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Restitution within contract?

Published online by Cambridge University Press:  02 January 2018

Geoffrey Mead
Geoffrey Mead*
Affiliation:
University of Southampton
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Extract

If an employee, as part of a programme of industrial action, refuses to work normally, what is the legal position when he performs only a part of his duties? This question has been the subject of much litigation in recent years, and raises issues of fundamental importance. At a practical level, it has to be determined whether and when the employee is entitled to any remuneration, and if so, how much? Related to this are the options open to the employer in the light of such action. At a theoretical level, questions arise concerning the proper scope of the law of contract, and its relationship to the law of restitution. This paper will explore these issues, and suggest an approach which can adequately deal with both questions.

Type
Research Article
Information
Legal Studies , Volume 11 , Issue 2 , July 1991 , pp. 172 - 188
Copyright
Copyright © Society of Legal Scholars 1991

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References

1. [1989] IRLR 259, CA. Noted by the present writer in (1990) 106 LQR 192.

2. [1981] 1 WLR 711.

3. [1962] QB 26. See also Harris, Donald, Remedies in Contract and Tort (Weidenfeld and Nicholson, 1988) pp 23–24 Google Scholar. Note that if the dismissal is a response to industrial action, then the dismissed employee is not entitled to bring a claim for unfair dismissal if all others engaging in the action are also dismissed; see Employment Protection (Consolidation) Act 1978, s 62. For unofficial action see EPCA 1978, s 62A (as inserted by EA 1990).

4. Para 1707 (London, Sweet and Maxwell, 1989).

5. Fercometal SARL v Mediterranean Shipping Co SA (The Simona) [1988] 3 WLR 200 at 212. Emphasis in original.

6. [1987] AC 539.

7. (1871) LR 7 Ex Ch 111 at 112–113.

8. Supra, n 6, p 568 GF.

9. Supra, n 6, p 574 C.

10. Supra, n 6, p 565A.

11. Sales, P., ‘Contract and Restitution in the Employment Relationship’ (1988) 8 OJLS 301, 303CrossRefGoogle Scholar.

12. Supra, n 11, p305, n 17.

13. Freedland, M. R., The Contract of Employment (Oxford, 1976) p 20 Google Scholar. This doctrine is explained in some detail by G. H. Treitel in his Remedies for Breach of Contract: A Comparative Account (Oxford, 1988); see Ch VIII, esp pp 259–60.

14. [1976] 3 WLR 901 at 911h-912a.

15. Supra, n 14.

16. Stilk v Myrick (1809) 2 Camp 317.

17. See Treitel, supra, n 13, p 404.

18. [1898] 1 QB 673.

19. [1952] 2 All ER 176. See also Birks, , An Introduction to the Law of Restitution (revised edn, Oxford, 1988) p 241 Google Scholar, where he refers to ‘the doctrine which requires substantial performance of an entire contract before any claim can be made under that contract.’

20. [1916] 1 KB 577.

21. Supra, n 19.

22. [1922] 1 WLR 1009.

23. Supra, n 19, p 181a.

24. See Treitel; supra, n 13, p 307.

25. Supra, n 1, para 25.

26. This would be ‘substantial performance’ in cases of entire contracts, and performance which does not substantially deprive the employer of what he bargained for in all other contracts. This possibility must, however, be regarded as remote, given the likelihood that a court will hold that if a refusal to do a task is part of a programme of industrial action then the performance in fact rendered is not substantial.

27. (1952) 2AllER 176 at 181.

28. [1894] IR LR 91.

29. Hence, in MacPherson v LB Lambeth [1988] IRLR 407 at 477, Wood J said: ‘in the present case, there was no evidence that D had accepted Ps services as substantially complying with their obligations. The council had done everything they could to make it clear to P that they did not accept the work P had done and would not pay for it.’

30. Supra, n 1, para 57.

31. [1962] AC 413.

32. Supra, n 31, p 431.

33. Supra, n 11, p 306.

34. Supra, n 6, p 553B; emphasis added. This approach was also adverted to in the Australian case of Steele v Tardiani (1946) 72 CLR 386 at 405. This case involved a failure to render exact performance in a contract concerned with the provision of pieces of wood of a specified size. The plaintims argued that the defendants had nevertheless taken the benefit of such work, and they should be obliged to make payment. The question of the level of payment was, however, not fully addressed by the court. Dixon J simply said that the taking of the benefit of the work involved ‘either a dispensation from precise performance or an implication at law of a new obligation to pay the value of the work done’; at p 405. The first approach-namely a dispensation from precise performance-is relatively unproblematic. The second-paying the value of the work done — is much less simple to accommodate within a theoretical framework, and is the subject of detailed discussion later in this paper. The relatively cursory way in which the issue was dealt with in this case renders it of limited precedential value.

35. [1984] IRLR 184, HCt.

36. Supra, n 35, para 49.

37. Supra, n 6, p 553C.

38. Supra, n 6, p 553D-E.

39. [1919] 2 KB 722.

40. Supra, n 39, p 727.

41. Supra, n 6, p 553F.

42. Supra, n 6, p 561F.

43. Supra, n 6, p 552D.

44. Birks, supra, n 19, p 464.

45. Supra, n 19, p 47.

46. Ibid.

47. This, of course, depends on whether the quantum meruit differs from the contract rate.

48. Supra, n 19, p47.

49. Supra, n 19, p 464.

50. [1965] 1 WLR 335.

51. Supra, n 50, p 336.

52. [1936] 2 KB 403.

53. Supra, n 50, p 338.

54. [1919] QB 728.

55. Supra, n 54, p 730.

56. I am indebted to Peter Birks for suggesting this idea to me.

57. [1936] 1 All ER 884.

58. [1989] 3 All ER 423.

59. See Birks, supra, n 19, p 232.

60. [1936] 2 All ER 597.

61. See Arrowsmith, , ‘Ineffective transactions and unjust enrichment’ (1989) 9 LS 121, 126Google Scholar.

62. Supra, n 58.

63. This approach is also suggested by Arrowsmith, who criticises the reasoning in Rover on the matter of contract ceilings, supra, n 61, pp 128–9.

64. See Birks, supra, n 19, p 266. The present writer has some misgivings about the role of ‘free acceptance’ as an unjust factor; see Mead, G. H., ‘Free Acceptance: Some Further Considerations’ (1990) 105 LQR 460 Google Scholar. However, if there has been a request that work be done, I have no objection to treating this as being the unjust factor. If the employer has merely acquiesced in the partial performance, I would deal with this by saying that, since he requested the doing of the whole job, that includes within it a request to do some of the job. If the employer does not want only part of the job done, he can say so, and given the existing relationship between the parties, there is no objection to requiring him to do so. In this sense it is significantly different from those cases where the two parties are strangers, and no ‘duty’ to reject a benefit should arise.

65. Supra, n 6, p 553A.

66. See Birks, supra, n 19, pp 219–220.

* This paper has benefited greatly from lengthy discussions with Peter Birks. I am also indebted to John Gardner, Roy Lewis and William Swadling for their comments on earlier drafts. Further, I am grateful for the comments of the members of the SF'TL Restitution Group, to whom this paper was presented in September 1990. I freely accept sole responsibility for any remaining defects of substance or style.