Société Générale, London Branch v Geys

Société Générale, London Branch v Geys [2012] UKSC 63 is a UK labour law case, concerning wrongful dismissal.

In many cases, provisions of a unilaterally repudiated contract would survive and be enforceable, such as covenants against competition or disciplinary procedure clauses.

Was Sir John Donaldson clearly right when he declared in Sanders v Ernest A Neale Ltd [1974] ICR 565 at p 571 that an unaccepted repudiation brought a contract of employment to an end?

In Thomas Marshall (Exports) Ltd v Guinle [1979] Ch 227 Sir Robert Megarry V-C in his review of the authorities also took that case as his starting point.

He said that, as a result of the ebb and flow of the tide of judicial opinion, the court was left in the slack water of first principles.

Only a few months later, in London Transport Executive v Clarke [1981] ICR 355, the majority view in the Court of Appeal was in favour of the position that Sir Robert Megarry V-C adopted in Marshall.

I would endorse Ralph Gibson LJ's criticism in Boyo v Lambeth London Borough Council [1994] ICR 727, 743 of Buckley LJ's observation in the Gunton case that in a case of wrongful dismissal the court should easily infer that the innocent party has accepted the guilty party's repudiation of the contract.

So the question is whether there are sound reasons of principle for holding that the general rule of law that requires acceptance of a repudiation does not apply.

The question that Sir John Donaldson asked himself in Sanders v Ernest A Neale Ltd [1974] ICR 565, 571 is at the heart of the issue: why should the employee not sue for wages if it is the act of the employer which has prevented his performing the condition precedent of rendering his services?

There may be grounds for thinking that the court is less reluctant than it once was to give injunctive relief in such cases, but I would not rest my decision on that point.

If there exists a good reason and an opportunity for the innocent party to affirm the contract, he should be allowed to do so: London Transport Executive v Clarke [1981] ICR 355, 367, per Templeman LJ.Lord Wilson focused criticism on the 'automatic theory' of termination.

In proposing that the court should indorse the automatic theory, the Bank invites it to cause the law of England and Wales in relation to contracts of employment to set sail, unaccompanied, upon a journey for which I can discern no just purpose and can identify no final destination.