Outstanding claims for breach of contract

Case 1: The facts

Mr Perrie brought a claim for unfair dismissal when he was dismissed from his employment as a motor vehicle technician. He also claimed that he had been wrongfully dismissed, but then withdrew that claim. Perrie’s employer counterclaimed that he had been in breach of contract by his negligence, and sought to recover losses.

The tribunal decided that Perrie had not been unfairly dismissed, but said that it had no jurisdiction to hear the employer’s claim for breach of contract.

The ruling

The Employment Appeal Tribunal (EAT) held that the tribunal could hear the employer’s counterclaim. An employer can make a counterclaim for breach of contact if the employee has already brought a claim for a breach of contract (including wrongful dismissal) which is arising or outstanding on the date of dismissal.

The EAT held that “outstanding” means the matter is “unresolved, unsettled, unpaid, remaining, owing, and/or due”; it does not mean that the claim must already have been made. The tribunal was therefore entitled to hear the employer’s claim relating to possible breaches that had occurred prior to Perrie’s dismissal, and the case was remitted on this point.

Perrie v Mertrux EAT/0736/03