of all employees the Corporation reserves the right to dismiss summarily without notice or payment of wages in lieu of notice where the employee has been guilty of grave neglect of his duties or misconduct on duty within his control such as to render impracticable the continued relationship of employer and employee for a moment longer”.

It is common ground that the incident of the 26th May, 1965, as a result of which the respondent was summarily dismissed on the 27th May, 1965 was an assault committed by the respondent on his immediate superior and manager Mr. I. in the following circumstances. The respondent was on duty at the shop until 9 p.m. when the shop closed. At about 10 p.m. be went to the adjacent corporals’ mess where his superior the said Mr. I. was on duty and where the respondent had no business to be-and there he solicited a drink from a serviceman which he was forbidden to have. The manager (the said Mr. I.) refused to let him have the drink, there followed an argument between them and the respondent struck the manager on the mouth wounding him on the upper lip.

The appellants admit that they have dismissed the respondent summarily without notice or payment, but allege that they did so “in exercise of their right under the agreement of the 4th December, 1959, the plaintiff having been guilty of misconduct on duty within his control such as to render impracticable the continued relationship of employer and employee for a moment longer” (see the proviso to clause 2 of the agreement supra).

The respondent did not dispute the appellants’ allegations, with the exception that the incident occurred while he was on duty. The respondent’s case, which was upheld by the trial Court, was indeed that the incident or misconduct took place while he was not “on duty”; and therefore the aforesaid proviso was not applicable, he being [*149] liable to be dismissed only by one month’s notice or payment of one month’s wages in lieu of notice.

It was contended on behalf of the appellants that the trial Court construed this proviso narrowly and missed the real gist of it; that the whole clause 2 (supra) is dominated by the concluding words “such as to render impracticable the continued relationship of employer and employee for a moment longer”.

In dismissing the appeal by majority (Vassiliades P. dissenting) the Court:-

Held, per Loizou J.

(1) To my mind the words “on duty” in the proviso (supra) clearly import the meaning that the right to dismiss summarily without notice was limited not only to cases where the misconduct was such as to render impracticable the continued relationship of employer and employee but, also, to cases where such misconduct was committed by the employee while he was actually on duty or engaged in the performance of his duties.

(2) The intention of the parties can best be gathered from the words they choose to use; and I cannot think that the parties here could have intended that the employers’ right to dismiss summarily without notice should apply generally to any misconduct, irrespective of when it was committed, so long as it was of the nature and degree described in that proviso (supra); if that was their intention one might think that the words “on duty” would be quite superfluous.

(3) In the light of the above I am of the opinion that the view taken by the trial Court that, in the circumstances, this case does not fall within the clause of the contract of service entitling the appellants to dismiss summarily without notice, is correct. (Tomlinson v. The London Midland and Scottish Railway Co. [1944] I All E.R. 537, at pp. 540F, 541A, per Lord Greene M.R., distinguished.

Held, per Hadjianastassiou, J.

(1) If it was intended that the proviso to clause 2 (supra) should include the common law right of a master to dismiss without notice a servant who was guilty of misconduct whether in the course of his duties or not, [*150] inconsistent with the fulfilment of the express or implied condition of service, it is strange in my view that the parties have elected to insert in the contract express provision limiting the right of immediate dismissal to “misconduct on duty within his control” only.

(2) Counsel for the appellants conceded that the words “misconduct on duty” standing alone could imply that the master intended to limit his common law right of dismissal to the case of misconduct taking place during duty hours; but he argued that because of the concluding words of the proviso (supra), the words “misconduct on duty” were qualified and in effect introduced the common law right of a master to dismiss an employer guilty of misconduct not only on duty but also outside duty hours.

With the greatest respect, the concluding words of the proviso to clause 2 (supra) do not support in my view his construction; because of such express provision in the said proviso; and, in any event, the concluding words in my view apply to the words “misconduct” only, indicating that misconduct must be of such a nature to justify dismissal i.e. misconduct “such as to render impracticable the continued relationship of employer and employee for a moment longer”; and do not in any way affect or qualify the words “on duty” expressly intended by the contracting parties to limit the common law right of the master in the case of misconduct taking place “on duty” only in respect of duties assigned to the employee.

(3) Since the contract provides for summary dismissal on certain stated grounds only, this Court, in my view, ought to be reluctant to imply a term that the servant is liable to be dismissed summarily without notice on the ground of misconduct not on duty. Cf. McClelland v. Northern Ireland General Health Services Board [19571 2 All E.R. 129 H.L.

(4) On a review of the whole case I think that, on the true construction of the proviso to clause 2 (supra), in the special context of this case, the appellants debarred themselves from dismissing summarily the respondent on the facts of this case. In my opinion, the trial Court was justified in its view of the case and in the conclusion at which it arrived.

Held, per Vassiliades P. (in his dissenting judgment):- [*151]

(1) In construing the contract, the Court has to read the words and expressions used by the parties in their context; and, in case of difficulty, to read them in connection with the purpose which such words were intended to serve.

(2) The words “on duty”, same as the words “within his control”, and the phrase “such as to render impracticable the continued relationship of employer and employee for a moment longer” must, I think, be read as referring to, and qualifying the “misconduct” for which the employer can use his right of summary dismissal.

(3) It must be misconduct within the employees control; not misconduct over which he has no control at the material time. Such, for instance, as loss of money or goods or breakages, in circumstances beyond his control. Moreover, it must be misconduct of such a nature as to render impracticable the continued relationship of employer and employee for a moment longer. Such for instance, as his misconduct in the present case, as very rightly, I think, the trial Court held. And furthermore, it must be misconduct connected with the employment.

(4) “Misconduct on duty within his control”, read as meaning misconduct in connection with the employee’s duty to his employers, is consistent with the purpose of the contract; and with the parties’ respective rights and obligations thereunder. Read, on the other hand, as meaning misconduct depending on the clock, as suggested on behalf of the respondent, lead to obvious absurdities, which, in my opinion, cannot have been intended by either side, as demonstrated during the argument; and the facts of this case amply show.

(5)(a) I am, therefore, unable to say that the parties to this contract, either intended to agree, or unwittingly did agree, that for the misconduct in question, the employer would have the right to dismiss summarily the employee, if the assault on the manager took place before the closing of the shop at 9 p.m.; but would have no such right if the assault took place after shop hours.

(b) What the parties agreed in my opinion, and expressly provided for in their contract is that the employer reserved his legal right to dismiss summarily and without [*152] notice, any employee who has been guilty of grave neglect of duty, or guilty of misconduct within his control, in connection with his duties; one of which is, undoubtedly, to abstain from assaulting his manager in the way in which the respondent did in the employer’s canteen, the evening of the 26th May, 1965. (Sinclair v. Neighbour [1967] 2 W.L.R. 1, at pp. 5 and 6 per Davies L.J. and Sachs L.J., respectively, considered with approval).

(c) In the circumstances of this case, I am clearly of opinion that the common law right of the employer was expressly reserved in the parties’ contract; and it was properly exercised by the employers-appellants. I would, therefore, allow the appeal and dismiss the claim.

Appeal dismissed (by majority)

with costs.

Cases referred to:

Tomlinson v. The London, Midland and Scottish Railway Co. [1944] 1 All E.R. 537, and at pp. 540F, 541A, per Lord Greene M.R.;

Jupiter General Insurance Co. Ltd. v. Shroff [19371 3 All E.R. 67 P.C.;

Clouston and Co. Ltd. v. Corry [1904-1907] All E.R. (Rep.) 685;

Thompson v. British Berma Motor Lorries (1917) 33 T.L.R. 187;

Laws v. London Chronicle (Indicator Newspapers) Ltd. [19591 2 All E.R. 285;

McClelland v. Northern Ireland Health Services Board [1957] 2 All E.R. 129 (H.L.);

Sinclair v. Neighbour [1967] 2 W.L.R. I, at pp.5, 6;

Boston Deep Sea Fishing and Ice Co. v. Ansell [1888] 39 Ch. D. 339, at p. 363 (C.A.).

Appeal.

Appeal by defendants against the judgment of the District Court of Nicosia (Loizou P.D.C. & Mavrommatis D.J) dated the 31st March, 1967 (Action No. 716/66) by virtue of which plaintiff was awarded the sum of £88.-as damages for wrongful dismissal from the service of the defendants. [*153]

S. Pavlides, for the appellants.

A. Paikkos, for the respondent.

Cur. adv. vult.

The following judgments were read:-

VASSILIADES, P.: Mr. Justice Loizou, who is unable to attend Court to-day has authorized me to read and hand down his judgment which has been discussed in conference together with the other judgments.

LOIZOU, J.: This appeal raises a very short question upon the construction of a term in the contract of service between the parties.

The facts as found by the trial Court have not been challenged in this Court and may be briefly summarised as follows:

The respondent had been in the service of the appellants as from the 2nd February, 1956, until the time of his summary dismissal on the 27th May, 1965. At the relevant time he was employed as a senior assistant at one of appellants’ shops at Polemidhia on a monthly basis at a salary of £44 per month.

The incident as a result of which the appellant was dismissed occurred in the evening of the 26th May, 1965. The respondent was on duty at the shop until 9.00 p.m. when the shop closed. At about 10.00 p.m. he went to the adjacent corporals’ mess where his immediate superior and manager, D.W.2. Miltiades loannides, was on duty-and where the respondent had no business to be-and there he solicited a drink from a serviceman which he was forbidden to have. The manager refused to let him have the drink, there followed an argument between them and the respondent struck the manager on the mouth wounding him on the upper lip. The manager reported the incident on the same night to the District Manager of the appellants who, on the following morning, interviewed both the respondent and the manager in connection with the incident and as a result he suspended the respondent from work. Eventually on the 2nd June, 1965, the respondent was summarily dismissed as from the 27th May, 1965. The letter of dismissal is exhibit 4 and reads as follows:- [*154]

“A report has been received from your Supervisory Official in which it is stated that on the night of the 26th May, 1965 you assaulted your Manager. The injuries sustained by the Manager necessitated medical treatment.

You have been guilty of grave misconduct on duty such as to render impracticable your continued, employment by the Corporation and in the circumstances we are directed to inform you that your services are terminated summarily as from the 27th May, 1965, date of your suspension”.

Having failed to persuade the appellants by other means to alter their decision to dismiss him the respondent instituted these proceedings claiming various sums for wrongful dismissal. The appellants by their defence (para. 3) admit that they dismissed the respondent summarily without notice, but allege that they did so “in exercise of their right under the agreement of 4.12.1959, the plaintiff having been guilty of misconduct on duty within his control such as to render impracticable the continued relationship of employer and employee for a moment longer”. And in continuation they state the following particulars:

“The plaintiff on or about the 26.5.1965 during working hours assaulted and wounded his manager M. loannides in the services shop establishment of the defendants in which the plaintiff was working as a shop assistant cutting the mouth of his manager causing bleeding and requiring a stitch”.

By their judgment the trial Court awarded to the respondent, by way of damages, a sum of £88 being the equivalent of one month’s salary in lieu of notice and one month’s earned leave with pay. The measure of damages applied by the trial Court is not challenged; indeed it was conceded that if the summary dismissal was not justified under the terms of the contract of service the respondent would be entitled to the damages awarded; what is challenged is the correctness of the construction placed upon the relevant term of the contract of service entitling the appellants to dismiss summarily without notice.

It is common ground that the terms governing the relationship of the parties are those set out in the collective agreement dated the 4th December, 1959, (exhibit 1), entered into [*155] between the appellants and the N.A.A.F.I. Employees’ Independent Trade Union of which the respondent is, or was then, a member.

The relevant clause of this agreement is clause 2 under the heading “Basis of Engagement” which makes provision, inter alia, for the mode of termination of the service by the parties : After a probationary period of six months all employees in grades listed under “monthly rates” were on a monthly basis and were liable to give or receive one month’s notice of termination and those in grades listed under “daily rates” were on a weekly basis and were liable to give or receive two weeks’ notice of termination.-In either case the employers could pay one month’s salary or two weeks’ wages respectively, in lieu of notice. Then follows the material proviso, which reads as follows:

It is abundantly clear both from the letter exhibit 4 and paragraph 3 of the Statement of Defence that in dismissing the respondent the appellants were relying on the above proviso.

The trial Court came to the conclusion that the conduct of the respondent in the incident for which he was dismissed summarily was misconduct of such a grave nature as would render impracticable the continued relationship of employer and employee for a moment longer, but that by the addition of the words “on duty” after the word “misconduct” in the proviso the parties had elected, as they had a right to do, to restrict the common law right for summary dismissal, to circumstances where the misconduct was committed by the employee whilst he was on duty; and that as the respondent was not on duty at the material time they held that his dismissal was not in accordance with the terms of the agreement, exhibit 1, and that, therefore, he was entitled to the damages awarded.

The ground upon which the appeal was argued in this [*156] Court was the construction placed by the trial Court upon the proviso.

Another ground of appeal that in view of certain reasons stated therein “it was not open to the plaintiff to plead that the misconduct, found as established by the trial Court, took place while the plaintiff was not on duty” was not pursued.

It was contended on behalf of the appellants that the trial Court construed this proviso narrowly and missed the real gist of it; that the whole clause is dominated by the concluding words “such as to render impracticable the continued relationship of employer and employee”; and that the gist of the proviso, read as a whole, is that any such misconduct would justify summary dismissal irrespective of whether the employee was actually on duty at the time or not. In support of his submission learned counsel for the appellants cited the case of Tomlinson v. The London, Midland and Scottish Railway Co. [1944] 1 All E.R. p 537. That was a case in which the appellant sought a declaration that his contract of service with the respondent company had never been validly terminated and claimed damages for wrongful dismissal. The appellant was under a contract of service with the respondent company which incorporated the machinery of negotiation for railway staff agreed to between the company and the appellant’s trade union. Clauses 1-7 of the machinery of negotiation relate to the procedure in dealing with an employee charged with misconduct, neglect of duty, or other breaches of discipline. Then comes the material clause 8 which reads as follows:-

“The procedure set out in cll. 1-7 above shall not apply in cases of exceptionally grave misconduct in which summary action by the management is justifiable, and shall not preclude suspension from duty in cases in which the management considered this necessary”.

At a meeting of the workers of the company, held outside working hours, for the purpose of forming a committee to manage a canteen which the respondent company was setting up for the use, of their workers, the appellant, contrary to the instructions, took the chair and when a fellow employee pointed out to him that he had no business to be in the chair he was annoyed and, in the presence of his superior officer who was attending the meeting on duty, he created a disturbance and violently assaulted his fellow employee with the [*157] result that he had to go to hospital. The respondent company relying on clause 8 of the machinery of negotiation dismissed the appellant summarily without notice and it is with this dismissal that the litigation was concerned. It was held by Cassels, J. in the court of first instance that the plain tiff’s conduct at the meeting was exceptionally grave misconduct under clause 8 and the company was entitled to dismiss him summarily. The plaintiff appealed. It was argued for the plaintiff at the appeal that no conduct out-side working hours can be misconduct within the meaning of this rule (clause 8) or at any rate this particular conduct outside working hours could not be misconduct within the meaning of the rule. The appeal was dismissed.

Lord Greene M.R. in the course of his judgment had this to say (p. 540F):

“It was said that here were men in their leisure time doing something which it was no part of their dury to do. I agree, but just let us see what they were doing. The company in a matter concerning the welfare of its employees which it was anxious to foster and encourage sets up the machinery of a committee to deal with that particular welfare organisation. The proper setting up and organisation of this canteen was a matter of very great interest to the company, and of very great interest to the employees themselves. It was as intimately linked as anything can be linked with the general relationship of employers and men, and the contentment and comfort of the men in their work”.

And further down in his judgment (p. 541A):

“It seems to me quite impossible to suggest merely because this happened outside working hours that it was so disconnected with the employment as to make it wrong to regard it as misconduct within cl.8. To say that seems to me to shut one’s eyes to the obvious realities of the situation. I am not surprised that Cassels, I., came the view that he did; and I should have come to the same view myself upon the facts as found by him with regard to what took place at that meeting, as to which there is no quarrel with his findings”.

The issue in the case cited, as I understand it, was whether the conduct of the plaintiff at that meeting was exceptionally [*158] grave misconduct justifying summary dismissal by the employer; the words “on duty” do not occur at all in the relevant clause and the question whether the employee was or was not on duty at the material time was only relevant, in my view, in determining the extent or degree of the misconduct and, therefore, the sufficiency of the justification.

In the case before us we have an elaborate agreement the parties to which have anticipated and made express provision for the termination of the services both by notice and also summarily without notice. The finding of the trial Court that the conduct of the respondent on the 26th May, 1965, was “misconduct of such grave nature as would render impracticable the continued relationship of employer and employee for a moment longer” (p. 27C) has not been challenged, and, indeed, I do not think that it could have been challenged. What we have, therefore, to consider is whether, in view of the fact that the respondent was not on duty at the relevant time, the proviso was applicable or, in other words, whether the appellants had a right to dismiss him summarily without notice under the proviso.

The difficulty that has arisen is with regard to the words “on duty”, which occur in the proviso,-and the meaning and effect of those words. To my mind the use of the words “oh duty” in the proviso clearly import the meaning that the right to dismiss summarily without notice was limited not only to cases where the misconduct was such as to render impracticable the continued relationship of employer and employee but, also, to cases where such misconduct was committed by the employee while he was actually on duty or was engaged in the performance of his duties. The intention of the parties can best be gathered from the words they choose to use; and I cannot think that the parties here could have intended that the employers’ right to dismiss summarily without notice should apply generally to any misconduct, irrespective of when it was committed, so long as it was of the nature and degree described in the proviso; if that was their intention one might think that the words “on duty” would be quite superfluous.

In the light of the above I am of the opinion that the view taken by the trial Court that, in the circumstances, this case does not fall within the clause of the contract of service entitling the appellants to dismiss summarily without notice, is correct. [*159]

In the result I would dismiss the appeal with costs.

VASSILIADES, P. I shall now ask Mr. Justice Hadjianastassiou to read his judgment.

HADJIANASTASSIOU, J.: This is an appeal from the judgment of the Full District Court of Nicosia dated May 30, 1967, awarding to the plaintiff (the present respondent) the sum of £88 as damages for wrongful dismissal from the service of the appellants.

The respondent had been, and was, employed as a counter assistant in the service of Navy, Army and Airforce Institutes (hereinafter called the “corporation”) known as N.A.A.F.I., at a salary of £22 per month, as from February 2, 1956; having served a probationary period of six months, he was listed under “monthly rates”. Later on he was promoted to the post of senior assistant at a salary of. £44 per month, and continued in the appellants’ service until May 27, 1965, when his contract of service was determined summarily as from May 27, 1965, under the terms of their agreement to that effect; because he was found guilty of grave misconduct inconsistent with the fulfilment of the conditions of service.

The incident which gave rise to the dismissal of the respondent without notice, started in the evening of May 26, 1965-I need not deal with the facts at length, as they appear more fully in the judgment of the trial Court-when the respondent finished his duties for the day at 9.00 p.m. and closed the shop of the appellants at Polemidhia. Mr. Miltiades loannides was his immediate superior and manager of that shop. Respondent visited the adjacent N.A.A.F.I. canteen used as a corporals’ mess where his manager was on duty serving, inter alia, drinks to military personnel. At about 10.00 p.m. or shortly before, the respondent asked his manager to serve him with a beer. According to the version of the manager, which the trial Court quite rightly, in my view, accepted from that of the plaintiff, the respondent came into the canteen where he had no business to be, he solicited a drink from Englishman which he was forbidden to have, and demanded a beer. He refused to serve him with a beer, and as a result there was an argument between them; the manager remarking to him that had he wished to give orders he could do so his own home and not in the canteen. The respondent, apparently very annoyed, in reply with his manager with his hand on the mouth, wounding him on the [*160] upper lip, which necessitated medical treatment. On the following morning the district manager of the appellants interviewed both the respondent and Mr. loannides with the result that the respondent was suspended from duty as from hat day without pay. On June 2, 1965, the appellants wrote a letter, exhibit 2, to the respondent, which so far as relevant, reads:

“……………………………………………………………………..

“You have been guilty of grave misconduct on duty such as to render impracticable your continued employment at the corporation and in the circumstances we are directed to inform you that your services are terminated summarily as from the 27th May, 1965, date of your suspension”.

It is for this dismissal, alleged to be wrongful, that this action was brought. The statement of claim contained, inter alia, a claim for damages for wrongful dismissal.

The statement of defence justified the dismissal of the respondent without notice, in exercise of their right under the agreement of December 4, 1959, the plaintiff having been found guilty of misconduct on duty within his control such as to render impracticable the continued relationship of employer and employee for a moment longer.

The conditions of service appear in exhibit 1, which is a very elaborate agreement, signed in December 4, 1959, by the Corporation and the N.A.A.F.I. Employees’ Independent Trade Union. The respondent was and has been one of its members. It is convenient to set out the whole of clause 2, so far as relevant, of these conditions:

“2. Basis of Engagement.

All newly engaged employees shall be considered as temporary employees on probation for six months during which period they shall be liable to give or receive one week’s notice of termination and shall be on a weekly basis. The Corporation may pay one week’s wages in lieu of notice.

After the six months’ period of probation all employees, in grades listed under ‘monthly rates’ in clauses 6, 7, 8, 9, 10 shall be liable to give or receive one month’s notice of termination and shall be on a monthly basis. [*161]

The Corporation may pay one month’s salary in lieu of notice. Provided always that in the case of all employees the Corporation reserves the right to dismiss summarily without notice or payment of wages in lieu of notice where the employee has been guilty of grave neglect of his duties or misconduct on duty within his control such as to render impracticable the continued relationship of employer and employee for a moment longer”.

The following amendments were effected subsequent to the signing of exhibit 1:

(a) The gratuity was calculated on the basis of one month’s pay in respect of the original two weeks and

(b) the annual leave to which the employees were entitled was increased to three weeks. Exhibit 1 has been accepted and relied upon by both parties in this action.

The main argument of counsel for the appellants, before the trial Court, as well as before us, was that under the proviso to clause 2 of the contract of service the appellants were entitled to dismiss summarily the respondent, having been found guilty of grave misconduct, which took place on the corporation premises, irrespective of whether or not it was committed outside duty hours, because the object of the contract was the preservation of the discipline in the employers’ business. Counsel further contended that the proviso to clause 2 was not intended to exclude the common law right of a master. He relied on the authority of Tomlinson v. L.M.S. Railway [1944] 1 ALL E.R. 537.

The question, to my mind, depends on the true construction of clause 2 of the conditions of employment. This clause indicates, in my opinion, that the clause is intended to be comprehensive. It provides that an employee may be dismissed for grave neglect of his duties or misconduct on duty within his control such as to render impracticable the continued relationship of employer and employee for a moment longer. The only other provision in the clause is providing that both the employees and the corporation may terminate the employment by giving one month’s notice; the corporation may, of course, pay one month’s salary in lieu of notice. If it was intended that the proviso to clause 2 should include [*162] the common law right of a master to dismiss without notice a servant who was guilty of misconduct whether in the course of his duties or not, inconsistent with the fulfilment of the express or implied condition of service, it is strange in my view that the parties have elected to insert in their contract of employment express provision, limiting the right of immediate dismissal to “misconduct on duty within his control only.

Mr. Pavlides, in reply to counsel for the respondent, conceded that the words “misconduct on duty” standing alone could imply that the master intended to limit his common law right of dismissal, in the case of misconduct taking place during duty hours; but he argued that because of the concluding words of the proviso, the words “misconduct on duty” were qualified and in effect introduced the common law right of a master to dismiss an employee found guilty of misconduct not only on duty but also outside duty hours. With the greatest respect to the argument of counsel for the appellants, the concluding words of the proviso to clause 2 of the contract of employment, do not support in my view this construction; because of such express provision in the said proviso; and, in any event, the concluding words in my view apply to the words “misconduct” only, indicating that misconduct must be of such a nature-and it is a question of fact whether the servant’s conduct is sufficient to justify dismissal-and do not in any way affect or qualify the words “on duty” expressly intended by the contracting parties to limit the common law right of the master in the case of misconduct taking place on duty only in respect of duties assigned to him.

I venture to say that, in my opinion, this limitation was intended by the contracting parties to be so; because the immediate dismissal of an employee is a strong measure; and the Union which signed exhibit 1, fully appreciating its significance and knowing the standards of its members-probably that men are apt to show temper when reprimanded outside duty hours-agreed in principle to limit this strong measure of immediate dismissal for misconduct on duty only.

I agree, of course, with the view that when the misconduct of the employee was such as to interfere with and to prejudice the safe and proper conduct or running of the business of the corporation, immediate dismissal is justified. It must be [*163] remembered, of course, that the test to be applied must vary with the nature of the business and the position held by the employee, and that decisions in other cases are of little value. C/f Jupiter General Insurance Co. Ltd. v. Shroff [1937] 3 All E.R. 67 (P.C.); Clouston & Co., Ltd., v. Corry [1904-1907] All E.R. Rep. 685; Thompson v. British Berma Motor Lorries (1917) 33 T.L.R. 187; Laws v. London Chronicle (Indicator Newspapers) Ltd., [1959] 2 All E.R. 285.

As I have already said, this elaborate contract of service’ apparently contains all the terms which the parties have agreed upon; and since the contract provides for dismissal on certain stated grounds only, this Court, in my view, ought to be reluctant to imply a term that the servant can be dismissed on the other ground of misconduct, that is to say misconduct not on duty. C/f McCleliand v. Northern Ireland General Health Services Board [1957] 2 All E.R. 129 (H.L.).

On a review of the whole case, I have come to the conclusion that the trial Court was justified in its view of the case, and in the conclusion at which it arrived. I, therefore, confirm the Judgment of the Court. I think, on the true construction of the proviso to clause 2, in the special context of this case, the appellants debarred themselves from dismissing summarily the respondent and I would, therefore, dismiss the appeal, with costs.

VASSILIADES, P.: This appeal turns on the effect of a provision in the contract of employment between the appellants as employers and the respondent as employee, regarding the employers’ right to dismiss summarily the employee for the preservation and maintenance of good discipline in the employers’ business.

The appellants are the widely known Navy, Army and Air Force institutes Corporation (usually referred to as N.A.A.F.I.) and the respondent is one of their employees working as one of their shop assistants, under the terms of a collective agreement dated 30th March, 1966, (admitted as exhibit 1 in these proceedings) which constitutes the contract of employment between the parties.

Following an incident between the respondent and the manager of the shop where he worked, the appellants dismissed summarily the respondent for misconduct, purporting [*164] to do so in the exercise of their right for such dismissal, duly reserved in the contract between the parties. The relevant provision in the contract, appears in clause 2 (at age 32 of the record) which provides that after six months probation period all employees in certain grades listed as “daily rates” shall continue in employment liable to termination on two weeks’ notice from either side; or two weeks wages in lieu of notice,

“Provided always that in the case of all employees (daily or monthly) the Corporation (employer) reserves the right to dismiss summarily without notice or payment of wages in lieu of notice, where the employee has been guilty of grave neglect of his duties or misconduct on duty within his control such as to render impracticable the continued relationship of employer and employee for a moment longer”.

The incident which resulted in the dismissal of the respondent, as found by the trial Court (vide p. 25/26) was that on the night of the 26th May, 1965, after the closing, of the N.A.A.F.I shop at 9.00 p.m. where he was working as one of the assistants, the respondent went to the adjacent Corporals’ Mess, a N.A.A.F.I. canteen, where drinks were served to military personnel. There the respondent asked the manager of the canteen, who was also the manager of the shop where he was working, and respondent’s immediate superior, to give him a bottle of beer which, the respondent said, an English soldier would pay for, as promised. The manager refused to give the beer because according to the employers’ regulations, the employees could not be served with drink at that premises; and in any case, should not be served on credit.

The respondent somehow got a bottle of beer from the refrigerator, which the manager tried to take away from him. Words were exchanged between them, and at a certain stage the respondent struck the manager on the face and caused his mouth to bleed.

The manager reported the incident to the District Manager of N.A.A.F.I. on the same evening, who, on the following morning, interviewed both the respondent and the manager of the shop, and suspended the respondent from work. Eventually the respondent was summarily dismissed for misconduct as from the 27th May. [*165]

After some more contacts regarding his dismissal, the respondent eventually sued the appellants for wrongful dismissal claiming various sums, as damages, into which I need not now enter, excepting for the item of £88 for which the claim was successful, and judgment was given in favour of the respondent; the judgment challenged by this appeal. This item in the claim is the equivalent of one month’s wages in lieu of notice (44) and 30 days paid leave.

The trial Court came to the conclusion that the conduct of the plaintiff in the incident for which he was dismissed, was―using the wording of the contract― “a misconduct of such grave nature as would render impracticable the continued relationship of employer and employee a moment longer”. And following Tomlinson v. The London Midland and Scottish Railway Co., [1944] 1 All E.R. p. 537, the trial Court would be inclined to hold that it is-as they have aptly put it-”quite impossible to suggest that merely because this happened outside working hours it was so disconnected with the employment as to make it wrong to regard it as misconduct” entitling the employer to dismiss summarily the respondent. But in the present case, the trial Court found it impossible to arrive at this conclusion, because, they say, “the parties elected to restrict this common law right of summary dismissal by the addition of the words ‘on duty’ immediately after the word ‘misconduct’. (p. 27, E).

In presenting the case for the appellants, Mr. Pavlides read from the judgment of Lord Greene M.R. in the Tomlinson case (supra) and submitted that the object of the provision for summary dismissal in the parties’ contract, is clearly the preservation of the proper discipline in the employer’s business, and therefore, the words ‘on duty within his control’ in the contract, must be read in conjunction with the relationship of employer and employee, and the maintenance of good discipline in the employer’s business. The essence of the provision lies in the continued relationship of employer and, employee on the required footing of proper discipline, learned counsel submitted.

Mr. Paikkos far the respondent conceded, quite rightly in my opinion, that for such misconduct the appellants could dismiss instantly the respondent, had the incident occurred while he was on duty’ i.e. within his working hours; but the appellants could not do so, counsel submitted, under the [*166] parties’ contract, for what happened after the closing of the shop i.e. outside respondent’s working hours.

This appears to be also the view adopted by the trial Court. “We have no hesitation-they say in their judgment (P. 27, C)-in holding that the conduct of the plaintiff on the occasion in question was misconduct of such grave nature as would render impracticable the continued relationship of employer and employee a moment longer… but unlike the facts in Tomlinson’s case (p. 27, E) here the parties elected to restrict this common law right of summary dismissal by the addition of the words ‘on duty’, immediately after the word ‘misconduct’. There is nothing in the law of contract― the trial Court add (p. 27, F.)―to prevent the parties making their own law …” for the purposes of their contract, subject, of course, to the general legal limitations in this connection.

This is, no doubt, correct. And here it is the parties ‘own law’ viz., the relevant part of their contract which falls to be construed and applied. In doing so, the Court has to read the words and expressions used by the parties in their context; and, in case of difficulty, to read them in connection with the purpose which such words were intended to serve.

In this case we have an elaborate contract, settled between the appellants, on the one hand, a corporation employing a great number of persons in various grades, and on the other hand the employee’s Trade Union (exhibit 1, p. 31); a contract the terms and conditions of which, set out in elaborate detail, run into no less than 13 pages of the record (pp. 31-44).

Apart of the provisions in clauses 22 and 23 for the interpretation of the agreement and the “regulation” of disputes, (which have not been made part of this case) there is nothing in the contract about discipline, excepting for the reference to the employer’s “right to dismiss summarily without notice or payment of wages in lieu” thereof, all employees for “grave neglect of duty or misconduct on duty within his (the employee’s) control” such as to render “impracticable the continued relationship of employer and employee for a moment longer”. And these are fundamental provisions in the parties’ contract, found in clause 2 under the heading “Basis of Engagement”.

Reading the words ‘on duty’ in their context, in the part [*167] of the contract where they occur, and considering the object of the contract and its provisions as a whole, I find myself unable to conclude that the intention of the parties in so using the words ‘on duty’ was to restrict the employer’s right to dismiss summarily any employee without notice or pay-of wages in lieu thereof, in certain circumstances; a right obviously necessary and very important for the purpose of maintaining due efficiency and proper discipline in the employer’s large business. A right admittedly implied in the contract; and expressly reserved earlier in the same paragraph thereof. A legal right, most usual in contracts of the same nature.

But it may be said, if not intended to restrict the employer’s right of summary dismissal, the words used by the parties in their contract must have been used for a certain purpose; and they must be given their usual meaning, unless they have to be given a special one. That is undoubtedly so. The words “on duty”, same as the words “within his control”, and the phrase “such as to render impracticable the continued relationship of employer and employee for a moment longer” must, I think, be read as referring to, and qualifying the “misconduct” for which the employer can use his right of summary dismissal.

It must be misconduct within the employee’s control; not misconduct over which he has no control at the material time. Such, for instance, as loss of money or goods or breakages, in circumstances beyond his control. Moreover, it must be misconduct of such a nature as to render impracticable the continued relationship of employer and employee for a moment longer. Such, for instance, as the misconduct in the present case, as very rightly, I think, the trial Court held. And furthermore, it must be misconduct connected with the employment.

“Misconduct on duty within his control”, read as meaning misconduct in connection with the employee’s duty to his employer, is consistent with the purpose of the contract; and with the parties’ respective rights and obligations thereunder. Read, on the other hand, as meaning misconduct depending on the clock, as suggested on behalf of. the respondent, lead to obvious absurdities, which, in my opinion, cannot have been intended by either side, as demonstrated during the argument; and as the facts of this very case amply show. [*168]

I therefore, find myself unable to say that the parties to this contract, either intended to agree, or unwittingly did agree, that for the misconduct in question, the employer would have the right to dismiss summarily the employee, if the assault on the manager took place before the closing of the shop at 9.00 p.m.; but would have no such right if the assault took place after shop hours. What the parties agreed in my opinion, and expressly provided for in their contract is that the employer reserved his legal right to dismiss summarily without notice, any employee who has been guilty of grave neglect of duty, or guilty of misconduct within his control, in connection with his duties; one of which is, undoubtedly, to abstain from assaulting his manager in the way in which the respondent did in the employer’s canteen, the evening of the 26th May, 1965.

The employer’s common law right of summary dismissal for misconduct, (reserved in the present parties’ contract), was again recently discussed in the Court of Appeal in England in Sinclair v. Neighbour [1967] 2 W.L.R. p.1. A Bookmaker’s manager, in that case, lent himself a very temporary loan of £15 from his employer’s money, placing in the till under his control, an I.O.U. for the amount. He admitted that the employer, if asked for his consent would not have approved of borrowing from the till for the purpose of horse-betting. When the employer came to know of the fact, he summarily dismissed the manager. The latter sued the employer for wrongful dismissal. The County Court Judge held that although the manager’s conduct was reprehensible, it was not dishonest, and, therefore, the employer was not entitled to dismiss the manager summarily; and awarded the plaintiff £88 damages (for four weeks salary) ordering, moreover, the Registrar to take account of the commission due to the manager. On appeal Lord Justice Davies is reported (at p. 5) to have said in his judgment:

“With the greatest respect to the Judge, I think that he fell into error in attaching too much weight to the label and not enough to the facts. The facts were established. The fact that the manager took the money from his employer’s till behind his back, knowing that the employer would not consent, was established; and it seems to me that it does not really matter very much whether that justifies the label ‘dishonest’ or not. The Judge ought to have gone on to consider whether even if falling short [*169] of dishonesty, the manager’s conduct was nevertheless conduct of such grave and weighty character as to amount to a breach of the confidential relationship between master and servant, such as would render the servant unfit for continuance in the master’s employment and gave the master the right to discharge him immediately. In my judgment on the facts of this case the manager s conduct clearly fell within that latter category; and I have no doubt at all that the employer was, therefore, entitled to dismiss him”.

Lord Justice Sachs in the same case, is reported to have said. in a concurring judgment:-

“It is well established law that a servant can be instantly dismissed when his conduct is such that it not only amounts to a wrongful act inconsistent with his duty towards his master, but is also inconsistent with the continuance of confidence between them. That was said by Bowen L.J. in his classic judgment in Boston Deep Sea Fishing and Ice Co. v. Ansell” ([1888] 39 Ch. D. 339, 363 C.A.)

And further down, he said (p. 6):-

“I would add that, where you get such wrongful conduct as goes to the basis of confidence between employer amp employee, it is wrong to suggest (as the Judge did) that such a set of circumstances ought in law not to be met by immediate dismissal unless accompanied by a payment of money in lieu of notice”.

In the circumstances of the present case, I am clearly of the opinion that this common law right of the employer was expressly reserved in the parties’ contract; and it was properly exercised by the employer in the circumstances. I would, therefore allow the appeal and dismiss the claim.

In the result the appeal fails by a majority decision and is dismissed with costs.

Appeal dismissed with costs.

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